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 November 25, 2003
Commentary-
Today was an incredible day for trading. I
saw quite a few things that may be of interest to the intraday traders out
there. I'll start with a 3-minute chart of the ES, and what was, in my opinion,
an outrageously nice setup.
After trending up, the ES came back down to
test a .618 retracement. But it did the test as an alternate
ABCD pattern. See if you can spot
where the pattern is that I'm speaking about. Let me highlight the ABCD on the
chart.
I've only shown the three major
calculations for the grouping that I used to define the ABCD completion point,
but there were other numbers in that area to further the support. The 1.272
alternate price projection landed just about on top of the .618 retracement, as
did the 1.618 external retracement of the BC leg. This showed me that this is
an area that may cause a significant reversal.
Now the really interesting part
starts. The 'test' of this reversal point came in the form of a really nice
5-point pattern, which I've highlighted on the chart. I've shown only the basic
framework of numbers for the critical areas. So, we have yet another intraday
ABCD pattern to trade, in the context of a 5-point pattern. Let's see what this
one did.
I got a very good entry signal on
the 1-minute timeframe, right after the ES came out of the potential trade
area. Regardless of your management style, this one had plenty of potential.
But it doesn't end here. I was watching an upcoming area, not only for
management reasons, but also for another potential trade. I'll simply outline
the pattern for you, and let you go back on your own, if you want, and look at
the numbers. I'll put an arrow on the chart to point to the potential trade
area from the last trade.
This one gave a mini 'double top' for those traders who wanted more
confirmation before entry. Pull up a 1-minute chart and see what kind of
entry signals you see there. This
reversal was a 'slam dunk' trade. This is some of the best intraday trading
I've seen in a long time. The ES is just forming pattern after pattern
intraday. This is better trading than I expected during the holiday
week.
Keep an eye on the daily bond and ES charts, and the groupings that
we are watching. I'll try to discuss those in the commentary to come. I'll also
try to vary the markets and issues that I cover a little bit more. Let me have
some feedback. Would you prefer a more limited scope, as far as markets, with
more follow up on things, or a lot more variety and consequently less
follow-up?
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