smilingsynic trading observations etc.

[Lawrence]

smilingsynic’s trading observations, techniques, etc.

[Lawrence]

(promised SS to repost it for him here)

What I wanted to share last Friday is simple: I have used an 81 period moving average for a long time (I have called it the DMA–daily moving average). I still use it, because it is evident to me that others with more money and influence in the markets do as well. It therefore works.

Based on the DMA, I have come up with longer-term DMAs. A 2 day dma is a 162 (81 X2) sma. A 3DMA. is a 243 and such.

I have gone back months and have found that someone else looks at these levels as well. They serve as support in up markets and as resistance in down markets. If the dma does not serve as support, and the 2DMA is below, price will often test that level next. And if that fails, the 3DMA, and so on.

I am a firm believer in keeping things simple, and I have much less on my charts than I used to. But I now have these, and am glad that I do.

Check it our for yourselves.

[geosing]

Interesting. I have been using a factor of 3 (i.e. 3X 81 for 5′). Or 3X whatever the DMA is for the time frame used. I am forward testing behavior around these levels. No smarts or patience to do backtesting. Thanks for the idea.

[RoloRolo]

ty so much for sharing your wisdom and insights into these mkts LC and SS

[geosing]

SmilingSynic’s Best of Fattail tip of the day:

If the market closes below the daily pivot and the opening range low, expect renewed weakness on the next day.

If the market closes above the daily pivot and the opening range high, expect renewed strength on the next day.

[vertigo3]

RE SmilingSynic’s Best of Fattails tip…

I have a question RE the opening range LOW, what’s it based on?
– 1st 5min bar
– first 30minute range?

and is the Pivot the PP value calculated as of yesterday’s close or is it the pivot generated by the current day’s action?

[Lawrence]

I have the newer file of the summary on hand. Need to organize the material a bitas it is in Word format so I need to cut ans paste them part by part here.

[geosing]

If you need volunteers, I am available.

[smilingsynic]

vertigo3
RE SmilingSynic’s Best of Fattails tip…

I have a question RE the opening range LOW, what’s it based on?

– 1st 5min bar

– first 30minute range?

and is the Pivot the PP value calculated as of yesterday’s close or is it the pivot generated by the current day’s action?

Thursday’s pivot was based on Wednesday’s price action. Therefore, the pivot is based on yesterday’s close.

The OR low in the observation on fattail was based on 30 MINUTE OR/.

I personally now use a 5 minute.

[smilingsynic]

Fattail tip #2: if the market does not retrace at least 50% on a trend day by the end of lunch, around 1:30 EST, odds are that the market will price a new extreme after 3 PM, if not before.

[Lawrence]

Reprint from SS’s Journal

1. On an ADU, the target level is often hit after 3 pm

2. If the day’s range expansion is completed early, and price action creates a spike and ledge formation, odds are for a end of day sell off after 2 pm.

3. On a morning gap, look for a gap fill, but if the day’s high reaches a level that represent twice the previous range from the close,
the gap will probably not be filled. Gaps + significant range expansion ==> open gap at end of day.

4. If the market has made a strong intermediate move up (down) over several days, a close below (above) the daily pivot suggests
an end of the swing, for the time being.

5. A huge gap that represents the previous day’s high (low) plus (minus) the previous day’s range may prove to be an exhaustion gap.

[Lawrence]

Reprint from SS’s Journal

6. A small morning range (from 9:30 to around 11) suggests an immient intraday breakout (me–a large opening range suggests intraday congestion)

7. If the VWAP is taken about by 2 or more points, the intraday trend has likely changed. Until then, the VWAP should be seen as support in an uptrend, or as resistance in a downtrend.

8. If the market closes below the daily pivot and the opening range low, expect renewed weakness on the next day.
If the market closes above the daily pivot and the opening range high, expect renewed strength on the next day.

9. If the market closes above (below) the opening range high, expect the next day to open slightly higher (lower) and then test the pivot.
If the pivot serves as support (resistance), then a retest of the previous day’s high (low) is likely.

10. If the market does not retrace 50% on a trend day by the end of lunch, around 1:30, EST, odds are that the market will print a new low after 3 PM, if not before.

[Lawrence]

Reprint from SS’s Journal

11. ES rarely make its daily low/high around 11 AM. A low/high made around that time should be considered a swing low/high that will likely be taken out by the close.

12. When the market closes just above the previous day’s low, that means a lot. Such signature close may portend a rally the very next trading day from S1 or previous day low.

13. On the first day after an intraday failure at the pivot point, S1 is the minimal target.

14. When the market is strongly trending above R2 or S2, and there is no pullback after the early move, the day’s high or low will be made after 3 PM.

[Lawrence]

Reprint from SS’s Journal

15. “Once the initial MM process is over, then another kind of bots kick in doing their jobs. They are the VWAP bots. They are a special kind of MM bots,
except that they do not simply react to order flow. The goal of these bots is to net positive 95% of the time every single trading day. Actually they are gunning for 99% of the time.
Many of these bots watch the key price level, moving averages, momentum indicators like human. But instead of using these stuff the way they are described in books, etc. available in public, they do that in reverse. It is an over simplification, but they stay true to this principle – price discovery means small losses on the way and then hitting hard and press for more once it is to their advantage. This very idea was actually taught to all human MM, locals, etc. in the old days. The implication here is that w. spring and w. thrust are now golden. They work way better and show up way more often intraday. Why? the bots did the “discovery” job for us to see if they can create more liquidity (i.e. run the stops), and if they fail to do so, they will press onto the other direction as hard as they can. Faster and merciless relative to the locals in the S&P pit.”

[Lawrence]

This one looks familiar =)

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