"Have we now topped . . . " Part 4: 2nd Retracement, then, DOWN ?

Discussion in 'Index Futures' started by Wallace, Oct 29, 2018.

  1. Well the Price has certainly dropped thru all the MAs.

    MAs D fri oct 26.jpg

    The outer red Price Channel Lines are the extreme and last of the Rising Price Channel Lines based on the points used to draw the original Channel. The Falling lines are still working.

    LINES D fri oct 26.jpg

    If the Price were to work off the fibo drawn here, it looks like it could drop a LOT.

    Fibo M fri oct 26.jpg

    'Oh Goodness, more lines'.
    Actually I haven't used Price Channel Lines since I used to use MT3 and trade the eurusd where they worked quite well, on 1 and 5min charts.
    Although the Sep/Oct H is higher than the January H, the Price 'could' hold above the formation's LL.

    W 2  fri oct 26.jpg

    Presumption here is there Will be a Retracement, and then the Price continues - - - DOWN ?

    Fibo D fri oct 26.jpg
     
    piezoe likes this.
  2. Retracement fibo levels: Wed Oct 17 - HH 2819.250 ~ Fri Oct 26 - LL 2627.250
     
  3. piezoe

    piezoe

    I normally want to look at the longer term picture (monthly bars) when considering a correction. The market (S&P) was coming off a dble top which because of the parabolic nature of these last two rises to new highs old hands would recognize as more likely not sustainable, i.e. the market is more likely to correct downward than to move sideways and then resume its upward trend. Looking at the S&P long term trend lines one sees the likely resting places and points of reversal for a correcting market. So far everything, I would say, is within expected behavior. If the market fails to hold above 2500 then I'd be concerned that something other than a significant October correction is afoot. What did surprise me a bit was that this didn't wait until after the election. I'm not used to large corrections going into an election. Has the Donald not being paying proper obeisance to Wall Street? :D

    upload_2018-10-29_10-7-51.png
     
  4. 2nd Retracement fibo - yellow - :
    Wed Oct 17 - HH 2819.250 ~ Mon Oct 29 - LL 2603.000

    I'm using a dedicated 5min chart to display both Retracment fibos —
    don't want to get overloaded with , , , LINES — ; )))

    2nd R fibo.jpg
     
  5. bone

    bone

    x2

    Don't bother using Daily and intraday data to call a top to anything.
     
    piezoe likes this.
  6. I should have included the LC right from the beginning but . . . . .

    3rd Retracement fibo - white - :
    Wed Oct 17 - HH 2819.250 ~ Mon Oct 29 - LC 2643.00

    3rd R fibo.jpg
     
  7. bone

    bone

    Most people who have come to disavow TA came to that realization trying to make it work on short intraday timeframes. To say that an instrument has reached a valuation limit; or has been overbought or oversold on the basis of higher frequency intraday data sampling is courting certain disappointment if your allegiance and market viewpoint is devoted to conventional TA and high frequency data sampling.

    What looks like resistance on a five minute chart can very well be support on a longer timeframe chart. An overbought cycle on a five minute chart could be in oversold cycle territory on a Daily or Weekly. Fibonacci retracements on 5 minute charts will not correlate to FR on 90 minute charts.

    When you can get multiple timeframes to reconcile - that’s another matter.