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.

ABCD at multiple line confluence. Can't believe they wouldn't pop it up...

So, they close cash right at this critical area, and then INTC reports earnings right after the bell. Hmmmmm.

Okay, ES starting to ramp off the area...

Getting ready for INTC?

Wow, the ES is all over the place. Bounced right up to the .447, again, and came back in. I wonder why it's so squirrely in here?

Okay, well, that wasn't the worst day for trading, given it was a 7.50 point range, which is beyond pathetic, and super-low volume.

INTC is trading down a little? No way. It must be like AAPL, down a little, then explode up huge. It can't go down. No way. ES under a little pressure? It should be exploding. INTC will turn up soon, watch and see.

I'm too funny. Look at the time stamp. Right at I posted that, it went from down to way up, jumping about 4% almost instantly.

Originally posted by jimkane

INTC is trading down a little? No way. It must be like AAPL, down a little, then explode up huge. It can't go down. No way. ES under a little pressure? It should be exploding. INTC will turn up soon, watch and see.

And just as fast it gave it all back!

And now headed right back up again.

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?