Amos joined. Amos Hi Ory Hi Amos Gary_Fullett joined. Ory Hi Gary roger hey amos Dan ge amos Amos I hope you all survive these markets Ory so far Dan wild indeed Dan How do you explain today? Amos FIrst chart tries to show some intricacies of spread charts. The monthly of the wheat soybean chart has been shown last time and I said that this horse can race all the way to resistance in full galloping Dick left. Amos Dan-- today is not different than any other day. If you think it is-- just you waite, Mr Higgins, just you watie Amos waite Amos So I am sitting at my desk Last friday morning-- the wheat in globex is almost Limit up and you know that shorts are scared chitless, if there are any left Amos The news of the fires in Russia are ablaze. the Fear factor is very high benoit joined. Amos I look at the spread which was around 6-6.50 a few hours ago when I spoke about it here last week and I see it has raced to an area that held for the past 15 years 3 out of 4 times- so I write to myself--- IMPORTANT HISTORICAL RESISTANCE benoit left. Amos Well, you know what happened-- Wheat started at limit up and ended limit down that friday mark joined. Amos the same chart saturday morning looks like the next chart and I cannot help but giggling to myself-- so I print the chart and I write LOL-- a few hours later. Amos This chart-- that fooled me badly for a few monthsw-- has become quite accurate in one fell swoop and OBEYED its boundaries quite well-- this is rather frustrating Amos It is even worse wyatt joined. Amos If you go to the next chart-- it is Sickening--the hourly chart of the spread shows how that MONTHLY RESISTANCE LINE was OBEYED TO THE T Song joined. Amos The ONLY CONCLUSTION you can have from that coincidence is that SOMEONE IS WATCHING THESE LINES VERY METICULOUSLY Amos a chart that can toy with your senses and you "understanding" for a long time-- can become extremely accurate a few days later Amos Not nice Amos This is part and parcel of our business Amos It has an important quandry or message--you choose Jon joined. Amos Normally-- spread charts need careful monitoring of different time frames-- becase a level on a higher time frame-- can be very misleading-- if your timing is NOT RIGHT Amos at the same time-- if the TIMING IS RIGHT-- those levels on higher time frames-- can be so significant and cause such strong moves-- that it is amazaing mikeyg joined. Amos Many moons ago I mentioned a previous experiecne of mine with the Live Cattle- HOG spread-- it happened around 1999 or so-- don't remember exactly-- but I called the top in the spread pretty accurately and lost a few thousand dollars because the difference between the WEEKLY spread and the QUARTERY spread-- was big enough to make the market go against me until the expiration of those contracts. I stung me for a long while-- and I avoided tradeing spreads after that experience Amos the main reason is that the spread ONLY RECORDS ONE POINT-- ONE PRICE for each period in that time frame-- and if the market is very volatile-- you REALLY DO NOT KNOW WHERE IS THE REALY HIGH AND LOW larryg joined. Amos here in the case of the wheat soya spread-- you can see that the actual hourly spread came EXACTLY TO THAT RESISTANCE POINT -- that you can see ONLY ON THE MONTHLY CHART Amos YET the market TURNED ON THAT SPOT-- LIKE A ROCK!!! Amos THAT MEANS THAT SOME SMART CM was WATCHING THIS POINT like a hawk!!! Amos again this is hind sight and is worthless for trading if you did not stand at at that point and sold the spread Randy similar to the way he has been watching 1130 area in ES? Amos Truthfullhy-- you would have had to have balls of STEEL to sell wheat last friday./ BUt some very smart traders did Amos Randy- I cannot compare spread action with regular bar chart-- but philosophically , you may be right Amos So what caused wheat to crash at that point? was it really this spread chart? was it the simple fact that at that point-- the LAST OF THE WEAK shorts bailed out (market hit limit up sevral times that Friday Globex session. Was there a count to that point? Amos I have no answer. I just find it extremely interesting to see how accurate that resistance point on a long term spread chart--- that VERY FEW ARE LOOKING AT!!!!