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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
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* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

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Wednesday, April 20, 2011

"The pulse of the patient..."


     Below are five 3-chart grids of the YM, ES, NQ, TF & NKD. The only items showing are candles, volume and the pivot point of each candle (represented as a short thick horizontal white line through each candle).

     The left chart is a Daily one, with the last candle being yesterday's. The middle chart is a 5 min (market hours only) one which shows yesterday's and today's data. The chart on the right is another Daily one which includes today's candle.

     You can see from the middle chart how price traded intraday in comparison to yesterday's Daily candle on the left chart and where it found various points of support relative to the pivot point on the Daily candle...as it happens, it gapped up on the open and failed to fill the gap. As well, you can see from the middle chart how each 5 min candle traded relative to the preceding 5 min one and its 5 min pivot point.

     This is something that I'll be trying to observe and analyze more closely throughout my trading day so that I can, hopefully, better identify turning points on whatever timeframe I'm trading with much better precision. I've shown the Daily & 5 min charts for illustrative purposes...this type of analysis could be applied to any timeframes. I'd like to use my scalpel successfully on my entries like a skilled surgeon would on his/her patient so that I don't end up holding the wrong end of it!

     With the Fed propping up the markets, it makes sense to me that I add this kind of analysis into my bag of tricks because higher and higher price prints seem to defy trendlines, channels, moving averages, overbought indicators, etc.

     I can only conclude that fair value ("the pulse of the patient") is the last closing price on each candle and not somewhere else that I think it should be. If I have any further insights on any of this in the future, I'll be sure to post it here.