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View Full Version : Robot Observations - January 9, 2012



Billy
01-09-2012, 04:05 AM
I find it instructive that most commentators are rejoicing about what “a great bullish week” we’ve experienced to start the new year, whereas the IWM robot made its money on the short side, from Tuesday’s gap up open to Thursday’s gap down open. IWM closed Friday exactly on its 4-day VWAP which tells you that, on average, there are no net losers nor net winners among bulls and bears since the first minute of trading in 2012.

But objectively, the 20 DMF was strong for the week and large players seem to be accumulating within this consolidation. Positive divergences with the indices’ price action are increasingly showing up.

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This leaves IWM sitting right around last week’s equilibrium weekly pivot (74.68) in the middle of an obvious multi-pivot sideways trading range. Very strong support starts at yearly pivot (73.55 and last week’s low area) with relatively strong resistance starting at monthly R1 (75.90 and last week’s high area). The other obvious observation is that a reliable uptrend could only start after a decisive breakout above the 200-day moving average (76.11) and a reliable downtrend after a decisive breakdown below the 50-day moving average (73.10). A third observation – for discretionary trading only - is that support is more or less twice stronger than resistance, so, with the 20 DMF and robot settings being neutral, odds still favor going long near last week’s lows with a stop below the 50 dma and a sell target near last week’s highs, but I would not be shorting there unless the robot issues a short signal.

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The GDX Money Flow is now 3 days away from issuing a sell/short signal. After its gap up last Tuesday, GDX traded within a fairly tight range for the rest of the week. Hence, the new weekly floor levels are much more concentrated. It’s a positive because weekly levels are the only nearby floor supports. What is needed now is that these support clusters may grow in strength as GDX conquers and holds progressively above longer timeframes levels. Such an orderly progress would make the yearly pivot (55.88) a very realistic potential target.
The robot settings and edges are giving us the green light for a secondary entry today at a limit price of 53.12.
Billy

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nickola.pazderic
01-09-2012, 02:06 PM
The gap chart found in the interesting link posted by Billy:

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Very interesting. GDX 5-minute