swetz joined. swetz howdy folks :) Tommy joined. swetz howdy Tommy, the charts are posted in the archive swetz http://www.ltg-trading.com/20090729.pdf swetz this is the link dm joined. dm left. dm joined. rhonda GE Steve!! swetz howdy Rhonda !!!!! :) swetz the charts are posted swetz there should be 3 of them rhonda ::smile quiet crowd but we are here rhonda ok thanks dm yell swetz ::ninja ::smoke swetz we can start in about 5 minutes swetz here is the link to the charts http://www.ltg-trading.com/20090729.pdf swetz okie dokie swetz I guess we can start swetz last Thursday, I mentioned the basic process I go through to analyze the market swetz we can go over most of this process by using the 3 SnP charts that you have swetz my first step and the first step that Wyckoff suggests we do swetz is to identify the trend of the timeframe we are trading, as well as the trend of the next higher timeframe swetz if we decide to trade the hourly timeframe swetz we need to determine the hourly trend swetz as well as the trend on the daily timeframe (the next higher timeframe) swetz I have attached the daily SnP cash chart swetz and the hourly SPY chart (I used the SnP ETF as a substitute for the actual SnP hourly chart because the ETF presents the intraday volume on its chart) swetz so by following the first step swetz1 joined. swetz1 left. swetz1 joined. swetz1 okay, we also need to determine the TREND of the daily SnP chart swetz1 Gary's ghost must have kicked me out :) rhonda lol dm lots of folks were getting kicked today swetz1 Gary needs to pay the bill :) swetz1 the daily chart is interesting swetz1 it goes from an uptrend framed by the uptrend channel I have drawn slick60 joined. swetz1 to a little downtrend inside a TR swetz1 and now this current buying wave has decisively penetrated the supply TL of the downtrend channel with upward EOM and increased volume swetz1 and now has penetrated the important resistance area marked by the letter C swetz1 with a wide range up bar on very high volume 5 bars ago swetz1 which has the characteristics of a potential JOC swetz1 and now the SnP is trading sideways but staying ABOVE the important resistance area over the last 4 days swetz1 and each of the last 5 daily bars have shown a close near the upper end of the range which indicates that buyers are absorbing the sellers swetz1 so this action indicates to me that the daily trend of the SnP is now UP swetz1 so from step #1, we KNOW the hourly trend is UP and the daily trend is UP at this moment swetz1 in the SnP swetz1 so now we go to step #2 swetz1 step #2 says that after we have determined the TREND, we now need to determine the strength/weakness of the trend and determine if it is getting stronger or weaker swetz1 Wyckoff suggests that comparing the strength/weakness of the alternating buying/selling waves is an excellent way to answer step #2 swetz1 Wyckoff suggests that all we need is a simple price/volume bar chart to make this comparison swetz1 and he even gives us some wonderful tools to assist us such as the 1/2 point, the SOT(shortening of thrust) concept, support/supply TLs, horizontal support/resistance lines or ice/creek areas swetz1 and some other tools like looking for spacing and vertical demand/supply areas which Wyckoff alludes to indirectly swetz1 if we look at the daily chart first swetz1 and I failed to mark it on this chart aussie_paul joined. swetz1 but we can calculate the 1/2 point of this current buying wave using the July low and the recent July high slick60 924.50 swetz1 yes sir slick, you are good :) slick60 slick too swetz1 lol swetz1 so far, we can clearly see that this little sideways movement is WAY ABOVE the 1/2 point swetz1 indicating strength swetz1 also, by comparing the today's low to the July 1st swing high slick60 not even to a .236 retrace as yet swetz left. swetz1 right Slick, this reaction has so far been very weak swetz1 we can see that bullish SPACING exists aussie_paul Hey Swetz1... what time does the talk start? aussie_paul with amos themick left. swetz1 which also indicates strength MIKEYG joined. swetz1 Amos was last night, we switched days aussie_paul ok. thanks aussie_paul sorry about that. themick joined. swetz1 you can probably get Amos's lecture in the archives section swetz1 I think it is posted swetz1 no worries, mate :) slick60 what is bullish spacing? aussie_paul left. swetz1 bullish spacing is when the low of a reaction stays ABOVE the last swing high swetz1 it is an indication of strength swetz1 also, because the action on July 23rd showed evidence of vertical demand swetz1 this current