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.

Wow, after the initial move (right to my highest area...) this just went to absolute s#%& action. A total sleeper. roofer once again nailed it dead on perfect, catching the big move, taking it off, and then quitting for the day. Perfection, to the n'th degree. As usual for roofer. Great job.

How funny, and idiotic. The market does zero for basically three straight hours, trading in a narrow range. It closes, opens up fifteen minutes later, and breaks the range to the upside. This, while MSFT is dropping hard, about 4%, off its aftermarket high... Go figure.

Okay, here are my higher timeframe levels. I think we will be seeing them very soon.

1368.25-73.75

1391.50-93.50

1429.25-32.75


Note that there is a lot of stuff right at the previous high area of 54.50, so, although I just can't see it, it might struggle there. I also have a minor area around 1406.25.

If this is now the 'W3' acceleration phase we may see the second, even third level on this in the next few trading days. I think a hint about a debt deal might run it up say later today/tomorrow, then a finalization over the weekend, and we see the big Sunday night up, and by Monday AM we are trading ES 1390's (or even 1430's???). I could see 45 points in a few days easy, but to get to the 1430's, that might take a few more days after that.

By then the Euro should be at or well over 1.50, and the DX might take out the lows. I have areas in the 72's and then 71's, and if they don't hold, the all-time low at 71.05 may give way, and I just don't see how that won't induce panic... The bigger the panic, the higher the ES should go (insane, isn't it???). Okay, just some thoughts, perhaps none of them come to pass at all. It's just a framework I am working with.

BTW, I bet a gazillion dollars that MSFT will be up tomorrow.

Here's something for everyone to ponder. It has to do with my posting of my levels/areas. I was hoping everyone already figured this out, but it seems I expect way too much of people, or expect them to figure things out from minute clues I leave. So, given that, I'll explain.

Keep in mind, this is not an every time thing, it's just something I've noticed. Perhaps it isn't even correct. I'm just presenting it here as my opinion, my thoughts on the subject. Now, notice when I post levels I don't usually say something like 'If it goes up, here's the levels I am looking at, and if it goes down, these are the levels I am looking at.' That may indeed be impressive, for someone to do that, if the levels did produce some tradeable reactions.

If you pay attention you may see that what I generally do is post levels on one side of the market. I post them above, or below, for a given timeframe. One side at a time. And what seems to happen many of the times? The market makes a move for the levels. The most common thing lately is to get only to the first level. This, to me, is a behavior right now. At some point it may start trending more and get to the second or third levels. That's not the point, though.

What I was hoping everyone was seeing is that I am usually (I think) posting levels that the market does indeed head for. How do I know which side to post levels on? Maybe my track record isn't as good as I perceive it to be, but I think I am better than random at doing this. Understand, when a market starts to come in and I have higher levels let's say, I may post shorter-term levels for it to come in to, but this is not posting both sides of the market levels (for a given timeframe).

Notice that when I do this, I generally say something like 'If this drops any lower than here (which I doubt) here are two levels I am watching.' This is in the 'context' of the resumption of the trend and the reaching for the higher timeframe levels. This is a very important concept, and one that I want everyone to be aware of when reading these posts.

Let me reiterate once again: my levels frequently aren't hit. Sometimes the market reverses the second I post them. This is a probability game. My approach is to come up with a working premise (or two or sometimes three), and then assume it will play out. I then position for this, and let things unfold, and manage according to what unfolds. I feel that's all I can do.

I see many traders trading without a working premise. I don't see how anyone can trade without a premise. Many, many times the premise doesn't play out. So be it. But without a premise one is a deer in the headlights. How can a trade be opened without any working premise on what may be unfolding? So, I form a premise and I act on it. Most of the 'work' is in managing things as they don't go according to the best case scenario.

In conclusion, think about this. If I say I am looking at some levels below the market, and then the next day or so I post how it hit the levels, and then I post I am looking at some levels above, and later that day (if it's an intraday level) or the next day I say the level was hit, you are seeing my 'bias'. If it plays out more than random, then it makes sense to me that playing for that potential move is my plan.

Now, I in no way want anyone, ever, to make any trades based on any post I make, as this is a purely educational forum we have here, but I do want people to see, in advance, what my 'bias' is, what I am trying to do. I want people to study these levels and try to do the work on their own and duplicate them. I want people to study the layouts, trying to grasp the 'context', so they can see what the chart looks like, and where my levels are.

Hopefully, with enough practice, one may be able to see why I am looking at the side of the market that I am. All this is no panacea, but I think it should help one in developing a bit more towards gaining an 'edge'.

great posts jim

I can see a context where your areas come into play if and when

jim has stated his premise.... here's mine....the computers run the market.everything i know they know. i can not beat them at their game.. all i can do is hitch a ride by hitting predefined trade setups in the context of the geometry given by medianline sets.each trade has a target given by lines. if i can not see minimum 4/1 rr i pass on trade.

Great posts, Jim and roofer. As I struggle with "context," I also struggle with "premise." I definitely need to improve in these areas. I "feel" I get slammed the hardest when I have an up or down bias. I therefore try to not trade with a bias, because it does not seem to work for me.

I think I have a slight edge on trades at the open on short timeframes. This may be insane. My trading is marginal, at best, but I love trading and strive to improve. I post here because my posting definitely helps my thinking, and human networking, and I hope that my posts may be of use to someone else. I do not want to post anywhere else on the net, at this time, where I might risk exposing the KaneTrading methods, and I think there a lot of impatient people out there. I think the people in here are "the real deal" and I have high respect for all of them.

I would like to continue posting in the "Trading Discussion" area, but if this is distracting, I can switch to "Al's Trades" area or something else. I enjoy being explicit.

Good Trading All,

Al Kamego

Chart. Very nice Kane EXP ABCD.

Al Kamego

Al, I like seeing your charts here

rat

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?