--- worked Amos what is the morale of this? Amos simple-- chart readig is going to be tougher and tougher in years to come. Amos All the classical patterns that we have learned from Edwards and Magee, from Murphy, from anyone and anything-- are going to be used TO KILL TRADERS Amos I have said this in the recent past several times and I will repeat it--- CLASSICAL CHART PATTERNS ARE GOING TO BE MURDERED IN THE NEAR FUTURE!!! Everyone knows them, everyone puts them on their computer screen and they will be used AGAINST TRADERS Amos What do you do? Amos You adjust. YOu do not give up, you bite you lips and you TAKE THIS INTO ACCOUNT--- you wait for the second and third FAKE MOVES!!! and You look at other DERIVATIVES OF PRICES (like the spread in this case, or Options prices, ---this is a heavey subject-- and I hope to cover more of it in the future) Jon patterns will never go away becauces they chart fear and greed and one thing you can count on is that fear and greed will never change Amos but you keep looking for SYNNERGY and then the only solution is the KOVNER way-- you try, you fail, you try agian until it works Jon plus failed chart patterns are some of the best setups Jon human emotions never change Amos Jon-- patterns will not go away-- but CLASSICAL PATTERNS will be TOYED WITH VICIOUISLY because too many stupid traders use them and the market knows their weakness Amos this is a moot point-- we will see it as it unfolds-- no use arguing about it--the market will prove Jon all you have to do is react to the price action thats all we can do. Jon these failed patterns provide the best trades because you have traders trapped on the wrong side Amos Next char is something I mentioned last time and looked at it--it is a chunk of 10 year block of the dow-- just to see where we are-- Amos so you can see a yearly chart encased in two rectangles of 10 years--1990-1999 and 2000-2009 Amos You can see that the last decade of the 20th century was the biggest so far and CLOSED ON THE HIGH-- so at least theoretically , or nominally it HAD to make a higher high. It did Amos but after that higher high it had its biggest reaction in history which took out the last yearly low-- which by itself tells us that we have finished a MULTI YEAR BULL MARKET FOR A VERY LONG TIME and the CLOSE of that decade was a small reversal Amos that is it 2009 closed a little lower than 1999. Amos At the same time-- that close was VERY MUCH IN THE MIDDLE-- which implies a range for a rather prolonged time Amos Not an easy picture (not that this "decade" chart has any validity-- but it is an interesting intellectual exercise Amos It is quite interestig to note that after 2 such VERY WIDE "DECADE BARS" the opening year of the next decade is, so far VERY DOCILE--note , we are mid August and so far we have gone NOWHERE in the last 8 months. Amos I am trying to think what is the meaning ofr that-- but my initial hunch is that if the rest of 2010 will remain inside that narrow range-- the odds that next year till be at least a little wider -- that is 2011 will be more volatile than 2010-- is high Amos I have a hunch that this is an importnt view of the market-- and thus-- I share it with you-- I am sure we will come back to it later on and glean some more inforamtion from it Amos I doubt there are too many people in the world looking at such time frame-- so it is either very smart or totally useless-- time will tell Amos The next few charts are agiain an exercise in futility-- so have patience Amos This chart is repetition of last time-- I said that the area of 8450 looks like an imprtant trading range-- and this alayws has a chance of "marking" the half way point-- so extending the 50% projection of the fibo tool gives you around 8050 which is marked on the chart Amos there is NO ENDING ACTION ON THE CHART-- I think you will all AGREE with that observation Amos next chart is yestrday globes and you can see that that level was punctured, and there is a possibility of a SPRING! Amos WHat is a spring? by definition-- a spring (forget the numbers at this moment) is a face move below support-- aiming at catching early bulls, frightening future bulls from joining the move and basically clearing the road up with as little following from the general public as possible Amos spring looks at the new low as if it is a BOGUS MOVE (not confirmation of the down trend which must make LOWER LOWS and lower highs to maintain itself) Amos normally springs are NOT A PART OF A DOWN MOVE-- that is very wrong to think that way-- you will go to the poor house for sure ! Amos Springs usually are already part of a market that has stabilized, at least and the BUYERS ARE ONLY SHAKING OFF weak longs! Amos In this DOLLAR CHART-- so far the BULLS HAVE BEEN DEVASTATED!! they are NOT IN CONTROL Amos Are they? Amos Well that depends on your deinitio of the trend-- and this is the point of tonight's lecture Amos I have been saying now for many days that the large trend in the dollar is up (because of the semi annual chart) Amos yet the makret has dropped from 88.5 to 80 like a ROCK-- this is over 10% "correction" Amos How do I know that I am not totally wrong about the trend? Amos That "potential spring" ( I must put it now in quotes-- because after what I have just said-- this is NOT THE DEFINITION OF A SPRING-- even if the GRAPHICAL PRESENTATION justifies the name!) Amos got to the 55 4 hour ma which so far has maintained the DOWNTREND PERFECTLY!!! Amos need to wait Amos next chart Amos next chart we make a higher high for the first time since the 8300 level hawk joined. Amos and it starts looking as if the 80 level has held!!! Amos The next chart-- is the CURX Amos look carefully at the quarterly chart of the dollar== this may be ONE OF THE CLASSIEST CHART FORMATION you will see in a long time-- The SEMI gave a buy signal. the quarterly had a HIGH VOLUME WIDE BAR WITH CLOSE NEAR THE HIGH-- which is another BULL SIGNAL Amos and now we MUST MAINTAIN HIGHER LOW IN ORDER TO JUSTIFY a BULL move--- Amos the LOW OF THE LAST QUARTER IS 80031 Amos the low yesterday was 80052 or something like that Amos YOU CANNOT GET MUCH CLOSER TO THIS Amos IMAGINE THAT THE DOLLAR WILL NOW RACE past 89- 90 and challenge the 95 level (which was mentioned here not so long ago) Amos WHAT WILL YOU SAY??? Amos I will tell you what you will ALL SAY Amos IT WAS OVCIOUS!!! Amos We "TESTED" the previous quartely bar-- we KEPT THE LOW OF THAT BAR-- and by that VERIFIES THE BULL TREND Amos Not much different than the CRAHS OF 1987 where people commited suicded and MURDERED THEIR BROKERS, WARREN BUFFET lost 85% of his fund but did NOT sell one share-- and the Market HELD ITS YEARLY LOW by very few DOLLARS Amos So easy in HIND SIGHT-- BUT MURDEROUS ON LINE Amos This is why trading is so hard and frustrating mikeyg Amos another key was something I mentioned two weeks ago about the open interest declining at a gradual rate since the high....guess what day open interest finally bottomed in the dx and started to turn up?? Two days before the spring on aug 3 !!! ah-tex joined. mikeyg enough longs had been shaken and only mostly strong hands were left so now conditions are right for a violent rally back imho Amos mikeyg-- cannot aruge with that-- but open interest is A) Not part of wyckoff, B) I dont know how to use it properly other at significant expiration of large OI--- so I cannot make any intelligent comment-- but you may be very right mikeyg Why let anyone back on the "long side" of the dollar after todays big up move???make it tough on em to get long!! mikeyg ty amos Amos What is my point here? Amos it is tht when the market wants to look at the higher time frame-- it has the "right" to toy with prices with VERY LARGE SWINGS== that look very frightening and MISLEADING when viewd say, on the daily bar chart Lady_K left. Amos How do you maintain you confidence in the previous trend-- when the correction goes so fast 10% against you? Amos AND WITH NO ENDING ACTION???? Amos this issue of no ending action-- harks back to what I said above-- the fact that many CLASSICAL PATTERNS that we are so used to and feel comfortable with-- are going to DISAPPEAR FOR A WHILE FROM THE MARKET Amos I will come back to this 3 charts from now-- right now lets go with what I printed Amos Next chart is SIlver Jon how do we get these charts? Amos Look carefully at this chart-- it is a mouthful Song is es and dx against each other now? Amos Jon, a few bucks under the table to Kelly and you can get whatever you want Jon funny Randy posted on the sight under previous classes Randy or archives Jon thanks Jon left. Amos the 20 level is