A$

todays spi with range ext

spi 12/3/11

You can see fridays distribution ..was a seller ...we have a sell zone from 4658 to 4667 today ..click the chart to get a more detailed view

MQG today

double click the chart for detail

A$$ wednsday.

spi wednsday

You'll have to double click the image to get the detail, resistance came at the reconection higher(4803) ..at the bottom of previous profiles.

SPI Levels

THE KISS PRINCIPLE

The text for this post is below the charts, hope it makes sense.




Todays post is all about the kiss principle, the best traders I know Keep it simple !
There are 3 charts to review chart 1 is an ordinary 30 min bar chart , the second is a market profile chart.the market profile chart is produced without any tricks it is a simple half hour chart where the time spacings have been removed and each 30 min bar turned into letters , and compressed.Each chart has a fibonacci re-tracement study on it.The point of the post is to show where to start such a study , and to do it in a way that has the trader instep with the market.the 3rd chart shows referece points that indicate how the longer term volume is set in the market, so we know which is the parth of least resistance when making trading decissions.
Markets move when a perception of value changes , this is most often caused by an outside infulence , it can be a central banks monetry policy anouncement, it can be a companies anual report to the market, it can be suply and demand of a comoddity or some world event.Wich ever it is we can be sure of one thing that the news will be in the price.And the truth is that there is no point in speculating the outcome of these events , if we get INSTEP , we can join in anytime.there is so much information that can effect price that it would be impossible to be on-top of it anytime so it's best just to trade the markets output.You may not get set at the very highest or lowest price ..but you will have the securtiy of knowing you are
INSTEP with the majority of participants at any given time.
Untill such an event occours markets distribute through a range of prices
( this process is random , as orders come into the market in random order) , during the process of distribution , all time frame participants can be drawn together, and we see this when moving averages converge.
The whole idear here is to identify when we have a new beginning , because it's our starting place to work from,if you are using a simple trading plan from fib retracements then its important to be working with the relevant data set.ON the profile chart we can see at the letter (a) we have a change in value , more often than not these moves will attract many participants and the period of trading will record higher than average volume.The fib study covers the initial move to (j), this distribution captures the force "at market" that pushed price higher.
notice that the bulk of the (a) period remain single prints .
( the force has with stood the challenge)

On the 3rd chart the reference points ( small red sqrs) show that over time the volume has also pushed this market higher.Further trading opportunities should be look at with a view to capture this backgroung strength.
All 3 charts are of different markets , but the principles remain the same .
chick on each to see the detail, and good luck, keep it simple.

By the way review all the charts and comments on the front page of this blog and tell me if I've been wrong ..

A$ monday

Just posting todys price action on the A$....against the static background.
So far we have rejected the prices at the extremes of the previous range.ther is a bar chart a couple of posts ago ago that show a differnt picture .check it out .
today has been a day that buyers have been most dominate so far ...but at this point there is nothing they can see to encourage them to push price above recient extremes.
thats what we know ..now .On the other had there is nothing to suggest they wont try ..our support is down at 1.0003..

Four Minute O'Neill Fitness Test

The O'Neill Fitness Test is designed to give a simple and reliable test of aerobic fitness. Aerobic fitness is a good indicator of general condition as it underpins 95% of all forms of activity.

After about 10 mins familiarisation with the Concept2 Indoor Rower, the test can be carried out to get an indication of baseline fitness by simply comparing the distance covered in four minutes on the chart.

Age ExcellentGoodAboveAverageAverageBelow Average




19-29 1281 1241 1161 1080 1000
30-39 1237 1197 1117 1037 957
40-49 1219 1178 1098 1018 938
0-59 1182 1142 1062 982 901
60-69 1141 1101 1021 940 860
70-79 1061 1020 940 860 780
80-89 993 953 872 792 712

Why do moving averages converge .

The chart shows the convergence of the mavs (21,55,144 )
But why do they converge ????
Because all the participants reach a conclusion , time allows them to be drawn together , to reach a balance or agreement of value.
If it is decided the value of something is $1 then at that point there is nothing to facilitate trade , in otherwords thers no imbalance everyone agrees !

