The week starts out 'interesting'. Gold is only a few cents from the 'magical' $1600 level. I think the only magical level is $10,000, and the musings on when that gets taken out. If it does, and the moves were proportional, that prices gas at the pump around $30/gal and crude around $400. Imagine food prices then. The Swissie is exploding, and the EUR/CHF just set another new record low, as parity is now the talk. And this has our futures down a whopping 1.75 points. Wow, pretty scary, the ES down 1.75 points.

Although I agree it looks like a chimney on your chart, I don't think anything can stop this rocketship right now. With the little break to the upside it just did, I think the die is cast. We'll see, though. I wish it would go down, but I'm just not seeing it. I think it will rise until they announce an idiotic debt deal, and then it will explode. Just a hunch. The total lack of respect at the key area today is why I'm leaning this way. But, as always, I'll just go with whatever it does. Go with the flow.

Another buyable dip there? I think so.

Charts.
Price bounced off the Head and Shoulders neckline.
Kane EXP ABCD completing at 0.300 fibo.
Gap not closed by 0.25 ES points, according to my data. Looks like an island bottom.

Broke the line that held overnight. Uh-oh.
But completed Al's abcd at the 1.618 first.

what we had at the low was a perfect abcd to .618 of both major swings up....are we looking for a 1.27 into another hit at the green median line? or .886 around one of the upper lines that come into play first? bearish abcd at .618 to take it down for a big retest before move up?

the blue set is simply the result of trying to look for what was in play on the larger time frame where price stopped - roofer once told me "if things are making sense, keep drawing". for whatever reason, a set anchored at the gap left behind in mid may got hit on the nose, so I'm leaving it in for now.

For some reason, my votes are not registering. It is an intermittant problem, they register sometimes, but most of the time they do not register. Should I talk to "daytrading?"

Al Kamego

I may be early on this, but I see a 1.27 dbs, followed by a 1.128 and now an .886

What I thought might be an island bottom is not an island bottom. In order for yesterday's prices to be an island bottom, yesterday's prices would have to open below and stay below 1301.75. They did not do this. I need to see daylight above the island bottom, and I can't see daylight above yesterday's price action.

Al Kamego

I guess what I am saying is that not every time price hits a line, or lines confluence and price hits them, it's an area that produces a potential trading edge. With experience one can make an attempt at filtering out these areas that just don't have the right look to them. I'm not really talking about subtle, almost invisible variations here, I'm talking about 'obviously has potential', and 'obviously looks totally wrong'. This is frequently something that can be seen by eye real easily, but is very, very hard to program into a computer. I wish I had a chart example off hand for you, but I don't.

Originally posted by tx_ches

Jim, what do you mean when you say "our eyes would say the geometry is not good." How can geometry be bad?

I'm not convinced the algo's are using the same median lines as roofer all the time. On the QQQ's, I drew 2 other sets before I saw roofer's set and even after I drew another set. So all together there were 4 sets with lines going into his areas. The algos could easily have programmed in 2 of them without using the more minor swing low that roofer used.

How heavily do you think the algos rely on measured moves? It seems like I see a lot of median line sets that capture a measured move. I wonder if that is what the algos key on when it is looking like they key on a median line set?