iCharts Discussions

SwingTrader · Posted: Thu Dec 13, 2012 9:52 pm Post subject:

Long term breadth oscillator update

Both long & medium term breadth are diverging with price, it could get interesting on the downside if this continues.

SwingTrader · Posted: Thu Dec 13, 2012 10:11 pm Post subject:

Short term breadth update

Both red & blue lines move down indicating a possibility of a continued decline for now. We could get a clue to it tomm. If both red and blue lines get oversold (below -80%) it could give us an excellent opportunity to add to longs (on a reversal) as long as the medium & long term hold above 0 on the long term chart posted in the previous post.

I am still holding bull call spreads. I had initially bought calls and then hedged those almost at the recent top. This has given me a good price for the bull spread, so there is a sort of built-in hedge. But a continuing decline will hurt my position (even though the short call will lose value fast which is a positive for my position, the long call will lose value fast too below a certain price). I will hedge during the day tomm if I sense a possibility of further decline. Unless we see a powerful recovery tomm, this decline can continue for the next few days.

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

At the rate they are falling, may be a few days more to go below -80%

SwingTrader · Posted: Sun Dec 16, 2012 8:03 pm Post subject:

Next one/two days are critical for this pullback, to decide if it will continue down or reverse.

SwingTrader · Posted: Tue Dec 18, 2012 9:50 pm Post subject:

Short term breadth cycle update

The very short term breadth very much positive since the last couple of days but short term (blue line) still heading down. If the blue line does not turn back up then in the next couple of days we may head down for a continuation of the aborted pullback.

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

ST, but blue line has always reversed after crossing below 80% except in Nov?

SwingTrader · Posted: Wed Dec 19, 2012 9:02 am Post subject:

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

oops, yes -80%. OK, that's what I thought that today and tmrw may be crucial.

SwingTrader · Posted: Wed Dec 19, 2012 10:30 pm Post subject:

All types of breadth now up Very Happy

. Attached below are both short-term breadth chart & long-term one.

I am still holding the 5800-6000 CE bull call spread which is up nicely now as the short call has lost more than half its value and long call is up since I bought it (as I had initiated the short call few days after I bought the long call). Market isn't giving me a reason to close the position yet. Taking it day by day.

Everything looking bullish....how long will it last?

SwingTrader · Posted: Sat Dec 22, 2012 9:02 am Post subject:

We may after all see a bearish move now. As I had said in my previous post "Everything looking bullish", this is what happens when everything is bullish - we get a bearish move. Most of my indicators have triggered sells all of a sudden yesterday...well...not all of a sudden as they have been rolling down for a while now (see breadth chart below). Negating these sells would take a monster move up or a slow but complete reversal of trend into the expiry. Let us see where this goes. There is still good enough support until 5820 on NF, so next week will be interesting.

I have closed off my bullish options positions and have put on few bearish positions (bought JAN ITM puts). I was anyway looking for a way out as I don't like to stay in long current month options in the last week before expiry (unless I am holding OTM credit spreads).

SwingTrader · Posted: Wed Jan 16, 2013 10:01 pm Post subject:

I have been very much tied up so could not post updates. I am still holding the JAN 6000 puts I bought on Dec 22nd but I did convert those to a bull put spread on Jan 1st. Still holding the bull put spread which I will convert back to a put once I get a sell signal, else will just close off the position in the next few days.

I have decided to wind down my breadth charts live testing. This is due to two reasons. One, I don't have the time anymore. Two, I do not feel there is any edge in using breadth the way I am using (for short-term). I can see that the breadth oscillator I have built is leading and does provide key market info a bit before stuff is happening (most of the time, if not always). But having the info is one thing and using it successfully is totally another thing. I am unable to take options positions using the breadth oscillator alone as my trading has always geared around price action and after I started testing the breadth signals I slowly started taking signals only after price confirmation (which is actually fine). Eventually when I went back and analysed I realised that almost all the trades that I took were based purely on price action and not on breadth. I do not see the point then. Pure price action continues to work better for me in my current trades and I will stick to it. As for breadth, I will just keep an eye on it as it is useful to keep things in perspective especially for position trading & investing.

Attaching breadth chart below updated today.

amitkbaid1008 · Yellow Belt Joined: 04 Mar 2009 Posts: 540

ST Sir

Please share how to use Price Action for short term trading

SwingTrader · Posted: Fri Jan 18, 2013 8:49 am Post subject:

amitkbaid1008 · Yellow Belt Joined: 04 Mar 2009 Posts: 540

SwingTrader · Posted: Fri Jan 18, 2013 9:30 am Post subject:

Amit,

I use 60 mins chart for swing trading. It is all about finding sup/res and trading either breakouts (I use ITM options in this case) or first pullbacks after breakouts (in this case I might use futures as SL can be close). Exact method of finding sup/res is not that important, one usually gets better at it as one starts doing this exercise regularly. One important thing is - I monitor the daily chart and look for OB/OS areas as one gets great entries around it (on 60 mins chart). This is all there is to it, the key thing is - one has to do this consistently. One gets better at this with practice.