Is It Really The Start of Something New? July 20, 2011

[Billy]

Forum Clusters 110720.xlsx

The thriller movie is progressing into the bear trap scenario which unfortunately shook the IWM robot out of its long position on Monday’s lows. It’s part of the risk-management game. After missing the best rally day of 2011, the robot is once again looking to enter a new long position at $ 83.06, which was also the exact most frequent limit entry price recently. What’s encouraging is that the 20 DMF refused to turn short after still being one hair away from a sell signal around noon yesterday, and the first serious buy programs in a week finally triggered around 1:30 pm as detected by the cumulative $TICK.



As far as today’s setup is concerned, IWM is simply back in the trading range that held from Monday till Thursday of last week, above the strongest of all support clusters. The fact that it escaped a nasty selloff under the support cluster and bounced back fast and strong yesterday can suggest the resuming of the uptrend as bears and short sellers have been painfully shaken out and disgusted for a while. Just like last week, the easy target is YR1 (85.68).



QQQ is the leading ETF and is already trading above its own YR1 (59.02) pre-market. The easy floor progression is over as it is entering an extremely strong resistance cluster with strength of 27. The ability of QQQ to progress by small leaps and bounces above SR1 and QR1 (59.72) without a serious pullback over the next few hours and days will tell us a lot about the true potential sustainability of the rally for the overall market.




GDX is looking poised to test its first support cluster before a new assault at the SR1 and QR1 (62.12) levels. Ideally, it should allow new entries at 58.92 and quickly regain its 5-day moving average (59.74 and rising) for an easy continuation of the rally.
Billy

[ilonaross]

Billy,

I can't begin to tell you how much I appreciate these daily comments, charts and xcel file.

Tnx

Ilona.

[manucastle]

Billy,

Thanks for your excellent work.

Sorry if I have missed it before but where do I find your Cumalative Tick graph on Stockcharts ?

Trev

Attachment 9402

The thriller movie is progressing into the bear trap scenario which unfortunately shook the IWM robot out of its long position on Monday’s lows. It’s part of the risk-management game. After missing the best rally day of 2011, the robot is once again looking to enter a new long position at $ 83.06, which was also the exact most frequent limit entry price recently. What’s encouraging is that the 20 DMF refused to turn short after still being one hair away from a sell signal around noon yesterday, and the first serious buy programs in a week finally triggered around 1:30 pm as detected by the cumulative $TICK.

Attachment 9400

As far as today’s setup is concerned, IWM is simply back in the trading range that held from Monday till Thursday of last week, above the strongest of all support clusters. The fact that it escaped a nasty selloff under the support cluster and bounced back fast and strong yesterday can suggest the resuming of the uptrend as bears and short sellers have been painfully shaken out and disgusted for a while. Just like last week, the easy target is YR1 (85.68).

Attachment 9401

QQQ is the leading ETF and is already trading above its own YR1 (59.02) pre-market. The easy floor progression is over as it is entering an extremely strong resistance cluster with strength of 27. The ability of QQQ to progress by small leaps and bounces above SR1 and QR1 (59.72) without a serious pullback over the next few hours and days will tell us a lot about the true potential sustainability of the rally for the overall market.

Attachment 9403


GDX is looking poised to test its first support cluster before a new assault at the SR1 and QR1 (62.12) levels. Ideally, it should allow new entries at 58.92 and quickly regain its 5-day moving average (59.74 and rising) for an easy continuation of the rally.
Billy

Attachment 9399

[Pierre Brodeur]

Billy,

Thanks for your excellent work.

Sorry if I have missed it before but where do I find your Cumalative Tick graph on Stockcharts ?

Trev

You have to create your own

[manucastle]

You have to create your own

Do you need a subscription to Stockcharts ?

Trev

[ilonaross]

free stockcharts wouldn't give me the option. then i tried on tos. after a few minutes of that, i knew that if i didn't stop either i or the computer was going to go flying out the window. if someone would post 1) how much it costs on stockcharts 2) an easy process for altering the y axis measurements 3) how to get the mountains etc.... and this for any platform that doesn't cost an arm and a leg... i would be most grateful.

[Pierre Brodeur]

-1- We always hear from technical analyst that previous support now becomes resistance. Why does cluster analysis ignore this "concept"?
-2- Does Ichimoku supplement S/R analysis in any way then?
-3- Finally, IWM is trading just below the Senkou Span A ( the bottom of the 60 minutes bearish cloud) which should act as resistance. For months now, you have no longer presented Ichimoku short term analysis. Is this by design because it no longer part of your investment process? I for one use them for risk and E(r) analysis and would be quite interested from time to time to get your view on this as far as IWM is concerned.

Pierre Brodeur

[Billy]

-1- We always hear from technical analyst that previous support now becomes resistance. Why does cluster analysis ignore this "concept"?
-2- Does Ichimoku supplement S/R analysis in any way then?
-3- Finally, IWM is trading just below the Senkou Span A ( the bottom of the 60 minutes bearish cloud) which should act as resistance. For months now, you have no longer presented Ichimoku short term analysis. Is this by design because it no longer part of your investment process? I for one use them for risk and E(r) analysis and would be quite interested from time to time to get your view on this as far as IWM is concerned.

Pierre Brodeur

Bonjour Pierre,

-1- Cluster and pivot analysis is not different from other technical analysis. Previous support becomes resistance and inversely. Only interpretation is easier with multi-pivots, since for each timeframe you can make the distinction between equilibrium S/R at pivot levels and intermediate consolidations in a trend at the various S123 and R123’s.

-2- Ichimoku analysis is better for discretionary trading and for making real-time decisions intraday. It can complement S/R analysis but is hard to quantify. We know the optimal timeframe is the 60 minute with Ichimoku, while the multi-pivots weighings start on the daily timeframe, 6.5 times longer.

-3- I still do my ichimoku daily routine analysis and know very well what you are talking about with the Senkou Span A. But remember that this forum is for discussing the robot signals and Ichimoku is no part of them, neither as Fibonacci or MIDAS for example.

Knowing where the Ichimoku clouds and spans are is certainly impacting my commentary. I will try to make some Ichimoku updates in the VIT main forum when I find the time. It must encompass all timeframes and compare all main indices to be useful. While it takes me only 5 minutes in my daily routine, posting clearly and concisely about it to a mostly novice public would probably require me 2 hours of work. Also such posts usually spur tons of questions and I must sacrifice more of my rare and precious leisure time.
Again, Ichimoku is mostly helpful for discretionary trading decisions and therefore cumbersome for robot traders.
Billy

[Pierre Brodeur]

. Also such posts usually spur tons of questions and I must sacrifice more of my rare and precious leisure time.

... and I thought that with the robots, you NOW had plenty more of leisure time [lol]

Thanks for the answer

A bientot

Pierre Brodeur

[EB]

For anyone who's interested, these are the settings for the out of the can "Custom 4 Lines" indicator in TradeStation that will replicate Billy's settings.