Reaction Line Trading: Bearish outlook

Wednesday, 6 May 2015

The "Sniff of panic" becomes the "stench of fear"...equity markets topping out pattern...NQ, ES, YM Continued..........

(Update at bottom)
Multiple pitchfork and reaction line studies seen below. Crunch Time for these important pivots and forks. Will price make it to any of these centre lines? The fork of greatest interest remains the NQ where we have a classic Andrews up sloping PF in purple showing a CL failure and a reversing of price and direction. However never make the mistake of viewing price in the context of a single PF. Price action is a fluid dynamic and should be studied accordingly, so we look at the highest time frame below in the E mini S&P chart ( second from the bottom) where we see the waves encountering the reaction lines and median lines (from the total data history of the contract).
If you want to learn the classic trade entry setups using recognisable visual patterns of median and reaction line in combination then please contact guy@commodity-analysis.co.uk....lastly remember tops form in their own good time and we are not trying to predict tops and bottoms but recognise tradable patterns and trends and changes in price behaviour.

update

So we can now confirm that the behaviour of NQ price has changed and the failure to reach the mauve/purple centre line has resulted in a sharp move in the opposite direction ie. downwards.Price has reached the centre line in the red fork as can be seen below but as i warned before in this and previous posts never look at price in the context of a single fork. The most recent high around 4450 was the centre line of the giant black up sloping ML which has its lower ml parallel below us now at 4333. The reaction lines from this mega fork have been superb. ( see daily NQ chart at top)

However an even better option is the almost sideways PF which can be seen with the CL at 4250.(see daily NQ chart above/top) This PF already displays excellent frequency with price along its CL and as any of my former subs will tell you... The horizontal ML's offer the highest probability of a new pivot being formed. This is supported by my 2010 empirical study of ML and RL angles and subsequent effects thereof. Whatever, we have seen the first shots fired in what could be the beginning of a long overdue meaningful re-tracement.

want to know how to trade using these powerful tools? Contact guy@commodity-analysis.co.uk

Friday, 4 January 2013

GOLD, Loosing it's shine? $1200 bucks beckons for 2013!!

Jim Rickards... Gold to 16,000 bucks & a return to the gold standard? Should this man be certified (medically speaking?) and who keeps giving these people a continious platform to expound such continious and consistant nonsense? ( Answer: CNBC)

On a more serious note take a look at the charts below:
1. look at the monthly chart and topping out pattern
2. Recent price behaviour since the all time high
3. The current indicator patterns of the ribbons ( short stochastics) which are in 'waterfall' mode.
4.The use of contrary sentiment.
Please view the background to my arguement here

This fork simply expresses the relationship of the three pivots it is derived from. It's reaction lines are also an expression of that frequency. This is one of the most important forks as they are three of the most critical pivots

Look at the difference between the location of the recent high pivot. In the chart above it appears above the black LMLP and yet when we drop doen to any lower time frame it's a perfect retouch on the underside of the black lower median line parallel.