OBVIOUSLY major resistance Amos So January this year was a big reversal followed by a decline to 15 which ended at the high Jon joined. Amos then 3 month rally which took out ALL THE STOPS ABOVE JAN high--- thus killing ALL THE WEAK SHORTS and May ended as a REVERSAL but CLOSE IN THE MIDDLE MONTH Amos After the Month of MAY we have started to SHRING SIGNIFICANTLY Amos the Silver market basically died Amos 9 times out of 10 when a market "DIES" on any right hand side-- it is an IMPORTANT HINGE Amos in classicaly Wyckoff analysis this should lead to the LPSY!!! which according to Wyckoff is the "BEST" place to go short-- that is if the chart behaves according to classical Wyckoff Amos if not-- EXPECT ANTOHER WASHOUT Amos At any rate-- you can see that July was on the NARROWEST MONTHS in recent history--you have to go back to 2007 and before that to 2005 to see a smaller month-- such anomally is significant Amos So I circled this juncture and called it HINGE GALLORE!!! Amos all of a sudden I do not remember what CITM stands for-- it should be vry obvious-- but it is also 5 am here---ahhh,,,, CITM is CLOSE IN THE MIDDLE Amos so expect some significant move coming soon Amos Next chart was printed Tuesday morning-- and we see double top with a potential THRUST that may make that WEEKLY DOUBLE TOP-- a major UPTHRUST-- I hope everyone knows the difference between these two terms Amos So far today-- it seems that it was a correct assumption Amos AGAIN- this is a good example of the difference between trading and talking Amos Trader must take all good signals and try them-- DOES NOT MATTER IF YOU GET STOPPED OUT-- if you act upon a WEEKLY THRUST-- you will be right more than 70% of the TIME-- GOOD BUSINESS--no matter how many times you lose and how much you get frustrated Amos KOVNER, KOVNER, KOVNER---CALVIN COOLIDGE!!! Amos PERSISTENCE IS OMINPOTENT! Amos Provided, of course you SELECT AND SIFT NON STOP Amos ok back to the folly of classical chart patterns Amos Next chart is the euro Amos 4 hour bar chart-- last week Amos YOu see the left ellipse--- it shows a strong bar closing at the high followed by a reversan and then 6 bars ( 24 hours) narrow sideways-- ending with LOWER LOW on the 2 hour bar chart----weakness! Amos THen 13 bars between 131 and 132--- and in the middle it has a significant OKR followed by a Thrust--- good SELL SIGNAL Amos what happens? market EXPLODES TO 133 closed near the high-- and all the bears-- are THROWN OUT!!!!! Amos we are at 128 as of now-- so with HINDSIGHT it is OBVIOUS that this RUSH TO 133 was part of DISTRIBUTION!!!! Amos You tell me-- how this chart in front of you-- the two ellipses that seem pretty much similar in content-- how this is an ENDING ACTION? HOW THIS IS DISTRIBUTION??? Amos Any one who will tell me that they could have read the rush to 133 as a HYPODERMIC (which it WAS IN HINDSIGH!)-- is either a genius or a liar! mark left. Amos THIS IS NOT AN ENDING ACTION. THERE IS NOTHING that resembles CLASSICAL DISTRIBUTION in that pattern Amos my only conclustion is what I said earlier=== YOU WILL SEE MORE AND MORE SUCH ACTIONS that are CONTRARY TO CLASSICAL TA --- they will be manufactured by the CM who will act differentlhy than what we learned in grade school Amos why? Amos because too many newbies use these classical tools-- and the market will spend enough energy and resources to KILL THEM--- and after a while, or a long while-- things will go back to normal Amos This is what I wrote on the chart: MARKET IS KILLING CLASSICAL TA Jon Maybe there was resistance in a larger time frame to the left Amos if you do not agree with me--- I would love to hear your explanation-- how the pattern in front of you-- two ellipses-- both look materially the same-- storng bar closing on the high==follwed by some garbage action-- the first ended with an UPTHRUST the second ended with a MARK DOWn Jon what is to the left in larger time frame? Amos Jon-- OF COURSE-- if YOU BLIEVED ALL THE WAY IN THE QUARTELY DOLLAR holding last bar lows-- it would have been OBVIOUS Amos but this chart of the EURO looks BULLISH AND NOT BEARISH!!! Amos next chart shows the same thing on the DIALY DOLLAR Amos I don't care what you think-- but the TRUTH IS that both ellipses encapsulate two corners of the dollar index Amos THERE WAS