Trade, Live and Thrive: 01/27/14

Monday, January 27, 2014

S&P 500 - Triple Screen 'Technical Analysis' - Red 2014, Bears Move - Week 5 of January 2014.

S&P 500 - End of Month Chart (EOM) - Channel analyzing Data from mid 2009, onward - as on 24 Jan'14

S&P 500 - End of Week Chart (EOW) - Channel analyzing Data from Aug'2011 onward - as on 24 Jan'14

S&P 500 - End of Day Chart (EOD) - Channel analyzing Data from Oct'2013, onward - as on 24 Jan'14

Learning from last Week: (click here for the previous post)

Patterns:

Bullish '3 Inside up' #M1, on the Long Term Charts kept November and December candles green, with a new ATH.
January 2014 candle remains red #M1.

Support & Resistance:

Bears move Index below the 5 EMA on weekly chart, even as the MVWAP and Channel Bottom fail to support the Bulls #W1.
Bulls stay above the 5 EMA on the Monthly chart #M1.

Moving Averages:

On the EOD the 5 EMA bearishly crosses below the 13 SMA mid-week #D1.
On the EOW the 5 EMA poised to - deflect Bullishly or Cross Bearishly - the 13 SMA #W1.

Indicators:

RSI 13, slips from the overbought #W2.
Month Chart Oscillator below the overbought, as it has been after the August'13 Close #M2.

Wrap:

Bulls saw red all year and now lose strength - Bears take the Short Term and close to taking the Medium Term too..

Looking forward into this Week:

Patterns:

Long Term Chart's Bullish 'Three Inside up' (Study link here, here or elsewhere) #M1 - seems spent.
Medium Term Chart shows a Bearish 'Three Inside Down' (Study link here, here or elsewhere) with the last three candles #W1.

Support & Resistance:

MVWAP 34 and EOD channel Bottom on the Short Term Chart are now resistance for the Bulls.
Medium Term MVWAP 34 #W1, is the next Support.

Moving Averages:

Bears need to stay below the 5 EMA on the EOW (1817) to stay in the game #W1.
Bulls need to keep the 5 EMA on the EOW above the 13 SMA (i.e. keep above 1793) to get some life back #W1.

Indicators:

Stochastic 34 3 4 heading to the over sold, works for the Bears #D1.
Oscillator popping into the over-bought this month, can set the Bulls free #M1.

Wrap:

Bears seek to keep their momentum with a stay below 1817 - Bulls want life back and the Index above 1793.

The Dow Jones - Ichimoku Study - Tenkan Sen Cracks - Week 5 of January 2014.

Dow 30 - End of Week Chart (EOW) - Analyzing 24 Month's Data - as on 24 Jan'14

Introduction / Primer to Ichimoku can be read at this link (click).

Learning from last Week: (click here for previous post)

Bulls get hammered after holding off above the Tenkan Sen the previous week #W2.
Senoku Span A & B converge some more and head up #W3.
Gap between the Tenkan Sen and Kijun Sen steady #W2.
Chikou Span eyes the Price line #W1.

Wrap: Bulls lose plot and crash through the Tenkan Sen #W2.

Looking Forward into this Week:

Convergence of Senoku Span A & B, remains a concern for Bulls #W3.
Gap between the Tenkan Sen and Kijun Sen steadies, widening gap would give the Bulls some relief #W2.
Critical for Bulls to stay above Kijun Sen and retake Tenkan Sen #W2.
Chikou Span deflection or cross of the Price line to be watched #W1.

Wrap: Bulls look to keep above the Kijun Sen while Bears pray the Tenkan Sen is strong resistance for the Index #W2.

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Wall to ATH - Week 5 of January 2014.

Nifty 50 - End of Month (EOM) Chart - Channel analyzing Data from 2008 onward - as on 24 Jan'14

Nifty 50 - End of Week (EOW) Chart - Channel analyzing Data from Mid 2011 onward - as on 24 Jan'14

Nifty 50 - End of Day (EOD) Chart - Channel analyzing Data from Aug'2013, onward - as on 24 Jan'14

Learning from last Week: (click here for the previous post)

Patterns:

November and December candles will set up a Long Term 'Three Outside up' if January closes above December Close #M1.
The EOW #W1 shows a Medium Term 'Three Outside Down' Candle Pattern followed by two green candles.

Support & Resistance:

Bears held near Channel mid line Support on the EOD just below the Wall (6280), while Bulls were again resisted last week around the Nov 2013 ATH (i.e. 6343) for the third time this year.
Index builds on last week's gains, staying above the 13 SMA (EOD) for most of the week but dives (Friday) to close below the 13 SMA (EOD) and Monthly 'Pivot Point' (Learn here, here or elsewhere) again #D1.

Moving Averages:

Medium Term Screen's 5 EMA was the support for Bulls last week #W1.
The short term 5 EMA close to Bullish deflection or Bearish Cross of the 13 SMA #D1.

Indicators:

STS stays above resistance line marked, a strong support for Bulls #W1.
MACD and its MA poised to meet for cross or deflection #D2.

Wrap:

Bulls retain control of all screens - Bears keep index below the Wall (6280) #W1.

Looking Forward into this Week:

Patterns:

Bullish 'Three Outside up' (Study link here, here or elsewhere) on the Long Term Chart #M1 is possible - to be watched for.
Bearish 'Three Outside down' (Study link here, here or elsewhere) on the Medium Term Chart, #W1 is active.

