Thursday, June 2, 2011

6/2 pre-open

I ignored the DJ futures 10-minute, 76 unit M/A and am waiting on a return to SP 30-minute M/A.

I want to respond to comments requesting how-to on my techniques.  I don't use much in the way of technical analysis.  I do like stochastic on hourly SP futures, but the degree of the upcoming moves cannot be determined by technical means.  It is reactive and will leave you at the station when the volatility increases beyond recent history.  Likewise, whipsaw trades when trend turns into trading range.  If a trading range is unusually long then I give it credence and will look for a way to enter near the bottom of range if I expect upside breakout.  My style is to have an expectation of the degree of the upcoming move.  This means I'm not reversing but looking for ways to enter in the direction of this expectation.

The moving averages I use are selected from a host of others that I have found useful over a long time.  The list includes:
DJ futures 10-minute, 76-unit +.3% envelope
SP futures 30-minute, 92-unit +.5% envelope on a 30-minute closing basis
SPX 15-minute, 54-minute +.56% envelope
DJI 5-minute, 370-unit +1.35% envelope, the critical M/A

These change over time as the market's internal clock changes.  The selection of which M/A to act upon relies on my next-day expectation of market behavior.   Daily M/As are used when I expect weekly counter-trend moves to begin. 

The key here is "when".  My approach to markets is based on sentiment gauge over time and a M/A is selected based on the timeframe for reversal.  I tend not to trade breakouts because so many people do and everybody can't be right.  If a breakout coincides with a key M/A then fine.


  1. Steve,

    I have in my notes that the MA's you listed above are simple moving averages EXCEPT the critical DJI 5 min, 370 which is exponential moving average. Is that correct?


  2. pima, the DJI critical M/A is an exponential.