(Click On Chart To Enlarge)
Bullish Pattern #4, a little Symmetrical Triangle (pattern in blue) just broke out. The Bullish Inverse H&S target of 26.40 got MADE shortly afterwards.
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About Me
- Melf Elf
- Blog Purpose: To share with others what I know about technical analysis and about trading. I am not licensed to give financial advice. I never do so. I don't try to "predict" the market. I try to FOLLOW the market, as best I can. I honestly don't know how high or low a stock is going. I'm not a psychic. I mainly look at chart patterns, trendlines, support and resistance. If a pattern breaks out or breaks down, that gives me a price target that is IN PLAY. That doesn't mean that the target will get MADE. Some do. Some don't. While I try my best to answer questions that are directly related to any of the posts that I make, I don't have time to give individual tutoring. Please check bookstores, libraries and myriad sources on the internet on the subject of technical analysis and take advantage of those resources. Thank you for visiting my blog. I hope that you are able to learn something while you are here.
5 comments:
Great charting, Melf! And great blog, thanks again for pointing me to it.
I'm wondering why you choose to do your charting with SSO instead of going to the source and using SPX. Seems like SSO might have just a little slop to it compared to SPX. Theoretically they should track the same, with SSO showing twice the price movement as SPX. But because SPX is the real driver, seems like it would be the safe one to chart.
Thanks so much for your blog Melf. My heros have been great chart pattern readers. I have been trying to do that for 6 years or more and still not near your line of sight.
I have just discovered your blog, Melf. Is this the beginning of something sustainable?
Thanks.
Also, I think it was you who discussed filling the gap on Atilla's blog as a very basic trading pattern. How reliable is trading this? I suspect that it works on a high percentage of time, but not always?
(I'm wondering why you choose to do your charting with SSO instead of going to the source and using SPX).
Greg,
I look at them both, but the SSO gave me a little more accurate picture of what was going on.
For example, the SPX chart showed a close of 846.75 for Monday and an opening gap on Tuesday of only 848.92, which wasn't nearly reflective of how big that gap up opening really was.
The SSO closed at 24.73 on Tuesday and opened at 26.44, almost 7% higher, which was much more reflective of what was going on, and it also provides more accurate data for calculating the Fibonacci retracements of the opening gap.
On the pullback, the SSO also nailed the gap-filling Double Bottom, within a penny, at 24.72. The SPX went about a point and a half below it, which still was okay, but I liked how the SSO responded immediately on the gap fill of 24.73.
It's also easier to calculate targets using smaller numbers, like the SSO's Bullish Inverse H&S breakout (target was 26.40), vs. using big SPX numbers. I was playing the SSO, so I just went ahead and used that chart, but using the SPX chart certainly is fine.
(Thanks so much for your blog Melf. My heros have been great chart pattern readers. I have been trying to do that for 6 years or more and still not near your line of sight).
Lana,
I've been doing it for a lot longer than that, and I STILL have a lot of room for improvement;)
(I have just discovered your blog, Melf. Is this the beginning of something sustainable?)
Katzo,
No, I post an entry only occasionally to share thoughts, and for learning purposes. I posted so frequently yesterday because of Atilla's call for SPX 940-950. Greg and I didn't get our Bullish Wolfe Wave upside explosion on Monday, but I felt that it was "lurking" in the charts. LOL. I felt that if I could find anything bullish to support the big rally that Atilla expected, I wanted to play it.
Wow, we sure got an upside explosion yesterday, and that was a GREAT call that Atilla made, huh?!
(Also, I think it was you who discussed filling the gap on Atilla's blog as a very basic trading pattern. How reliable is trading this? I suspect that it works on a high percentage of time, but not always?)
If it's a gap into resistance, you have a MUCH better chance of getting at least a 50% retracement of the difference between the opening price and the prior day's close. If there's A LOT of resistance, you really want to short the gap opening because those "Gaps To Crap" often completely fizzle, and reverse to the downside.
But, if you think you've got a good chance of getting through the resistance, then an entry long on a 50% retracement, or a 61.8% retracement is a real decent entry. If it goes red and starts tanking on you, get the &%$# outta there! LOL.
If it's a Breakaway Gap out of a pattern (either to the upside or downside), there often is little to no pullback at all. I feel lucky if they'll let me have it on a 50% retracement of the gap. The idea there is that they aren't going to let you in because it's a bullish breakout (or a bearish breakdown) and it's a "Gap And Go" day vs. a "Gap To Crap" into resistance that fails.
Thanks for your comments, folks ;) Best of luck to all of you!
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