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 August
7, 2005 Commentary (weekend edition)-
It's getting
more and more difficult for me to come up with commentary to put in this column
each week. I have been writing here for almost two years straight now, and I've
done about one hundred and seventy commentaries. My time is heavily invested in
the members' section
now, and the level of that material is seemingly forever rising. I have a lot
of material in there that I simply can't give away for free, to be fair to not
only myself, but to those that have paid for the book sets, membership, and
perhaps a mentorship.
This becomes an issue for me because most of the
chartwork in there has material on it that I can't post to this free
commentary. Every week that goes by it gets more and more difficult to find any
series of charts that I can show. And the level and detail of the work is tough
to digest 'out of context' of the work that preceded it. That almost leaves me
with having to write a completely new commentary for the free weekend edition
each week. That wasn't such a big deal before I started writing five full
commentaries per week on average for the members' section, and doing some 30+
charts.
By the time I get done with that, and devoting well over forty
hours per week to my own trading and trading preparation, and then add on that
I'm involved with not one, but two new projects here at Kane Trading (which I
have partly revealed to the members' and planned to reveal to the 'public' when
they were at a more advanced stage), and I just can't find the time, energy, or
motivation to write yet another new commentary each week. I hope that clears up
a bit of why I mostly like to take from the members' area for this column.
Even
at that, as I said, it's getting more and more difficult each week. I am not
sure yet what I plan to do about this dilemma. I don't like to present anything
less than high quality in anything I do. As I have said, the role of this
commentary is to introduce my work so those that feel it may be of some use to
them can make a more informed decision about the products that I offer. It has
turned into much more than that, and I have been told more times than I can
count that my commentary has given away substantially more than most people
offer in their entire paid programs. I find that curious, since the level in
the members' area is so far above the free commentary I can't imagine
that.
I am laying all this out now because I feel I'm 'fading' in here a
bit. I'm not sure exactly what direction to go in. As I have alluded to, I may
drop the free commentary. I don't want to do that because I have so many
faithful followers. On the other hand, all those that have bought full book
sets and are really finding my work useful to them are now in the members'
area. The free commentary is of limited use to them. And those that just follow
along every week and try to glean tiny little additional details out of what I
am doing, well, can I afford to add the extra work so they can keep trying to
get more from me without making any contribution to supporting this project?
I'm not sure. One thing I am sure of is that I can't keep working this many
hours for too much longer.
I would be happy to receive any feedback on this topic
that the readers would like to send in. For now I have no immediate plans to
stop the commentary, but I do need to come up with some type of solution to
this workload issue, as well as the issue of not being able to borrow easily
from the members' area. On the other hand, the level of the members' area and
the new projects I hope to wrap up in the next few months offer material at the
highest level I have ever offered it, in my opinion, and those that are
committed to their trading education, and want to learn some of what they need
from me, are really benefiting from my work there. I guess my focus is shifting
to the handful that are deadly serious, and think I can be of help to
them.
With all that said, let's look at some charts. First, I'll follow
up on that XAU chart, and then I'll show some assorted charts and commentary
from this week's members' area.
Recall back two weeks ago when I posted the
XAU chart on Jim's Chart of the Week. That was when the XAU was hitting the
first line intersection right above the grouping area. It rolled right over
there as expected, and then rolled right down to the next line intersection,
also as expected. I have rarely seen anything go from area to area, setup to
setup like this one has lately.
I explained to the members' that my play was
long. I was using stops set in a manner right out of Kane Trading on: Trade Management,
and I had my stop just under that reversal low where the lines met. That stop
was never hit, and the XAU exploded. It went right up to the 1.272 area I was
watching, right at that ML lower //. It then started to roll over as expected.
This one has been following the script like it was reading right off of it. I
can't get into it here, but it is now forming yet another setup that is a
unique pattern I have discovered.
It gets difficult in here to do any more with
this, but I did show the chart in advance in Jim's Chart of the Week, and the
areas have been very useful for me. Look at individual charts of ABX, GLG, and
NEM, which all had their own patterns. These are the key individual stocks I
have been looking at to play this setup. Now try to see if you think I closed
it all on the rollover, or if you think I scaled some and am holding
some.
Let's move on to an assorted mish-mash of comments from this weeks
members' commentary.
"First, I will show one quick chart in the MR, to keep
showing how day after day I use the ML sets to guide me. I have been getting
positive feedback on my MR work almost daily, so I think it has been
well-received.
Right before the close yesterday I put this
set on my chart. The 'same old same old' here. I noticed the MR was reacting
right down that line. I would have nailed the area of the second arrow if it
wasn't the end of the regular trading session.
The point of this chart is what
happened from there. A big gap down, and the assumption that the set should be
deleted before the open even printed the gap? Look at how such an unlikely set
guided the action for quite some time. Notice the very, very consistent
'overshoot' amounts, too. The last arrow points to the break and 'retest' of
that ML upper //. Boy, this is good stuff.
Before I move on, I hope you saw
something here and asked the question out loud: 'But what about that nice ABCD
right there?' Without even getting into layout, 'context', or that Russell time
of trading day pattern, if I took that setup, look at how quickly the price
action told me the setup wasn't acting right. If I take a trade over a line
like that (because the 'offset' clearly pointed to the area) I am acutely aware
of the line itself, and when it moves, it better not react to that line, i.e.
'retest' it and react strongly off it. If it does I only have only thought in
my mind, and it comes from that old television show 'Lost in Space': "Danger,
Will Robinson!" Price action is critical."
"Now, let's get to that 60-minute
ES chart.
The ES took out that line, and is 'testing'
it from below. This has the potential to be a monumental point. Or, they could
do what they frequently do in this era of 'kill all breakout traders'. They
could be sucking in a lot of people, and then they do what I call 'the snap
back', and rush it over the line where all the new stops are. From there it may
continue the momentum, or roll over and do what it looks to be doing right now.
Or it could just do the 'test' here and continue down. This is a very,
very key spot. Is the rising wedge finished?"
"I'll start
with a follow up on that ES 60-minute chart.
Here's the same chart, with the same arrow as
the last time. The ES did 'test' the line from below, even though it didn't
quite touch it. Put a sliding // line on and anchor it to that previous low
that slightly exceeded the line, and see what that shows. As far as I'm
concerned, the line was 'tested'. I look at areas and not exact points. I go
for the 'spirit' of the layout, not the letter of it.
Now this is
all fine and good you may be saying, if I got in near the close and wanted to
ride overnight or longer. For a timeframe like this I surely would be doing
that. Perhaps I'd use the SPY or an option if I felt this was going to last a
while (remember what I said about trying to call the end to a trend on the
traded timeframe). But what about the minis? It gapped down the next morning.
What was there to work with? Plenty. Let's look at one thing I
saw.
Once I knew before the market opened that the
ES would gap down (on good economic news?) I felt the 'test' was likely
complete. I was looking for downside. The ES does an ABCD (Which variation? My
'new' one, which I will try to figure out how to make the parameters available
to the readers so you can follow these better), and that hits right at an
overlap of .300 and .447 retracements off the last two swing-highs. It triggers
beautifully, and follows through solidly. Now you see why I pointed that chart
out. Most of the time I know right where to look (in my opinion)."
I would like
to present more single series chart sequences in here, but almost all the time
the charts have numbers on them from Kane Trading on: A Totally New 5-Point
Pattern, or new median line work that I haven't shown outside of the
members' area or in mentorships. This week the pickings were slim, and I had to
take what I could. I need to put some energy into resolving this dilemma, and
as I said, I'm open to suggestions.
The next commentary will be next weekend's
edition, posted by Sunday evening, August 14, 2005.
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