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 May 26, 2004 Commentary
(mid-week edition)-
Let me start out with a website
related issue. I have just discovered (after finding error messages galore in
my website stats) that I accidentally deleted May 16, 19, and 23 from the
archive, as well as about half the rest of the website. It's all been been
resurrected and is now 'back on line'. I was trying a new way to move files
around, and I guess it doesn't work. The problem is corrected, so if you were
among the many who tried to access those pages, please try again.
Today I'm
going to update the grain plays, and then take a quick look at something in the
ES mini from today. The corn and wheat plays have turned back up, and are,
again, looking pretty good. They don't give me the feeling that they are going
to 'work', though. It's just a feeling I get when looking at the charts, but
I'm going to let them do what they do regardless, and let my management plan do
its thing. Let's look at the 15-minute charts for these. I'll start with
corn.
Keep in mind that the 'traded timeframe' is
the daily, and the 15-minute chart is way too fine to do any management on. I
only use it here because the play hasn't gotten moving enough yet to use a
higher timeframe for showing anything. The arrow points to the approximate
area, as I outlined in a previous column, where my entry was triggered. Let's
look at wheat.
Wheat stayed stronger on the 'test', but is
now 'underperforming' the corn in a sense. The arrow shows, as on the corn
chart, the approximate area where my entry was triggered. It's going to be
interesting to see how both of these issues handle the 'overhead
supply'.
Let's move on to an interesting thing that I saw today in the mini.
This is something I have seen often, but usually not to the extent that it
appeared today. I'm going to start by first mentioning that today was one of
the worst intraday trading days for the mini I have ever seen. Some 'scalpers'
may have done okay, but for my style of 'intraday swing-trading' it was
rough.
Now, that's not to say it was a losing day. Every play I got
triggered into went in my favor. It's just that it went 1-2 points and then
reversed. This led to a series of scratches. There was no follow through, and a
ton of program games. I have no problem with scratching repetitively, because I
almost always catch a nice move by being persistent.
Today,
though, there were no such moves. I worked very hard but came out where I
started. Some days are like that, and that's trading. One interesting thing was
that every trigger I had immediately moved in my favor, and that rarely
happens.
Let's look at what I noticed in today's ES. Today was a day of ABCD
patterns. The ES did at least 5 distinct ABCD patterns set up to continue the
upward bias/trend that has started on the 13-minute timeframe. There were also
multiple bearish ABCD's throughout the day. If one just played the reactions
off these patterns, it could have been an incredible trading day.
Let's look at
a chart, highlighting the bullish ABCD's.
The fifth ABCD rolled over, and then took off
to the upside, but otherwise, these patterns pointed to areas where reactions
took place with uncanny accuracy, in my opinion. Let's look at some of the
bearish ABCD's. Keep in mind, these would be against the upward 'flow' and are
set up to reverse this 'flow'. You all know how I generally feel about
that.
The bearish ABCD's also pointed to some great
areas where reactions occurred.
I usually play for intraday swing moves, but
none of these plays from today started a trend that I could ride for any length
of time. They did assist me in positioning for the trends that may have
potentially emerged. For those who play quick pops off these types of patterns,
and then go out quick at a profit target, this may have been a truly stellar
day.
It was quite amazing to see so many ABCD patterns in one session.
The more I play these patterns, the more enamored I get with them. I guess
that's why I wrote my book Kane
Trading on: Trading ABCD Patterns, showing a host of new and different
twists on trading this way. And still, I don't think that many people look for,
or play, these setups. All I can say, as I've mentioned many times before, is
that if I could only trade one setup, it would be the ABCD pattern, set up to
continue an existing trend.
The next commentary will be the weekend edition, posted
on Sunday (or perhaps Saturday this time).
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