Replies to post #308 on Advanced Trading Methods

[gloe]

thanks bobjack, I am really just thinking out loud.

Very tricky those overbought/oversold signals. One fairly good way of telling how the day will go is if the indices open above or below the pivot point and if they stay above or below it. So if you get a - 200 HFE and you hold a long over night, the next day you need to see the index get above and stay above the pivot. Otherwise, you will probably see the CCI on the 30 min chart go up to the zero line and then turn back down.

This happened for example on Monday, 4/10, after 2 pm, 3 of the 5 indices had 30 min HFEs (IWM QQQQ and MDY did, SPY and DIA did not). A long there would have worked fine - all the indices went up into the close and gapped up on Tuesday 4/11, but they couldn't hold on to the pivot. The CCI went up to the zero line and turned back down. All the indices then fell and broke Monday's low. So if you had taken the long, you could have still gotten out with a profit or a break even. No harm. You could even reshort on a break of the pivot or the previous day's low. (Opposite for longs, of course.)

Here's 30 min charts of the IWM and QQQQ showing what happened Monday 4/10 and Tuesday 4/11. The first 30 min candle on 4/11 shows the gap up and immediate turn down. IWM opened 4/11 right near the pivot and fell from there. QQQQ opened a bit above the pivot, right into the 34 ema, and fell from there, breaking the pivot. The CCI turned back near the zero line and went back down.

(These are Woodie pivots, BTW.)