Monday, September 07, 2009

Short-term analysis

It's Monday night and the Globex futures are UP 5.5 points. If this holds overnight, Tuesday should open up. Here is my five minute chart from last Friday afternoon:

SPX 5-minute

The last 4 hours of trading on Friday:

Try to get a feel how this game works. On these charts, it doesn't matter whether we are in a Bull or Bear market, all that matters is the direction of the next handful of price bars. On the above chart, a nice Sell around 10:30 (Pacific) flipped Long at about 11:45. Then another Sell triggered at 12:00, but 4 bars later (about 20 minutes) Blue Wave and then ATR flipped Long and stayed Long into the close. On all of these signals, the Blue Wave CCI confirmed by oscillating over/under its zero line.

So what is this and why is it appearing now? If I had posted it Saturday, who would remember it? Most everyone will wake up Tuesday and read this pre-trading or early into trading, when hopefully it will mean something. Speaking of which, note where the systems will flip SHORT.
Any decline tomorrow that drops below 1015 and stays there, will be a tradable short-term Sell signal.

What I am finding is that although not perfect, these trading methodologies are keeping me on the right side of any meaningful trends. Although most of my posted charts are for much longer term periods, it is the shorter-term charts, 5 minutes down to one minute, that provide the nimble shorter-term trades.

Finally, I'll leave you with this thought: Blue Wave and ATR are objective, rule-based systems. There are trading platforms that understand this kind of system. Translate these rules into the right programming language and the signals are traded by the platform, as opposed to traded by a fallible trader.

"So easy a computer can do it."



singlengle said...

Thanks for all you do allan,

Tomorrow I will be watching actc.

Hope all had a great weekend.

The Sound Center said...

Thank you, Allan. I appreciate it.

Short /ES at 1027.50 since Aug 28.

Anonymous said...


This is a wealth of knowledge. (Literally!*)

Your short-term 5min charts look spectacular. They seem to catch every subtle move in the market.

Are your ATR settings constant or do you change them for different time frames?

As generous as you already are, care to share those settings?

Sarah G.

Mike said...

Martha Stewart on CCI:

"It's a good thing"


thomas said...

great post allan.
I'm gettin there....
Ive been developing the skills in my head the last year,which is good... but now, I want to ask about this blue wave system. how much does it cost? how do I get it? and can it be programmed to work on many different time frames? well as many different markets? forex? etc?
thanks T

Allan said...

T: Where you see Blue Wave underlined in the blog, it is a link to their web site, just click it and most of your very good questions should get answered.