This balance will occour at the center of a distribution of prices, once reached , to faciliate trade something must create an imbalance , and is usually some revevant anouncemant.
We can see in the chart how the market has completed a round trip.
From the initial breakout it has retreated 100% completing a distribution.
At some point in the future the maves will converge once again and from that point we will get a new move . Each distribution in prices has a beggining and an end, but the market moves on add on forever , continually moving from balance to imbalance ..or from effeciency to ineffeciency and back again .Or in other words the Mav convergence , is the end of one phase and the beginning of something new.

good luck.

E-mini S&P 500 and market comentary.

This market can not go down untill all the bears are long !!

Ok lets get down to buisness.

2 charts ; one a conventioal bar chart 30 minutes , showing the bars that produce above average volume ( highlighted in red and magenta).We had quite a high volume push into the breakout higher last session.With alot of people calling a market top last week you could imagine some of this volume was those with short positions covering.
The bulk of the volume in this distrubition is contained between 1318.50 down to 1314.25 this in statistical terms is the first standard deviation of the bell curve.
To trade the curve you can fade the price movement outside the high volume area
( 1st standard dev)in an auction system , like any real estate auction most people will participate at where there is a perception of value, and in that situation buyers will drop off as the price moves futher away from value.
Whilst this market has witheld the bullish back ground it is no surprise that recient anouncements have maintained this bullish stance and as a result the perception of value is now higher.Buyers buy when they assume that at some point in the future they will sell at an even higher price and make profit.
Chart 2 is a profile chart , where the 30 minute bars have been converted to small squares and time has been compressed.It is set to show the daily distrubitions.Support 1310.25 was tested many times but failed on each occassion to break.Some will rush to say this is a false break ..but how can they know that before it is confirmed, all the evedience suggests here that the most likely outcome from this distribution is higher prices , exactly what has happened.They will say things like the volume was low ..thats rubbish ,the volume wasent low its right there in red, the daily volume may be low compared to a high voulme month like last october or so ..but for this distrubiton ..in the NOW the volume was high.On the previous day the higher volume bars pushed the market higher from the bottom of this distrubition.it drifted back down during the night session on low volume only to find support and once again presenting value to buyers.Some people make predictions about the market without acutually taking time to look at what has happened , there to intrested in the last session bar , it's the background that drives price.
Our support now is from 1322 down to 1319
To get the detail click on the charts to make them bigger on your screen.



The pump price of petrol in the USA is at an all time high !...70c a ltr !!!

A$ trade setup Z says buy 10080

Look at the opening and closing prices in the profiles...( red o is open and red #is close)

how many are positive 4 of 5 .. drrrr buy the bugga !! sand r gave us a buy level ..I filled us now we have to decide what to do with some profits ..
thats not to hard a dissision to make is it ..sheeeezzz !

spi weeks end

Buy it ..why not

spi weeks end 5/2

Every picture tells a thousand words as they say .
Well here's a market looking for the arse end of the donkey .
there are 25 half hr bars ( or letters ) that have traded at 10087 and 21 at 10140.
I think it's resnoable to say that during this data set the market has defined 10087 as fair value and we have closed winthin a few ticks of it .
Computer charts have a default , and they put a gap between the bars or candled bars on all the charts.thats what you get , like it or not, the software vendors are telling you this is how you read the market because thats the way we put it foward.
Now go... allong and put on it a whole lot of studies that we have designed to help you work out whats going on ..GREAT !! to easy !!! ... is it any wonder 95% of people that try fail.
I great trader once said to me " don't be dictated to "

I take those words with a sense of caution, but I have used my format to cloapse time .and split ranges to suit the way i read the market and to find out just what it is thats going on as the various orders are processed through the market .
Nobody can predict the future but from looking at the activity we can get a fair idear of what every one is doing at the time ..they have blindfolds on when there playing pin the tail on the donkey ..they just try to feel there way around.
long or short here ?? would'nt touch it with a ten foot pole .. other gurus can have a go at being 50% right. it wont trade below 10065 in this data set ..and it re connects higher at 10120.the last profile suggests that most of the short term participants has been wise to exit over the weekend ...good on em !Leaving the previous sell off in tact ..we will have to wait untill the market reopens to see if it's going to continue.