reaction has so far held this vertical demand area slick60 948.75 - 976.50 for 23rd swetz1 so we have seen 3 clues with the help of our Wyckoff tools that tells us that the daily trend that the daily trend is in a strong position to continue upwards swetz1 my goodness, my keyboard is studdering :( :) swetz1 thx slick :) swetz1 now lets see if we can judge the strength/weakness of the hourly uptrend swetz1 looking at the hourly chart slick60 962.50 is the 1/2 point of that demand bar swetz1 with the help of our Wyckoff tools swetz1 we do see some evidence of an upward SOT because each swing high marked on the chart is making less upward progress compared to the last swing high swetz1 now this is a bearish characteristic swetz1 BUT we have other tools to use as well swetz1 from this chart, we can see that the reaction has been weak so far because it has held above the 1/2 point marked on this chart swetz1 we also see evidence of bullish spacing by comparing the 7/24 low to the 7/21 high marked by the green horizontal line swetz1 and lastly, we see that the vertical demand bar marked by D/S has held swetz1 so we have 1 bearish clue but 3 bullish clues swetz1 that tells us that the hourly uptrend is in a strong position to continue swetz1 also we can see from looking at the volume on the daily and hourly charts swetz1 that selling has been weak swetz1 where is the supply? I certainly don't see any swetz1 yes, it is true that buying has not been particularly strong recently swetz1 but remember, we are in an uptrend so it is the SELLERS that have the burden of proof to turn the trend swetz1 NOT the buyers themick left. swetz1 so after applying steps #1 and #2, we can draw some logical, objective conclusions without using any EMOTIONS :) swetz1 we KNOW that the hourly and daily trends are up and are so far up in a strong manner MIKEYG left. swetz1 no internet bloggers, no tv "market experts", no brokers, no news events changes this conclusion swetz1 by just using Wyckoff's method with the help of his tools, we objectively KNOW which side of the market to trade if we are using the hourly timeframe swetz1 step #3 says and is what Wyckoff suggests swetz1 is that we should focus our buying efforts on ETFs, stocks, or whatever you choose to trade swetz1 that show RELATIvE STRENGTH swetz1 for argument sake, because I have posted the SPY chart swetz1 lets assume the SnP SPY ETF is one of the stronger ETFs swetz1 step #4 says to try to identify a TURNING POINT swetz1 that will offer a favorable risk:reward entry swetz1 in the Wyckoff course, turning points for a buy entry can be spring, a test of spring, a LPS after a SOS, a backup to creek, and a reaction swing low in a well established uptrend swetz1 these Wyckoff setups all have one thing in common swetz1 they are all TURNING POINTS swetz1 there are other entries to like a JOC swetz1 but the TURNING POINTS are the most favorable ones with the backup to creek being the best according to Wyckoff swetz1 if we are trading the hourly timeframe swetz1 we need to looking for turning points on the same hourly timeframe swetz1 and we can use the smaller 10 minute timeframe to fine tune our entry if we choose when we get a TRIGGER swetz1 Amos likes to use a thrust to TRIGGER his trades, I like to do the same thing but I require not just any thrust but a STRONG THRUST to trigger my trades swetz1 which takes us to step #5 and is the last step swetz1 this step deals with finding a TRIGGER to actually execute the trade once we can identify a turning point at an area of support swetz1 this leads us to the 10 minute chart swetz1 which is the last chart swetz1 we can see that the 10 minute chart has been in a kind of messy TR over the last 4 days swetz1 I have marked the CREEK area and the ICE area of this TR swetz1 I will share with you guys a tip that is in the Wyckoff course swetz1 that helps improve your discipline in waiting for entries in a TR environment swetz1 listen up folks :) swetz1 Wyckoff suggests that when we have a TR like we have on this 10 minute SPY chart swetz1 we should mark the top quartile, the bottom quartile, and the 1/2 point of the upper Creek and lower Ice levels of this TR swetz1 we should only take buy trades when the market is within the bottom 25% of this TR swetz1 if it is anywhere else, DO NOT take the trade because the R:R ratio is poor swetz1 we should only take short trades when the market is within the top 25% of this TR swetz1 if the market is anywhere else, DO NOT take the short trade because the R:R ratio is poor swetz1 this is a great tip because it keeps you