Support & Resistance:

13 SMA Weekly (6191), is again support for the Index #W1.
Around the Nov 2013 ATH (i.e. 6343), Bulls see strong resistance.

Moving Averages:

Golden Cross (study here, here or elsewhere) 50 & 200 SMA - can even now give the Bulls verve to attempt new ATHs.
Getting above the 13 SMA on the EOD is the immediate Bull task, while getting the 5 EMA below the 13 SMA ,is the Bear ask #D1.

Indicators:

STS keeping above its support line, works for the Bulls #W2.
Bulls need to cross and sustain above the Wall for the current series i.e. 6280 (Wall = Approx Hawala rate - study link here, here or elsewhere) to avoid a red series.

Wrap:

Bulls seek to get above the Wall and target the ATH - Bears plan to stay below the Wall and break 6191.

BSE Sensex - Ichimoku Study - Elusive ATHs - Week 5 of January 2014.

BSE 30 - End of Week Chart (EOW) - Analyzing 12 Month's Data - as on 24 Jan'14

Introduction / Primer to Ichimoku can be read at this link (click).

Learning from last Week: (click here for previous post)

Bulls hold above the Tenkan Sen and notch up another aborted ATH attempt #W2.
Senkou Span A & B - expands #W3.
Distance between Tenkan Sen and Kijun Sen also increases #W2

Wrap: Bulls stay above the Tenkan Sen but fail near the ATH #W2.

Looking Forward into this Week:

Chikou Span keeping above the Price Line critical for Bull moves #W1.
Bulls need to stay above the Tenkan Sen to remain in the game #W2.
Expansion of Tenkan Sen, Kijun Sen and the Senkou Span A & B indicative of Bull strength #W2 #W3.

Wrap: Bears look get the Index below the Tenkan Sen #W2. Bulls eye the elusive ATH.

Welcome Read

The Trading methods used here are suitable for those who (like me) are always Learners in the World Market (never presuming Mastery).

One learns with 'Technical Analysis' using Moving Averages, Channels, Time frames, Pattern & Candlestick Analysis, Fibonacci, Ichimoku Cloud, Oscillators & other Technical Indicators.

To comprehend the Dynamics of any Market, Peer Wisdom suggests, that we show plenty of Patience, keep it real Simple and adopt tons of Discipline.

We therefore use the same framework 'Patiently' every week - 'Simple' Technical Analysis Tools are repeated - The 'Discipline' of keeping a Neutral view is maintained.

So welcome to my notes - posted here for my Friends and Family.

Some Quotes..

There are times when playing the stock market that your money should be inactive - waiting on the sidelines in cash - waiting to come into play. In the stockmarket - time is not money - time is time and money is money. Often money that is just sitting can later be moved into the right situation at the right time and make a vast fortune – patience – patience. Patience is the key to success not speed.

Jesse Livermore.

That's been one of my mantras - focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains.

Steve Jobs.

Discipline is the bridge between goals and accomplishment.

Jim Rohn.

Favorite Quote

"Why do we trade?

To be sure, trading allows us independence, the opportunity to work for ourselves. Trading also offers the prospects of a lifestyle in which evenings and weekends need not be consumed by work. Some of us crave the competitive aspect of trading, doing fresh battle each day. Others approach trading as a puzzle to be solved, deriving a sense of intellectual achievement. Finally, there is income. A successful trader can make seven figures in a year—and many of the traders I work with are living proof of that.

So why do they trade? Once you have the money, all of trading’s lifestyle advantages could easily be yours. Needs for competition and intellectual stimulation could be met in so many other ways. Why do traders remain traders long after they’ve won the game?

The great professions are those that serve as personal playing fields. They are the arenas we choose to express and develop ourselves. In mastering a discipline, we cultivate self-mastery. In writing a poem or placing a large trade, we capture—in a single act—our vision of how we see the world at that moment.

The great occupations are great precisely because they are such meaningful playing fields. Long after we’ve earned fame and fortune, the calling remains to be more than we are, to return to the arena and do battle with our limitations. The profound urge to extend the human grasp is common to all the great callings. To run faster, to capture more beauty, to predict ever better: in no small measure, our work is our pursuit of the godlike, however fleeting.

Maybe it is our different images of the godlike that animate our career choices.In work we find something divine within ourselves. Whether as scientists, monks, or traders, we strive for those moments when we are just a little closer to perfection, a little nearer to immortality. That is why we trade"

.... Brett N. Steenbarger

Inspiration

The Parable of Talents...

14 For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods. 15 And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey. 16 Then he that had received the five talents went and traded with the same, and made them other five talents. 17 And likewise he that had received two, he also gained other two. 18 But he that had received one went and digged in the earth, and hid his lord's money. 19 After a long time the lord of those servants cometh, and reckoneth with them. 20 And so he that had received five talents came and brought other five talents, saying, Lord, thou deliveredst unto me five talents: behold, I have gained beside them five talents more. 21 His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord. 22 He also that had received two talents came and said, Lord, thou deliveredst unto me two talents: behold, I have gained two other talents beside them. 23 His lord said unto him, Well done, good and faithful servant; thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord. 24 Then he which had received the one talent came and said, Lord, I knew thee that thou art an hard man, reaping where thou hast not sown, and gathering where thou hast not strawed: 25 And I was afraid, and went and hid thy talent in the earth: lo, there thou hast that is thine. 26 His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed: 27 Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury. 28 Take therefore the talent from him, and give it unto him which hath ten talents. 29 For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath. 30 And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth.

The Holy Bible: Matthew - Chapter 25.