NO ENDING ACTION ON THE UPSIDE Jon this chart does but you also need to look at what the larger time frame is doing...perhaps a counter trend move with in a larger time frame. I don't trade currencies so i don't know wha the chart looks like Amos and there is NO ENDING ACTION at eh 80 level Amos why? Amos because Amos What to do about it? Amos BE AWARE OF THIS--- I have said many times in the past that one of the major rolls of the market is simply to PUNISH STUPID, INANE, INEXPERINCED TRADERS Jon was just a shakeout? Amos this is part of the market Jon once it broke the neckline you bias was short Amos when the market knows that enough people are following one system or another-- it will go after those peope with vengeance!! Jon all you have to do is folwing the chart...charts never lie Jon people do but not charts Amos I mentrioned Prechter declaring major decline-- I do not know at what point his followers will give up-- but if the market senses, knows that enough folowers built a large short position following Prechter-- it may just spend enough energy killing them Amos Jon-- are trying to immitate Ory tongiht? Jon who is ory? Amos What is the solution? Ory thanks Amos Amos how many people can trade the QURTERLY CHART? Amos Ory--don't be offended-- this is my wry sense of humor-- you must have that in order to survive in this business Ory just a trder jon Jon dpends on what your tolerance for pain is Jon ok Ory oh,,, i,m not at all offendedAmos,,,,,just excited you though of me Amos Again-- is it even wise to trade the quarterly chart? Is it wise to buck a 10% reaction in the market because you stick with you long term view? Ory and so we live and trade together Amos Amos These are significant qustions. If you ask Warren Buffet-- he will say that without this you will never be a BILLIONAIRE-- otoh-- the is only ONE BUFFET! Amos So this is a very hard question Amos What is the answer? Amos At times-- trading is VERY DIFFICULT-- and at times very easy Amos you have to accept this Jon just trade the time frame you are comfortable with Amos Same with car racing-- you make good money but you may blow a tire and die Ory very sympatico roger would rather golf the night life sounds better Amos The point is that you can be very right on one time frame-- and very wrong on another-- and it is very difficult to cope with both Ory humor the best medicine Amos I will ask you folks to answer me honstly-- does any of you see an ending signal in the dollar above 88? did you know to go short? Jon you just need to understand the trend of the larger time frame. then drill down to a smaller time frame to find a setup to trade with the trend Amos and where we are today-- how many of you are long the dollar here? Amos answer please with some Wyckoff justification-- I am waiting Jon just trade equities. Amos Jon-- a chart is a chart is a chart-- no matter what the substnace is roger all I see at 88 is sot and following bars are lower high lower low Ory major UT and a major springer Jon yes i agree Amos Ory you did NOT know it was a major UT until the dollar broke below 8600 and then your stop loss would have been over 2 handles-- not many can take this!--be realistic! Ory lets see the answer Ory sorry Amos Amos the truth is that it was very difficult to short the dollar and it is very difficult to long the dollar now. Randy agree Amos and the market moves fast enough from the turning point to make JOINING THE MOVE PROHIBITIVE because the STOP LOSS beocmes too large-- you MAY SEE THE MOVE-- but you CANNOT AFFORD IT!!! Amos this is life Amos Next chart is the monthly bp===again example of futility of TA Ory this is quite true Amos Jon yeah, but if it is a breakout that is going to work it should not come back into the top of the base which is now support (creek) Amos there was no ending action at the bottom, we broke the monthly DOWNTRENDLINE-- and then today we started to crash-- why? what indication? what ending action??? NADA Amos Jon-- this is an intelligent statment yet-- one of Wyckoff's best models is JUMP AND BACK Jon plus the volume looked very weak on the breakout Amos this is my point-- that you may NOT see too many J^B in the near future-- because too many people are expecting it Amos Next chart is the point and figure of the British