discplined and patient :) rhonda yes so important swetz1 :) swetz1 on this 10 minute chart swetz1 the bottom 25% zone begins at just above 97.00 swetz1 or approx 970 SnP cash swetz1 today, we got 3 instances where the SPY chart traded to the bottom 25% area swetz1 SPY 10 minute chart swetz1 at about 11:00, we got a little spring swetz1 of the early morning low swetz1 on a bar that closed at the high on increased volume swetz1 which offered a trigger entry swetz1 this entry did not lead to much as buying quickly diminished and the SPY chart turned back down before it could even reach the morning high swetz1 this is cerntainly NOT the type of action we should see after a spring slick60 the increased volume of course - market just opened swetz1 we should see upward EOM and volume increased swetz1 I am talking about 11:00, 2 1/2 hours after market opened slick60 we are in dif time zones swetz1 sorry 11 am CST :) swetz1 6th bar after the bar marked on 10:00 CST on the chart, see that bar? oscar left. oscar joined. KevinA left. swetz1 so seeing the weak rally after the spring swetz1 you could either just sell and take small profits, move your stop to breakeven, or just keep your stop below the Ice area and just what happens swetz1 or even sell 1/2 to take profits and keep 1/2 at the lower Ice level or breakeven level swetz1 your money management rules will tell you what to do swetz1 and just see what happens clark115 left. swetz1 after the weak rally, we get another reaction to the bottom 25% area swetz1 just after 12:00 CST swetz1 this reaction had more selling which we can see from that volume spike at the 12:10 bar swetz1 so when I see some evidence of supply on the chart I am using to find an entry swetz1 I do not buy on that reaction with supply swetz1 I wait to see the next rally and then consider buying the next reaction if supply dries up swetz1 which is what happened at the 14:00 10 mintue bar swetz1 selling dried up and was followed by a bar that had wider spread, traded above the 14:00 bar swetz1 and volume increased swetz1 because the close was not at the high of the bar swetz1 I wait to see if there is upside follow-through and go long on THAT BAR swetz1 since there was upside follow-through because the next bar made a higher high, higher close, and higher low swetz1 you can enter on that bar and see what happens swetz1 so far, the market has continued rallying into the close swetz1 and so that trade is profitable so far swetz1 and after-market the SPY continued rallying so we may get a gap up opening tomorrow barring any news that may cause a negative reaction swetz1 IN SUMMARY swetz1 see how we first determined the trend of the daily/hourly timeframes swetz1 then determined the strength/weakness of the trends swetz1 and we determined that both trends were up and up in a strong manner swetz1 we knew that we needed to look to be on the buy side and NOT the short side swetz1 and we could use either the hourly chart or a smaller timeframe chart like the 10 minute chart to fine tune our entry swetz1 after we have identified a potential turning point swetz1 neither trade, the morning trade or the afternoon trade traded below the lower Ice level swetz1 and is possibly going to have some upside follow-through tomorrow, at least in the morning swetz1 to either take some profits as the market rallies to the Creek area swetz1 or at least move our stop to breakeven to guarantee at least a trade that will not be a loser swetz1 I left a few things out that deals with stock selection swetz1 but I was just wanting to convey the basic idea behind this simple 5 step process swetz1 using the hourly timeframe as an example in applying this process based on the Wyckoff method rich joined. swetz joined. swetz darn Gary keeps kicking me out :) swetz by the way, this lecture was based on the hourly timeframe swetz as our main timeframe swetz if our main timeframe was the daily chart swetz we would be using the weekly chart swetz along with the daily chart to determine the trend and determine the strength/weakness of the trend swetz and using the daily and possibly the hourly chart to fine tune our entry swetz there are other combinations that you can use swetz ultimately whatever timeframes work the best for you is what matters :) slick60 great stuff swetz-cat wakes me a 5am EST-will catch rest when posted. TY swetz take care slick :) slick60 left. swetz ok folks, have a good night all :) swetz good luck in your trading, but you won't need it if you have established some proven rules based on sound method of trading like Wyckoff :) swetz left.