12 hrs later on A$

OK the previous post A$$ 8.30 shows part of this trade setup.
On that chart we begin with some buying against the static background in the first split ( o,p,q,r) periods....if you look at the following data groups it's easy to see that the open close ( red highlights ) show that this buying activity is getting weaker and weaker as time progresses.An finally broke that range to the lower side.
On this chart we can see the result , the last group shows some responsive buying that has thus far failed to push through the medium term resistance @ 10038
The bulk of this data shows that the sellers are firmly in control of each data set throughtout the previous session.

It's intresting to note that the c,d,f profile shows the open close almost even , indicating the sellers have backed off , which is then followed by responsive buying in the last ( g,h,i j,k) data set.Only to hit resistance established during the previous session. Although in the srt term the responsive buyers have control it is important not to foprget the background when looking at future developments.

A$ 8,30 pm

Up Date A$ 1/2/11

spi

click it to make it bigger

Australian Dollar in profile

OK this chart goes back to the 24th of this month , I have removed time and compressed the previous 4 days distrubition.
the profile on the right represents trading through friday against a static background.
The things to note are the influence of the background ..
by removing time it is possible to view the process without a sense of randomness, presented by the order filling process.
We can see clearly that the market has moved from the top of the distribution to the botton and back again, this process is not randon.

A couple of levels to watch during current development.
The last profile shows some responsive buying with current resistance @ 9895 a break below 9830 would suggest a move lower and new price discovery . refer to low time frame indicators for entries and exisits.

Australian Dollar in profile

AMP Profile

Click it a couple times.

------------ BHP in Profile --------

Click on the bugga ( twice ) to get a better view ...

wrapping up a distribution I posted on this market ( the aust $ )2 weeks ago.
Well one thing is for sure the horozontal phase of the market has captured this data set.Our value price here is 9890. The mavs have converged 3 times and look like doing it again.Studues can not predict what will happen they are created from time past .When the mavs converge it is logical to assume that all time frame participants are drawn together.
The market won't move untill there is some outside influence to create an imbalance and a change in the market participants perception of value. No computer study has a direct line to the future.In that sense the process of orders commimg into the market is completly random.The one thing that is not random here is the nature of the market .It's horozontal building a distribution rejecting th highs and lows, in this phase of development , we can't tell in advance when a level will be rejected we only know that moves away from value see the price eventually return to it.
For the 250 odd 1 hr bars in this distribution 77 of them have done just that traded at the value price of 9890 (30%).Is it going to break up or down ??? I don't know I can only try to join in once the imbalance occours .

The previous post on this market wrapping up a distribution ..
well now it's overdeveloped.a push to the downside failed and that was followed by a push to the upside which has also failed.
We are at the value price here now ..and no real advantage untill it gets motoring.A 75% pullback of the recient rally is down at 9870 I think thats the level we might see a breakdown ..but yet to be confirmed.

Daily distribution of the local equity market

Does our Equity market have a value ? The answer is yes.
The chart below shows the value line at 4700 , swings included it has been to expensive above and to cheep below.the range is aproxmatly 200 points from
4600 - 4800 going back to october the 1st.
Time to move higher ? the current sessions suggest it can with support at 4765.

Swind tops and bottoms in Distribution.

The widest point of a distribution curve represents value.( red line)
Above value sellers see an opportunity and below it buyers come into the market.
On the chart below this is demonstrated :: the purple swing tops appear above the value price with the exception of 1.
The black swing lows appear below our defined value.
the mavs have converged around the value towards the downside and it has also recorded a number of swing tops ( in a lower time frame ) at 9840, this market looks like it is going down.a break of 9780 will confirm .

Wrapping up a distribution

Time to be ready again , the movinging avarages are converging towards the center of this distribution. There has been alot of random price action since the down trend moved more horozontal. But at this point all the action is drawing together at the widest part of the curve or the value price of 9888.How long this price will continue to control the market is anyones guess, but one thing is for sure there will be some anouncemant that will cause an imbalance and price will find a new value .

The development of a Distribution continued.