pound-- again very hard chart to count-- not reliable Amos Next chart is the dow daily Amos Lately I harped very much on the position of the close of successive bars-- to give indication of the forces of suppoy and demand Amos Last few days-- this has turned out to be FALSE INDICATOR TOO-- the action in the daily dow since first of AUgust looks positive-- NOT! Jon now this pattern is a failed pattern Amos This is a very frustragin apparition-- but this is part of the market-- and you have to accept that there will be periods like that Amos I worte on the chart WHAT IS THIS??? Jon consolidation/base Amos I cannot read this chart- so-- IDK=NMT Amos sorry but that is the truth Jon bull flag Amos much like NASA waiting for favorable weather before launching a rocket or letting a space shuttle come back to earth-- need to wait for good weather if you do not want to risk life Amos Next chart of the dow is possible 14 week cycle Amos we have exceeded the write rectangle by one bar-- but if per chance that time cycle is for real-- then what we have seen today-- is part of an important decline-- somethign to watch Amos also on that chart you can see clearly the effect of MAY 6--- that huge "shakeout" has pretty much defined market action over the past 13 weeks---and it is time that we LEAVE THAT RANGE!! Amos Next chart is copper= It is TRYING THE SOUL OF MEN with the THRUST AFTER OKR model-- the first thrust failed-- chances are very good that NEXT THRUST WILL WORK Jon KR? themick left. Randy key reversal Jon OKR? Randy outside KR Jon thanks Amos AGAIN AND AGAIN--- please keep in mind the KOVNER WISDOM-- if you analyze the market correctly-- the fact that you failed in your first attempt is ONLY a sign that your TIMING WAS OFF-- if you give up on your system-- you are NOT a good trader- successful traders-- try again because they know that their methodology is good-- not FLAWLESS- but good-- and as long as you have AN EDGE-- you can beat the market (again the card counter principle) Amos so if we have to wait another month in copper (actuallhy the economy) and we get a thrust in September-- odds are high that that thrust will result in a big move!!! Jon good point Amos Last chart is the same copper on the quarterly chart Jon going to have to get through the resistance to the left Jon will need to base for awhile here Amos you can see 8 quarters cycle that may hav actually given a very significant signal by the OKR of last quarter and what we are seeing is the LPSY of that market-- we shall see Amos So I write on the chart: NEXT QUARTERLY THRUST will be very important Amos ALAS, this may take a few months more Jon yes Amos so it is possible that by the end of 2010 not only OBAMA will have complete WHITE HAIR-- but so will quite a few traders Amos White hair is part of the price of trading Amos HAOOK Amos Open for questions Jon white hair and less cahs Jon cash Amos Michelle has the cash Jon yeah Ory very thourogh Amos as always Jon what books you recomend on the wyckoff principles or resources? Dan they are on gary site books Jon i know TA but the terminolgy is different Amos Jon-- only worthwhle book is the Wyckoff course, 900 dollars Gary_Fullett right the smi course Randy glossary of most terms on site also Gary_Fullett jon contact me Jon i saw Jon ok Gary_Fullett or write kelly at knorris@ltg-trading.com Gary_Fullett and see will help Jon ok, thanks larryg amos, on DJI weekly, if we get weekly thrust this week, does the prior weekly thrust 8 weeks ago mean anything in particular in your thinking that price will leave this TR to the downside? pat1 joined. Amos larry--the yearly chart of the dow tells me that we have finished a 26-28 years bull market and we will be in a corrective phase for many years to come ( up to 80) Amos ok folks---don't get frustrated-- just keep doing you good homework-- and the horizons will clear up--the longer you are in the eye of the storm-- the colser you are to escape-- if you survive Jon thanks roger good lecture tonight amos thx Amos gn Ory Thanks Amos Gary_Fullett tty amos Jon left. Gary_Fullett great job Gary_Fullett any final q? larryg ty amos Amos left. warren thank you Amos once again larryg left. Gary_Fullett night all ty warren left. Gary_Fullett setz tommorw Gary_Fullett swetz Gary_Fullett left.