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 April 14, 2004 Commentary
(mid-week edition)-
Today I'm going to cover an
assortment of things that have been going on at Kane Trading. After I go
through all that, I'll show one thing that I am looking at on the
charts.
Let's start with the new book, Kane Trading on: Multiple
Timeframes and 'Context'. It's done, and at the printer. I have been given
a date to pick them up of next Wednesday. That's just one week from today. I
want to thank all the people who have inquired for their patience, and it has
been quite a few people. I'm finally done, and I think the wait will really be
worth it. It's just my opinion, but I think the material in this one is really
something.
I am planning on getting the book on the 'Books' page as soon as I can,
hopefully by the end of the weekend. That way if you want to go ahead and
purchase the book then you can. I will ship them as soon as I get them from the
printers. If I don't get this added to the books page over the weekend, I'll
have it up before Wednesday.
The next item on the agenda is an article I recently
wrote for The Technical
Analyst magazine out of the U.K. The article is entitled 'Fibonacci and
harmonicity', and it appears in the April issue. If you click on the magazine
title above and then go to 'Current issue' my article is listed under
'Techniques'. Of course when this commentary you are now reading hits the
archive section, future readers may need to click on 'Back issues' at that
point.
The article covers some of my ideas on how I judge the relative
harmonicity of an issue, and how I use some of my various Fibonacci techniques.
There shouldn't be anything all that new to those who've read my books and
follow my commentary, but nonetheless it should be an interesting read. I cover
some of the ideas that I posted in the free article on the topic.
Understand that I haven't seen the article in the magazine yet, so I don't know
what, if any, editing was done. Be easy on me if they had to take a little
license to meet their publishing needs.
Moving on, Scott Carney over at Harmonic Trader recently wrote an
article for eSignal entitled 'The
Origin of the 0.886 Retracement'. In the article Scott explains how we
collaborated and combined his pattern discoveries and my quantification of the
.886 retracement to bring 'Harmonic Analysis' to its current state of affairs.
For an entire week this article was dead center on the home page of eSignal.
I've never been so flattered, to see work that we have done front and center on
such a big time site. The material in this article is also laid out in Scott's
new book 'Harmonic
Trading of the Financial Markets: Volume One'.
The last item
I want to cover is a live chat room that Scott has been putting on over at
Harmonic Trader. I assist Scott with the room, and it has been quite
interesting. Although I am not in there 'full-time' every day, I try to get in
there for most of the trading day. The room is purely 'educational' in that we
never direct anyone to make any trades (of course).
The chat room
allows traders to see us 'at work' discussing what we are looking at, what we
are waiting for as far as setups, and making frequent live calls as to what we
are in and how we are managing the plays. You can also ask questions, as it is
interactive (understand, though, no questions about any specific trades can be
addressed, as this is strictly educational).
I am telling you all this here
because Scott has graciously allowed me to invite my readership in for a free
trial of the room. All you have to do is e-mail me and I will send you a link
and a password. No credit cards, no additional info needed, no obligations,
nothing but your name and e-mail address and you can check it out.
Let's take a
quick look at something I am watching in the SOX index. We are seeing some
selling after the nice run up off the grouping I posted recently. The broader
market is acting like the correction is over (we'll see on that one). Now a
nice bullish setup is shaping up, much like the one we just had into the recent
grouping, but on a smaller scale. I'll show a 60-minute chart of the index,
showing what I am looking at.
The SOX is setting up with an ABCD pattern,
set up to continue this recent uptrend. This is the type of thing that I want
to see if the long side is going to continue as the side to play. Let's look at
some groupings that I built.
The SOX has three clear areas that I want to
watch. The upper and lower groupings also have some additional key numbers in
there. The .300 and .382 retracements of the recent reversal low fall right in
there, as well as the .486 and .618 retracements off the noticeable swing-low
on the run up. The groupings also have the 1.128 and 1.272 external
retracements of the BC leg, and the 1.000, 1.128, and 1.272 price projections
for the ABCD.
It is truly remarkable how distinct the three groupings are. This
is a classic example of what I call 'harmonicity' in an issue. Notice that the
SOX has started to bounce strongly off the very top of the top grouping. It is
possible that this is it. Or it may be like the AMZN trade: a bounce, and then
a roll and a full test of the groupings. If I get a signal tomorrow morning my
strategy is to take it, and if it rolls over, manage it like I did the AMZN
play. Then I'll look for a re-entry after another test of the lower
grouping(s), if I get an entry trigger. This is the type of thing I lay out in
real-time in the chat room.
The next commentary will be the weekend edition, posted
on Sunday.
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