Trade, Live and Thrive: 10/13/14

Monday, October 13, 2014

S&P 500 - Triple Screen 'Technical Analysis' - Channel Support - Week 3 of October 2014.

S&P 500 - End of Month Chart (EOM) - Channel analyzing Data from mid 2009, onward - as on 10 Oct'14

S&P 500 - End of Week Chart (EOW) - Channel analyzing Data from Aug'2011 onward - as on 10 Oct'14

S&P 500 - End of Day Chart (EOD) - Channel analyzing Data from Jan'14, onward - as on 10 Oct'14

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

Patterns:

Long Term Bullish Engulfing failed to become a three outside up, see the last 4 Month candles #M1.
Index touch down on the Weekly Channel Bottom is exact #W1.

Support & Resistance:

Bulls defend the Week channel bottom on the EOW #W1 and 200 SMA on the EOD #D1.
Bears have their best week in a long time as MVWAP 34 is breached #W1.

Moving Averages:

5 EMA and 13 SMA, cross Bearishly on the EOW #W1.

Indicators:

RSI 13 down to the 40s #W2.

Wrap:

Bulls take support exactly at our Medium Term Channel bottom #W1.
Bears use the failed Bullish Engulfing to good advantage to touch the 200 SMA after a long time #W1.

Looking forward into this Week:

Patterns:

Stick Sandwich Pattern (Study Links here, here or elsewhere) active in the Medium Term screen #W1.
Bullish Engulfing on long term charts, failed to evolve into a 3 outside up (Study Links here, here or elsewhere) #M1.
Medium Term Channel Provides exact support for the Bulls #W1.

Support & Resistance:

EOD channel Bottom #D1 and the weekly 13 SMA (1970) are resistances.
The EOW channel bottom #W1 and the 200 SMA #D1 are the Supports.

Moving Averages:

The Index is above the 13 SMA on the EOM (1883) #M1.

Indicators:

STS in the over sold, works for the Bears #D2.

Wrap:

Bulls look to defend the 200 SMA on the EOD, taking support at the Weekly Channel Bottom #W1.
Bears, after denying the Bulls a '3 outside up' last month #M1, and closing below 1959 last week, now aim for 1883.

The Dow Jones - Ichimoku Study - Kijun Sen Folds - Week 3 of October 2014.

Dow 30 - End of Week Chart (EOW) - Analyzing 24 Month's Data - as on 10 Oct'14

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

Learning from the earlier Study: (click here for the post)

Bears force break-down from Peak 2 - Bulls manage to hold previous lows #W2.
Gap between Tenkan Sen - Kijun Sen same #W2.
Gap between Senoku Span A-B reduces #W3.

Wrap: Index falls and closes below Kijun Sen, after 50 odd weeks #W2.

Looking Forward into this Week:

Keeping below the Tenkan Sen - Bears aim for the Kumo #W2.
Bearish Cross or Bullish Deflection of Tenkan Sen & Kijun Sen, would continue to show direction going forward #W2.
Chikou Span bouncing off the Price line, is the next Bull hope #W1.

Wrap: Bears seek reach the Kumo #W2 - Bulls hope the Chikou Span would bounce off the Price line #W1.

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Channel Tussle - Week 3 of October 2014.

Nifty 50 - End of Month (EOM) Chart - Channel analyzing Data from 2008 onward - as on 10 Oct'14

Nifty 50 - End of Week (EOW) Chart - Channel analyzing Data from Mid 2011 onward - as on 10 Oct'14

Nifty 50 - End of Day (EOD) Chart - Channel analyzing Data from Feb'2014, onward - as on 10 Oct'14

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

Patterns:

Evening Doji Star happens if index stays below 7964 this month - Bulls fail to sustain above this number all last week #M1.
'Inside Bar' on the weekly chart is followed by a High Wave candle #W1.
Tussle at the current Day Channel bottom sees Bulls finding respite at earlier Day Channel bottom (blue) all last week #D1,

Support & Resistance:

Bears crack the 13 SMA on the EOW after getting below 7912, the October Wall #W1.
Bulls find support at S1 of the Monthly Pivot #M1,

Moving Averages:

The critical 5 EMA and 13 SMA on the EOD remain Bearishly crossed #D1.

Indicators:

MACD dives below the zero line - Histogram ticks up #D2.

Wrap:

Index below the October Wall (7912) after Bears light the hope of an Evening Doji Star happening #M1. Bulls back up against S1 of the monthly pivot #M1.

Looking Forward into this Week:

Patterns:

Possibility of a Long Term Evening Doji Star (Study Links here, here or elsewhere) happening is brighter and now depends on this month's close (below 7964) #M1.
Inside Day' Pattern on the Weekly Chart (Study Links here, here or elsewhere) is active as is the next candle the 'High Wave' (Study Links here, here or elsewhere) #W1.
Tussle at the current and earlier Day Channel bottoms should resolve early in the week to allow the channels to re-form #D1,

Support & Resistance:

Index support that the Bulls want to hold, is the S1 on the Monthly Pivot and 7760 #W1.
Bears look to defend the 5 EMA on the weekly charts (7943) and 7964 #W1.

Moving Averages:

Golden Cross (study here, here or elsewhere) of the 50 & 200 SMA is on - the MA's are currently back to converging #D1.
The critical 5 EMA and 13 SMA on the EOW will cross Bearishly below 7760 #W1.

Indicators:

STS staying in the overbought, works for the Bulls #W2.

Wrap :

Staying above the S1 of the Month Pivot #M1, and closing above 7964 are high on the Bull agenda for the Month.
Bears have all of October to work for an Evening Doji Star #M1, immediate task is to keep the Index below the October Wall (7912).

BSE Sensex - Ichimoku Study - Tenkan Sen Folds - Week 3 of October 2014.

BSE 30 - End of Week Chart (EOW) - Analyzing 18 Month's Data - as on 10 Oct'14

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

Learning from the Earlier Study: (click here for the post)

Bulls fail to keep it above the Tenkan Sen #W2.
Senkou Span A & B - gap lower #W3.
Tenkan Sen and Kijun Sen gap also reduces #W2

Wrap: Index hangs around the previous major High, but slips below the Tenkan Sen #W2.

Looking Forward into this Week:

A Bearish, Chikou Span cross with Price line, at current altitude, will need time #W1.
Bulls need to get back above the Tenkan Sen #W2.
Senkou Span 'A & B' converging, remains good for Bears #W3.

Wrap: Bears seek to keep the index below the Tenkan Sen and get to the Kijun Sen, Bull focus is to get above previous High and attempt a new ATH (All Time High) #W2.

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.