Supply/Demand Zones, Accumulation/Distribution, & Price Patterns

     All three of these topics come down to supply and demand which is the basis of technical analysis.  Everyone has their own way of viewing these things and that includes myself.  In this post I’ll talk about how I view them, the reasoning behind it, what causes it, and just the overall understanding behind them along with other nuances.  I have talked a lot about market structure in previous education pieces and this one will dive deeper into that part of technical analysis.  Understand this is coming from the view point of myself and what I have learned by studying markets to derive these concepts, so some of it will likely vary a bit from what you may have already learned and other parts not so much.  I’ll try to keep this one shorter than the others, but don't hold me to it because I want to be thorough here.  If it ends up being too long for you for one sitting, I will separate it into three sections as per the title of the post if that helps.

12-29-13 Weekly Review & Watch-list

First off, hope everyone had a great Christmas or other celebrations.  I have been taking it easy on the trading, mainly just managing trades I already entered and taking few new positions.  Any stocks covered here is just for new entry purposes, I won't go over the positions I am already managing or any unreasonably late entries.

Equity Swing & Position Trading Setup

I previously wrote a short piece on my intraday futures trading setup, and now that I have shifted my focus back to equities and options I figured it was only appropriate to write this short post on my setup for equities.

Bitcoin Looking At $1500 & $2000

Let's welcome it in with a big round of applause, my first bitcoin post!  Wonderful..  Well I figured it was a good time to make one since it is pulling back and keeping relatively decent market structure.  Aside from talking about fundamentals and whether or not bitcoins have any intrinsic value, the technical targets I am seeing right now are right around $1500 and $2000 (technically $1900 but hey, this is bitcoin.. if it gets there why not $2000?).  With the way bitcoin moves that honestly wouldn't surprise me to see that happen especially with this Fibonacci retracement (50% & 61.8%) that caught the price action quite nicely (which is also what is giving me the targets).  As long as it can hold above that fib zone the probabilities of hitting those targets are fairly high.  I don't trade it and don't want to trade it, but I do follow it and that is what I'm seeing right now.

12-22-13 Weekly Review & Watch-list

First off, the transition from futures to options is really going great for me.  Before the Fed announcement I was pretty reluctant to put on positions but after the reaction to the announcement I had a list of names ready to go and I did very well with them.  If you were following me you saw that in real time.  So here's how the new format is going to go..  To start I'm going to talk about the overall markets (SPY, QQQ, and IWM) with internals, then give a list of names with short descriptions about why I'm interested in them.  After that I'll post the news calendar and that'll be it.  So let's get into it...

Green Candles For Bernanke

Wow, quite the day today was..  The only reason I am writing this post is because I think this is such a great learning opportunity about being able to flip your views on a dime.  This morning things were looking grim with the SPY working on a rounding top type pattern for a short term correction and the fed meeting just sent off a huge, massive squeeze and turned that rounding top looking pattern into a continuation looking pattern.

Take a look at the charts below:

My Priorities Are Changing

You probably noticed that most of my focus today was on stocks and options rather than day trading futures.  I have been wrestling with myself for weeks now about whether to shift my focus solely to stocks/options or not, and over the weekend I made the decision to go ahead and do it for several reasons.

The first reason is just simply because I don't want to be trading all day anymore.  Putting on positions and letting them work without making split second decisions really sounds nice to me for some reason, so that is what I am going to do.  I have been trading options all along and before my futures journey but I am shifting 100% back toward the equity markets now.  On this same note, not having to make split second decisions regularly will allow me to more thoroughly think out a trade idea.

12-15-13 Weekly Recap & Outlook

Next week is the big week, supposedly the Fed is going to taper although I have never heard them say anything of the sort.  Given that I don’t believe QE has anything to do with economic growth or jobs, I have my doubts about if they really will taper or not.  Aside from my beliefs, the market believes it..  S&P down –2.1%, NASDAQ down –1.5%, Euros up 0.3%, and 10 year notes unchanged.  It was great trading needless to say.
If you haven’t already, go check out the post I made during the week.  It lists all kind of indications telling us that the market needs a breather –> S&P 500 Party Coming To An End?

S&P 500 Party Coming To An End?

At least in the short term, you gotta ask yourself this question.  I mean it has been nonstop all year, and every internal you want to look at, as well as investor, is screaming it’s time for a compelling pullback more so than at any other time during the party.
A few charts we should look at that hold significance…

12-08-13 Weekly Recap & Outlook

Amazing what can happen to our economy in a week right?  We went from fearing the taper to embracing it with chests out in less than 5 days.  Obviously that is a great example of Wall Street not understanding anything about our economy.  The assumption is that our economy can stand on it’s own two legs now that the data is starting to perk up which has a high probability of being a fallacy.  An economy that lives by QE dies by QE as Peter Schiff said.

Trade2day1
Dec. 6 at 4:09 PM

the question people should be asking is not "will fed taper bc of fundamentals" but "can fundamentals stay strong w/o fed" $ES_F $SPY $STUDY

More Volatility To Come..

Today we experienced some awesome volatility that was much anticipated by me for a few weeks now, but I believe that this is just the beginning…
There are so many factors to look at to explain why the volatility is coming into the market this month; end of year selling after large gains, Fed December meeting/taper scare, VIX Bollinger squeeze being released, daily chart distribution, daily chart wedge broken to the downside, jobs numbers & on top of all of this market participants are actually embracing a correction possibility for the various reasons they want to see one which makes it more likely to happen and follow through.

Francs & Euros Look Ready For Liftoff

I have talked a lot about how bullish I am on Euros for the long term weekly/monthly charts, but I have also come to like the Swiss Francs as well.  In fact, I like how Francs look more than Euros but both are still looking very good as opposed to their counter-parts. 
Every other major currency besides these two looks destined for weakness.  Currency is a market that the fed cannot manipulate and with the ever increasing supply of dollars relative to demand the only logical direction the dollar can go is down.  As a technical analyst, the dollar is the weakest currency of them all.  There is going to have to be alternatives to the dollar in both currency and assets, and there are actions being taken by these countries to distance themselves from the dollar.  Dr. Paul Craig Roberts does a much better job explaining that in this video than I ever could.  I just see strong charts, and strong charts mean strong currency and more buyers.  I think these two currencies will be the premium choice.