ChartsEdge map for 3/5; and comments on trading equities

Market Map for Mar05

Posted: March 5th, 2009
Author: Mike Korell
Filed under: One-Day Market Map »

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Thanks again, Mike at ChartsEdge!

Folks - it's time for another review of HOW to use these intraday forecast maps. ChartsEdge has reminded us that they are to be considered for timing, NOT for trend direction - although of necessity, they have to draw some amount of trend onto the charts to make them readable, of course. You have to remember to look at them for what they say about the timing of turns intraday. Believe it or not, that did happen yesterday, but the nuances indicated for the turns on the forecast yesterday were so much more subtle than the way it played out that it was hard to "see". Remember - you will start to get a clue after about 60 or 90 minutes, whether or not there is a bias in the trend that starts to take over and re-shape the indicated slope. Even when that happens - as it did yesterday about an hour after the opening bell - you can still look to the forecast for the intraday timing of turns, while disregarding the amount of "slope" in-between those turns.

Here's what ChartsEdge posts at their site about these intraday forecasts:

The Market Maps are created to provide intraday traders with a unique tool to know hours ahead of time when the market is likely to change direction. ....

The data for the charts is derived from detection of VLF radio signals which affect the mood of traders around the globe.

[I added the bold emphasis.] You've got to think that traders' underlying mood can be changed if and when there are events that are "big enough" to take over and have a life of their own, so to speak.

For that matter, the ChartsEdge forecasts are not folded in with Elliott Wave or other structural approaches to trading, nor are they intended to be - so they are not an excuse for abandoning other trading techniques and tools. That's just one of the reasons why I posted that QQQQ channel chart yesterday - that afternoon turn on the ChartsEdge forecast was timing up pretty well in my eyes with the QQQQ's reaching potentially significant chart resistance. Whether or not the QQQQ's were going to overlap, or break out of that channel, was going to reveal something about the Elliott Wave structure. As an Unbiased Trader, I wasn't going to dictate whether or not the QQQQ's were that bullish - I just doubted that they were, and posted the chart to show that significant point. Sure enough, the QQQQ's managed to use that time indicated in the ChartsEdge forecast, to "make a decision" within the channel structure and potential Elliott Wave counts.

As for the Elliott Wave count - I see alternatives, of course (there always are), and a couple of them are that we completed a first wave down from what I marked as B (and Tony Caldaro has marked as 2 - and I believe Teaparty has marked as an E of a triangle), and then completed a smaller-level waves 1 down, 2 up (yesterday), and now starting that smaller-level wave 3 of a third wave down. It can be something else, of course - I bet there are some who have it spotted as having finished five waves down and a move down today would be only a pullback before moving bullishly higher.

I tend to think we are still in overall downtrend. Alternative wave counts are just one of the reasons to always be careful out there. And - if you cannot be happy trading, then don't trade (at least not until you've got a plan and stick with it for good results), so as always ...... - happy trading all!