In this post I have chosen the Dow Jones E-mini futures contract as an example.First of all , if we sold the market above the 23% re tracement line , and bought it below the 75% retrace ment line we would have had some good trades.These levels both define the outer limits of the range, or in stastical terms the thrid standard devation of the bell curve distrubtion.
Now our beginning came from a point of effeciency ( arrow ) in the previous range , where all the mavs converged. This market is in it's fourth and final stage of it's development within this range. We can see that our maves are drawing together once more. Of the 232 half Hr time slots it has taken to produce this range 38 of them or 16% have traded at the main value price of 11634 , right on the 38% retracement level.It is not outside possibility that if we again accept prices above this level the market could be set to move higher.Current action has rejected that level , so it's a time for wait and see.With 38 Half Hr hits and the mavs converging it time to be alert.below 11580 and it could signal more down side , and above 11634 and we have an upside possibility.I'm happy to join in once it gets moving.Click on each chart to get a more detiled view.The best way to get a feel for what I have outlined in this post is to identify it on your own chart . Start with a blank chart of the dow , and draw a rectangle or square around the 4 steps I have shown on the bottom chart in this post.learning to identify where we are in the porcess puts you in control of the market and not the other way around.Go on have a go ..the mavs are 144, 55, and 21. the chart is 30 mins..put on the fibs , they can give you the bell curve without the overlay bell curve ..and just see if you can't see what I have described.


This chart below shows the blue profile overlay in the chart above , in it's daily profile sections. Combined it is the blue profile.The widest part of each profile is highlighted to show the price on the day which had the most hits.Above that line prices attracted sellers , and below it the prices encouraged buyers to participate.


This chart below shows the 4 steps of development.
1. is our initial vertical move away from the previous distribution.This move occoured after the previous distribution became effecient, i.e buyers and sellers reached a balance , this can be seen to be confirmed as the moving averages converge at a point.
2. The second step , is the range that stops the vertical movement , with the price action moving horozontally within the range of the initial move up.
3. The third step ; the market rotates about the step 2 range finding some extenshion.
4. The fourth step moves almost right through the whole range , and our moving averages are drawing together here , as the market draws towards another medium term effeciency in preperation for its next move. The important thing is to recognise which stage of development we are looking at . This puts us in control of the market , often the market will skip one of these steps and that tells you that something is exerting an influence that needs to be respected.If we know which step we are in we can join the procession, no need for crystal balls here, if the market decides to move off in a new step one higher now , we can join in and know which part of the new development we are involved in.

Up Date A$ 6/1/11

OK ...we have made the retrace almost down to the 75% level ( @ 9856 ). and level with the previous buying tail.It has regestered 20 half Hr bars at 9920 which is probably enough to suggest that the down side is over for now in the medium term.The red bars show that at these levels the volume is quite high , and that indicates that at these levels the larger commercial intrests are prepared to participate in the market.The bulk of the current range is between 9955 and 9890.I think the play here is to fade these levels with caution.The reference points 1. // 3. indicate that there is a possibility that bearish sentiment could prevail ..and untill the we accept prices above the 50 % retrace level 9964( and ref point 1.)we have to be prepared for further falls.However also refering to the background is that buying tail ..I would'nt be entertaining longs if thats taken out.

Distributions .1.

Good Luck and good trading to everyone in 2011.
I'm going to start this year looking at the market ,in it's component parts.
The idear is to see when we are in a distribution phase , where the bean machine is holding court , and when the market changes its character and morphs into a vertical phase of development.The main aim is to learn to identify the condition of the market.
Chart one is the Australian dollar , 60 minutes .
There are four charts in this series below. Click on each chart to get a closer look.



this second chart shows 2 vertical phases and a distribution.( highlighted.)




IN chart 3 below we have identified a begining, where the market moved out of a distribution phase onto a vertical phase. If we start at the beginning ,we now have something to work with. And from the beginning I have added the Fibonacci retracement levels.





This last chart shows a new distribution ( blue ) developing inside the larger distribution.green. You can see that the vertical move came from the center of the previous distribution , the value price. Often when a distribution is comepete , buyers and sellers have reached a balance, the next phase is price discovery , or a vertical phase .