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.

thanks ches!

Originally posted by tx_ches

Here's a good way to do it:

Watch this bearish ABCD here (97.75 for the 1.0000). But, I don't think it will play out, since we are likely in the 'chop in the low end of the range after a big drop' mode, or they intend to rise it, off the SL and such like shown on rat's chart. I'm very short-term long side bias intraday 'in case'.

If this overcomes the bearish ABCD here my next levels are:

1300.25-.75

1302.00-3.75.

Amazing, no matter what it does from here, how this ABCD stopped it dead. Like last night, I thought they'd run it higher, and the ABCD stopped it dead (it was the first level there, too), and after many, many attempts to rise it, they finally gave it up. Understand, the layout is different here after this big drop (and hence I think the ABCD won't hold), but the point is, whether the area and pattern plays out or not, many times it still stops the action dead for a time.

I have a 'magnet area' in BAC at about 6 in early to mid-August. I'm not saying it will keep selling, but this area is playing the siren song to it, I feel, and I'm surely taking that into account when I look at BAC from a 'management perspective'.

I can see how it gets there after the complete failure to bounce, and the recent compression...

Yes, that set shows it quite well.

sorry, sc moved it a little.....fixed here

Originally posted by jimkane

Yes, that set shows it quite well.

neither of these make me want to go long here either:

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?