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 May 15,
2005 Commentary (weekend edition)-
My plan for
this weekend's commentary was to show some of the fantastic setups I posted in
the members' section
this week in the indices and sectors. But you know what they say about the
best-laid plans of mice and men. I guess that applies to traders, too? The
problem is that all but one of the charts have my new numbers from Kane Trading on: A Totally New 5-Point
Pattern on them, and those numbers aren't 'public' yet.
I only sell
that book as part of a full set package, and not alone. The only source for
that work and those numbers is in the book, and in the discussion in the
members' section. To be fair to the full set buyers and the members I am not
going to give that away in the free commentary. That's not to mention to be
fair to me, since that is the culmination of a four-year project to discover
and develop those numbers and their application.
I'm not saying this to play up how
great this material is, and how you should buy the books or anything like that.
If you can't clearly see the value in my work then don't buy the material. And
if you can, I'm talking to someone who already knows exactly what I'm talking
about. I bring it up here because it is getting more and more difficult to show
high-level work in this free commentary, given that I am not going to give
everything away free.
I give away a lot more than many have in all
of what they charge for, and I've been told that quite a few times by some very
experienced traders. This commentary is meant to introduce the reader to what I
do, to see if the approach may be of some potential use to one's 'Trading
Plan'. It is not meant to be an entire treatise on my methodology. That's what
the books, members' area, and mentorship are for.
I was going
to try to delete off the material I didn't want to make public, but that takes
away a good part of the key areas for many of the examples, and it just doesn't
make sense. So, for today I'll just show one setup in the XOI that I pointed
out in advance, and mention that I also hit the S&P, the BKX, the
Australian dollar (from the previous week), and some other things just about
dead exact, in advance.
Again, the members' area is not a 'picking service', and
I emphasize the 'in advance' stuff in this commentary so that it is clear I
show what I am watching in advance, and then do follow up discussion as things
are unfolding. I don't do everything after the fact. I feel that I could and
the service would be just as valuable, but I mix it up so it is clear I can
spot these setups in advance, lay them out, and teach from that perspective. I
present this in an educational format, with hints and ideas as to what
supporting and 'context' things I might be looking at, many times with
'homework' for the reader to do, and ideas on where to study.
When I do
this free commentary I feel 'hamstrung'. I can't really get into too much
detail given the space and time, and lack of timeliness. I can't assume
everyone is familiar with my methodology or what is in the books. It is a real
challenge, one that has gotten a lot more difficult for me as time has went on,
to put something decent together in here every week.
I am running
on and on here just to keep all my faithful readers apprised of what I have to
go through, and the decisions I am always faced with. I don't want to always
talk about the members' area and how you should buy the books, but I have
reached a level where I now clearly know what I have.
I am being
told constantly how incredible it is by full set buyers (many who run hedge
funds or are floor traders and such), members, and mentor students, and I am
'going wild' in the members' area showing the best, latest material with the
latest revisions, applied in the current market. It is getting more and more
difficult to do a 'sound bite' in here every week, have it follow the theme of
showing what I do, be of some value to the reader, and not sound like an
endless promotion.
So, the dead horse I have been beating is now ground
into a pulp at this point. I'll move on to the XOI, and then I'll throw a
couple more things out there.
The XOI had
already set me up with a nice move down from a ML and trendline intersection.
This area had a tight overlap from the previous two swing-highs, and both the
retracements were numbers I discovered and are not 'public'. It then followed
up with a drop to the ML lower //, right at a .786. Another reversal back to
the trendline where it intersected with a division line.
And what hit
right there? My number from Kane
Trading on: A Totally New 5-Point Pattern. (It's not that all my new
numbers are so special, it's that I know what they are, and I can then look for
tight overlaps (harmonicities)
that are synergistic with the ML's and trendlines and such. Without all the
numbers I simply can't see the areas.) I pointed this out in advance in the
members' area. Let's see what happened.
The XOI
dropped like a rock right off the area. I can play this index with various
individual stocks and EFT's. I laid out similar scenarios in the S&P, the
BKX, the XLF, and so on, that played out pretty much just like this.
Let's look at
a setup in the Australian dollar that I posted in advance.
The Aussie
dollar was forming an ABCD pattern right at a trendline. I'm just showing the
basic setup here. Do your own grouping work and it is quite clear why I liked
this area.
I'll finish with a 3-minute chart of the ES.
Here's a ML
set I had on the chart well before the open of the market on Wednesday the
12th. In fact, I had this on my chart on Friday the 9th. This is the type of
thing I show all the time in the members' area. The benefit of showing and
discussing things like this in advance is invaluable, in my opinion, from an
educational standpoint.
The red horizontal line is the daily pivot. I
highlighted all the areas where there was a reaction or an area where I
expected price action may head towards. I haven't shown any fibs or setups,
just a framework I used to guide me as I did what I normally do. Can you see
the value of this set from days before? I wouldn't want to trade without
it.
My methodology has evolved to one of 'synergies'. The basis is the
ABCD pattern (not necessary, but I always look for them), fib groupings based
on many numbers (many, if not most, are ones I discovered, like the well-known
.886), harmonicities, ML's, 'context', and the rest of the aspects I laid out
in the books. Each aspect has its part to play, and they all fit together to
form my methodology. Without all the pieces I wouldn't have my
methodology.
I developed all this together, like an ecosystem evolving over time
so that all the members of the community have a role and are part of the entire
system. That is why it is getting harder to show just a few almost 'out of
context' pieces and hoping it demonstrates how valuable I feel the entire
methodology is. But I'll keep trying for my readers…
The next
commentary will be next weekend's edition, posted by Sunday May 22,
2005.
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