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US and Euro stocks mounting one more rally before crashing?

  • #681
  • Feb 26, 2019 10:16am Feb 26, 2019 10:16am
Quoting ijltf
{quote} I literally have no idea what is going on today, we had a huge move down and now we’ve had a massive move up. This resistance level I’m expecting to hold, so let’s see what happens next.
It's not so difficult to understand, although the up move by Dax today was frustrating because it came all the way back twice, taking me out at BE both times, but a bull market, which this is, can always be expected to rally of of its big supporting moving averages, today being the 30m 200ema, to the pip on my charts. One never knows exactly how high the rally is going to go, but one can usually set one's sights on the previous high as a marker. These trades with the trend are always the highest probability trades. It's trying to catch them turning back down towards the supporting moving averages that most people get burnt, ie, exactly where Dax is at the moment.
  • #682
  • Feb 26, 2019 10:37am Feb 26, 2019 10:37am
Was long.

Short again Dow, Shooting star off the Pivot. 5m

Its also near yesterday's Daily shooting Star close, so I'm leaving this puppy
  • #683
  • Feb 26, 2019 10:44am Feb 26, 2019 10:44am
Quoting PariCovek
Was long. Short again Dow, Shooting star off the Pivot. 5m Its also near yesterday's Daily shooting Star close, so I'm leaving this puppy
Closed most out for 35.
Leaving SL at BE.
  • #684
  • Feb 26, 2019 10:48am Feb 26, 2019 10:48am
Quoting medici
{quote} Indeed, under some conditions, but not generally, and not for asset prices. And your original quote stated that it was true 90% of the time for asset prices, which I still disagree with. Unless you do show the proof you claimed to exist. Also, I should clarify that I am referring to the returns of the price series being auto-correlated, of course, rather than the values themselves. See https://quant.stackexchange.com/ques...urns-or-prices
Well, if we consider stationary AR(1) process using Wold theorem we can express it as infinite sum of MA shocks. Crucial assumption here is that covariance cov(e(t), e(t-s))=0 , i.e. shocks are WN. Then using central limit theorem we can conclude that as number of shocks goes to infinity variable y(t) has normal distribution, same is for variable y(t-1). Second crucial assumption, the process started infinitely long time ago. Hence increments y(t) - y(t-1) follow normal distribution too, because difference or sum of norm. distributed variables is also normally distributed variable.

Markov property is essential here because it ensures there is no "autocorrelation" between shocks. If there was (then its not true AR process) then it would also violate the assumption that this process has Markov property.

Regarding normality of returns it can be shown that returns of an asset price are assumed to be normally distributed, by applying Itô's lemma to the process G=lnS, where S = adt + σdz - generalized Wiener process describing asset price, a - drift rate, σ - variance rate. Hence if dG = lnS(t) - lnS(t-1) ~ N, then increments are normally distributed.
  • #685
  • Edited 12:19pm Feb 26, 2019 12:07pm | Edited 12:19pm
Quoting dispersion
{quote} Well, if we consider stationary AR(1) process using Wold theorem we can express it as infinite sum of MA shocks. Crucial assumption here is that covariance cov(e(t), e(t-s))=0 , i.e. shocks are WN. Then using central limit theorem we can conclude that as number of shocks goes to infinity variable y(t) has normal distribution, same is for variable y(t-1). Second crucial assumption, the process started infinitely long time ago. Hence increments y(t) - y(t-1) follow normal distribution too, because difference or sum of norm. distributed variables...
The Markov property, and independent increments - as you suggest - are presuppositions in the dogmatic version of the efficient market hypothesis.

Those assumptions are not supported by market data. This can be seen by calculating the Durbin-Watson statistic. Lagged increments are correlated.

What do you mean by " it can be shown that returns of an asset price are assumed"? Sounds illogical to me. And Ito's lemma has got nothing to do with it. The distribution and correlation of market returns are empirical matters, and they are settled statistically.

Which model to use is a practical question. For most trading purposes it's irrelevant.
  • #686
  • Feb 26, 2019 1:49pm Feb 26, 2019 1:49pm
The Dow has been finding support on the 90m 100sma as you can see clearly from this chart. My next significant level to watch for a potential short opportunity is around 250 give or take.
Attached Image (click to enlarge)
Click to Enlarge Name: Wall Street (DFB).png Size: 52 KB
  • #687
  • Feb 26, 2019 1:58pm Feb 26, 2019 1:58pm
Condolences from the States

Inserted Video
If you are good at something, never do it for free--Joker
  • #688
  • Feb 26, 2019 2:11pm Feb 26, 2019 2:11pm
Quoting jmn5611
Condolences from the States https://www.youtube.com/watch?v=5ixRWvrkUHo
Thank you my friend!
  • #689
  • Feb 26, 2019 2:20pm Feb 26, 2019 2:20pm
Again apologies, as I know this is not a forum for placing one's favourite music videos, but please allow me just this one.

'New Grass' is my favourite Mark Hollis composition. For me it captures the beauty, hope, despair, and ultimately, the futility of life.

If anyone else would like to post their favourite Mark Hollis composition, on this day, please feel free.

