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.

Kane 4PCP completing at 0.300 fibo.

Al Kamego

Kane EXP ABCD completing at 0.146 fibo. Price strength at 1.128 DBS.

Al Kamego

A bearish scenario on ES 120.
It's possible the D point could form up around 1320-1322 to complete a TD bear abcd.

I don't like the $TICK divergence. It has made lower highs while the indices have made higher highs. $TRAN is making LHs.

interesting thing happened at yesterday's low....abcd into .618 of both big up moves.....tell you the truth, I was kind of looking for .685 at line

tx, are you looking pullback and run into something like a 1.27 dbs?

hmmmm....was that just the .886 that pulls it back?

I'm torn....here's the bearish scenario...

I think I'm going to have to see some divergence somewhere (other than $TICK). Looking for it.

Originally posted by rat89

tx, are you looking pullback and run into something like a 1.27 dbs?

The bull abcd just failed on the 5 minute indices so I think the bears are taking control for the lunch hour. DIA had the best example I think.

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?