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 September 4, 2005 Commentary (weekend
edition)-
Well, I'll cover a little business and then
we'll get to some charts. I got the new updated books page up, reflecting the
two new books Kane Trading on: Four
'New' ABCD Pattern Variations and Kane Trading on: Median Line and
Fibonacci Synergy. The first one has been shipping since the early part
of last week, and I am working on wrapping up the second one. If you are a
previous full set buyer and want to purchase the two new books please e-mail me for the link.
That median
line book is going to be something. It is probably going to run over 250 pages,
maybe over 275, and will likely have over 200 charts. It's not the size of the
book that has me so impressed, it the content. As I work on this I just get
more and more taken aback by what I've discovered, and what I'm putting in
there. There is nothing, and I mean nothing like this out there. I am
showing things I created and discovered, and how they work with my existing
pattern and Fibonacci methodology, and it just amazes me.
When I use
the methodology to trade I am so close to it I can't really 'see' it. When I'm
forced to step back, create educational charts, and lay it out step-by-step, I
can see just how incredible it really is. That's just my opinion, of course,
and I'm biased towards my own work, but I have been told by several of the best
median line traders I know that what I do with median lines is just remarkable.
And they have seen maybe 10%-20% of what's in this new book. Hey, I can
only offer up my work, and those that want to follow up and make a serious
study of it can do so if they want.
I'll move on to some charts now. Some of the
commentary I will lift from the members' section, and some I
wrote just for today.
"Let's move on to the ES on a 60-minute
chart.
Here's that trendline I've been showing on
the ES lately. Notice the last two touches that produced fantastic
opportunities for me, as we discussed before. This line has really proven
itself to me, and I was using it in various ways besides the obvious use as
seen on this chart.
Before I show this, let me say that there are quite a
few spectacular 'adjusted' ML sets that I have on my 60-minute chart to go with
all that lower timeframe ML work. That's what I meant when I said in the
previous commentary that what was on the chart wasn't all that there was to put
on there. The lines I will show now will duplicate some of that work. If you've
really dug into this timeframe and done the line work, you will already have
lines like what I have here. The 'punch line' on the last chart, though, you
may not have seen.
I'll add two lines onto the chart.
I added two parallel lines onto the chart,
from two very close anchor points. Notice how the lower lines were used. They
even gave two spots where the ES bounced, the second one leading to that first
PTA spot I showed.
Notice how it tracked those lines recently? That's a
breakdown ready happen if I ever saw one. And what's that arrow there, sitting
out in space? That's where the ES was trading shortly after the overnight
session opened, way down at 1194. You can clearly see how most of that was
recovered by the open, and all that the regular trading session follower would
see was a slight gap under the line and then right up. I was watching something
else, though, based on my lines.
Let me add on a very obvious line I
had on my chart from way, way back. As I frequently say, lines are free, so I
use plenty of them.
Look at how obvious that line is, and where
the arrow hit. What looks 'out in space' is actually right at a very key line,
in my opinion. I saw this last night, and the pattern similar to the London
bombing scenario, and I felt I had my edge. If you start to work this layout
you will see there are other things there, too (look for the very tight .486,
.xxx (deleted for the free commentary version, sorry), and .886 convergence
right there, as one of many things).
Sometimes there are very obvious things that
get overlooked, and they can be very useful at times. I try to always look for
the obvious as well as the more 'hidden' areas from my methodology. This was a
real gem of an opportunity last night, as far as I am concerned. It was worth
some lost sleep. And before I get too overly bullish on this big reversal,
recall what happened last time, and the positioning of the ES on this chart.
Look to the higher timeframes, too, for 'context', and do some work. As always,
the charts will tell me where the probabilities I want to trade are."
Let's take a
quick look at two charts that I showed in advance in the members' section. I
will show them as they stand right now.
I have been showing GLG for quite a while in
the members' area, as it is one of the stocks I play off the XAU, which has
been just bouncing from setup to setup for me. The second arrow shows a PTA
from a while back that I discussed in advance. It is also an example in both of
the new books. As I discussed GLG I pointed out the area by the last
arrow.
Keep in mind that this chart is part of the median line framework,
and as always I am doing my full pattern, Fibonacci, 'context' and so on work
in conjunction with this. I cover this extensively in the new book Kane Trading on: Median Line and
Fibonacci Synergy. I show a lot of charts that only show a few aspects,
or even one aspect, in order for it to be clear to the readers.
As you can
see GLG just exploded off the area. I had several great opportunities with this
one, and some great entry triggers. I'm also watching NEM and ABX, which are
behaving just as well for me. I'm in the position I like to be with this one
now, where my stop is moved and my management plan is well under way.
Let's look at
another one I showed in advance in the Euro.
I have been discussing this one for some
time, too, as I follow the currencies quite closely. I love to trade FX, so
keeping close tabs on the currencies is something I always do automatically. It
also helps me a lot with my money flow/intermarket analysis, so I can have some
ideas for treasuries, gold, energy, and so on.
Notice the recent price action
similarity with GLG here? I was discussing the area by the arrow in the
members' section, as well as the line contact before the arrow (in advance, of
course). This chart is like a piece of artwork to me. I was also working this
with the Fibs and such, but I was focusing on line work with the discussion in
the last two examples.
As you can see this one also exploded right off the
area. If you do an offset line (how I do those in my own unique way is in the
new book) you can see the Euro is approaching the area where I want to start
watching it more closely.
Now, before I close, I'm sure there a few of the readers
who just can't get past their worry that they are going to get 'taken' if they
buy my book set (because they have been 'taken' in the past), and see this
outstanding work, but still just figure I probably don't have anything to offer
them, as far as education. They'll read along every week, but they just can't
'pull the trigger'. I suspect that, in order to justify their position, they
are saying 'Sure, he shows these great setups, and they really rocket off the
areas, but I'll bet he shows a hundred setups a week in the members area, and
then shows us the two or three that play out.'
I'd love to address that. I have to
be very, very (and I mean very) careful I don't say anything that even
remotely sounds like a claim. As it is, I have a purely educational service,
not a picking service. Not that there is anything wrong with picking services,
it's just that I don't run one. I show things in advance solely so that the
readers can follow along, and study and practice the things I am showing, and
learn from that practice. But let's look at this past week.
I showed
seven layouts that reacted to the areas I was watching, two that I said I
didn't think the area would be reacted to and would likely get blown out so I'm
looking to possibly fade it (trade against the setup) and the areas did get
taken out, one that didn't give an entry trigger, and one that is sitting on
the area, and I said I suspect it is going to take the area out. These are
not numbers that you can hold me to or that can be considered 'claims'
of any sort, as I just counted them up quick, and I could be off a
little.
Some of them we have been watching for a while, like that GLG and
the Euro, but I counted them. This is just a guideline so it is clear that I am
not just making a hundred 'calls' and a few do what I think they will. Also,
not every one rockets off my area for a big winner. Some react like GLG here,
and that's it, or even less, just to the next line or area I am watching. How
tradable they are depends on the 'Trading Plan', the various management aspects
applied, and so on.
I am only saying a lot of the time there are reactions
at the working areas I show, and many times I have a feel for when I want to
fade those areas, which I discuss. I don't want anyone trading off my work, so
I don't even have to say that I make no claims whatsoever that any of these
moves could make anyone any money, since I know people are in there to learn
the highest level of what I do, and not to try to trade anything I
show.
The next commentary will be next weekend's edition, posted by
Sunday evening, September 11, 2005.
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