Inserted Video
  • #690
  • Feb 27, 2019 12:49am Feb 27, 2019 12:49am
GM - looks like the "crash" that the thread title is talking about might just happen today...a decent sell-off to below SMA200 on the hourly, at least.
  • #691
  • Feb 27, 2019 12:53am Feb 27, 2019 12:53am
Quoting medici
GM - looks like the "crash" that the thread title is talking about might just happen today...a decent sell-off to below SMA200 on the hourly, at least.
There was a good 400pts drop on Hang Seng in their last hour trading just then.
I see support on Dax at 513-7, 500-03, 463-472. I think the latter is very likely.
Perhaps yesterday's move was just to throw off the shorts.
We have bearish MACD divergence on 1H.
  • #692
  • Feb 27, 2019 1:04am Feb 27, 2019 1:04am
Quoting PariCovek
{quote} There was a good 400pts drop on Hang Seng in their last hour trading just then. I see support on Dax at 513-7, 500-03, 463-472. I think the latter is very likely. Perhaps yesterday's move was just to throw off the shorts. We have bearish MACD divergence on 1H.
Yes, what happens during the Asian session is often a clue.

The week started just like the week that initiated the December sell-off - with new highs on a Monday morning, continuing into the European session.

So, on Monday I thought 'this is the week when the trend will turn around."
  • #693
  • Feb 27, 2019 1:58am Feb 27, 2019 1:58am
Seems like that was a typical death throe move on Dax yesterday afternoon. We're now set for lower levels I would say, so S1 @ 11,447 should be reached today at least, but needs to come back a bit first. Just depends how fast London wants to push this further down. We'll find out in a minute or two.
  • #694
  • Feb 27, 2019 2:15am Feb 27, 2019 2:15am
All the support that was there yesterday on Dax is still there today beginning with the 30m 200ema today at 462, or a bit higher my H1 100sma @ 472.
  • #695
  • Feb 27, 2019 2:28am Feb 27, 2019 2:28am
Dow is coming down, of that I am certain, just depends how messy it will be before it does, as today could be one more day when it frustrates us and kicks back up again, but everything, on all my time frames up to Daily, shows me that this monster is rolling over. Whether this is the resumption of the bear market remains to be seen, but i have 25,000 being revisited very soon.
  • #696
  • Feb 27, 2019 3:56am Feb 27, 2019 3:56am
Quoting cat
All the support that was there yesterday on Dax is still there today beginning with the 30m 200ema today at 462, or a bit higher my H1 100sma @ 472.
I see there's also support of a 20ema on H4, and the 7ema on D1.

It's still in this zone of selling which is where it sold from previously so I would expect to see a move down, it's just when is the question, it tested the 550 area a few times yesterday on H1 and didn't like it at all.
  • #697
  • Feb 27, 2019 4:11am Feb 27, 2019 4:11am
2 Dow charts, H2 & H6.

H2 shows the price now down on its 100sma, from which it rallied on the 15th of this month. Will it do so again?

H6 shows me that it won't, not to the same extent, perhaps back up as in the green broken arrow, but for me, not to new highs as on the 15th.

This is because I now have a topping MA above the price whereas before it was below ( not shown ), but also because of the price movement prior to the 15th compared with today. On the 15th if you look at the H6 chart, it was pretty much straight down then up again, whereas now, the price has been creeping along just above its 20sma, breaking below once to rally again but a shallow rally whilst all the time the MACD has been falling. Now the 20sma has been broken again. There may be one more rally off of this H2 100sma area today, but if there is, I would expect it not to make new highs, and when it turns, that for me will take the price back down to 25,000 or lower. It may just crash straight down without pulling back at all. Fed chairman Powell testifies later today, and that should move the markets one way or another.

As always, just my take on things as I see them.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: Wall Street H6.png Size: 54 KB
  • #698
  • Feb 27, 2019 4:57am Feb 27, 2019 4:57am
Quoting cat
2 Dow charts, H2 & H6. H2 shows the price now down on its 100sma, from which it rallied on the 15th of this month. Will it do so again? H6 shows me that it won't, not to the same extent, perhaps back up as in the green broken arrow, but for me, not to new highs as on the 15th. This is because I now have a topping MA above the price whereas before it was below ( not shown ), but also because of the price movement prior to the 15th compared with today. On the 15th if you look at the H6 chart, it was pretty much straight down then up again, whereas...

I admire the way you derive tradable information from so many timeframes I would easily develop biases from having so many perspectives.


So I'm sticking to the hourly and the daily. Both look bearish to me. It's just that the hourly is a good bit oversold, down at the 50 period Bollinger band. So it needs to come up a bit - perhaps towards today's open at 26009 (YM price).

I finished the morning with a long from 25950 up to Camarilla L2. Now break until the Americans add some energy to this.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Screenshot 2019-02-27 at 10.54.30.png Size: 161 KB
Click to Enlarge Name: Screenshot 2019-02-27 at 10.55.12.png Size: 148 KB
  • #699
  • Feb 27, 2019 5:19am Feb 27, 2019 5:19am
Quoting medici
{quote} I admire the way you derive tradable information from so many timeframes I would easily develop biases from having so many perspectives. {image} {image}
It's like only looking down at the ground in front of you when you walk, you'll be able to walk in a straight line near enough and you'll avoid turning your ankle over in a pothole, but it's only when you look around you that you see where you are in relation to everything else.
  • #700
  • Feb 27, 2019 5:23am Feb 27, 2019 5:23am
Quoting cat
{quote} It's like only looking down at the ground in front of you when you walk, you'll be able to walk in a straight line near enough, but it's only when you look around you that you see where you are in relation to everything else.
Thank you. Not sure I understand...For example, yesterday you posted a 90 minute chart with SMA100. Why add this timeframe? Why not put SMA150 on the hourly, or SMA300 on the 30 minute chart?

I hope you don't mind the question
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