March 25th. 2011We have been saying for a few days that the market is at a very important price level in this correction. It is more than just looking at a Fib retrace and shorting the 50% anyone and everyone does this.
It is looking at the NQ, ES, TF and YM to see which one is "In play" or when they all get to a point that it would make sense to have a move down.
If you look at the charts you can see the YM and TF have retraced much more than the NQ and ES. We have our opinions about why this is happening but I do not want to get side tracked on this post.
There is another element of the market that is important which is the time element. Have you ever picked the top in the correction lets say right at the 50% to go short and you enter short but the price hangs up at the 50% for hours before the move to the downside actually starts?..
Why does that happen? It is because the time element still needs to complete before the move happens. I agree the price is the price with no bearing of time but WHY the price starts and stops at certain levels is also very important.
Lets look at the 30 min TF chart and I will show you something that might be new to you or maybe you are already a pro?
Side note: We are big into Fib price levels. We use Fib retrace, extend, reverse and extend inside levels.
ppb stands for points per bar. From the low to high the average points per bar is 0.1616 which is very close to 1618 which is a extension fib 1.618
tf stands for time retrace which the number is 6.1873 which is .618 retrace
There have been 370 bars up in 10.29 days. This chart is 24 hour data if you go to a normal session chart there is 109 bars up which is very close to 110. So we would have 110 bars up in 10.2 days. That is very close to the same.
The TF has gone up 59.8 points.
If you take 10.29 and divide 370 you will get .027 which is 27% which is very important with timing.
Also take 370 and divide 59.8 and you will get 6.18 (.618 again!)
This is just the TF chart the ES and YM also have some very wild numbers at the high that was put in today.
What does this all mean? It could mean nothing or it could mean everything meaning; if we go down from the high that was formed today it could be a big move down at least to the 730 level.
I would have stops in on all of my long positions.
If we break higher the chances of making a new high is very strong. Not just a new high but we would have a fairly big move to the upside. This timing is only on a 30 minute chart so it is not as strong as a daily or weekly chart.
Until the market opens we cannot say for sure which way the big move will be but know that a big move is very close to happening in the markets.
The thing that is important is we are having the price and time come into play at a very important level on the bigger charts. Every big move starts small and builds into something bigger so the point is if we fail to take out the high we made today on Monday then we could be starting something bigger to the downside. Of course we will have to wait and see but we will always position ourselves for these moves. We do a nightly video each night for all of our members.
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