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224 views193 pages

Bryce Gilmore - Price Action Chronicles Volume 2 2007 Pages 1-50 - Flip PDF Download - FlipHTML5

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James Liu
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The PRICE ACTION V2 Chronicles The V2 volume continues on from Chronicles V1 in July 2007 The two volumes now cover 12 months of S&P 500 from April 2007 PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 PRICE ACTION CHRONICLES PRICE ACTION METHO! Our price action method is an approach to short term trading opportunity created out of the market money flow and the repetitive ongoing geometric swing structures that dynamically repeat over and over again. Our method is also based on the continual and repeating habits employed by “smart money” market participants. It is amazing how you can predict and participate in a lot of the shorter term market moves with this method on a day to day basis. PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 Price Action Chronicles — volume 2 CONTENTS: Cover, Contents and disclaimers Chapters: 2 ‘The FOMC 3une 28", 2007 2 End of Q2 and the 1“ Halt 3 4% auly Holiday week 4 Back to business as usual s Q2 Earnings Period s Back from holidays 7 Chart Roundup 5 Is the high for the year in? 9. After Thanks Giving day 10. Sub Prime woes continue 2008 aa. Appendix 12. Appendix 2 - April 2008 5-21 22-27 28-33 34-56 57-78 yo-1a4 aas-117 18-142 143-163 164-175 476 177-193 PRICE ACTION CHRONICLES (Volume 2) - © Bryce Giimore 2007 Price Action Chronicles V2 — One day at a time — Edition e12007-8 Conditions of supply : read this 6 Heywood Place, Helensvale. QLD 4212. 10 - Mobile 0419-576 923 - Email: bel 44cpbigpond neta PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 Chapter 1 The June 28™ FOMC announcement not far away: We are continuing on from the CHRONICLES Volume 1. Today is only the 224 Sune, 2007 so there are 2 few er more days ta go before the market either Feceives good news or bad news and right now the speculators are positioning It Is worth a look at the overall SPX position at the moment as It could hold a Conflicting technical view t the OEX ae just the other day the OEX went to a ew high snd the SPX couldn't quite do the same. 1 guess before we go on I should say that the current price action in the past 2 days has been extremely volatile, There ts a side to this market Who think the BULL PARTY is "never going to end and another more sensible side who are Unloading Hisky positions. ‘Then there are the BEARS, these guys are salling at every technical opportunity presented. Underlying all of this is the day trading money that is just buying or sel term opportunity on technical support oF resistance levels as they come: ‘So you could say that right now there Is a battle going on between the giants and the day traders are taking advantage of It backwards and forwards. This has Been going on for 3 weeks now in larger than normal dally ranges, PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 “Technically the big picture position of the SPX is still potentially up in the MAJOR degree, but every indication In the lesser degree swings pont a picture to & downtrand In progress. This Is not to say we are set up for a crash, yet the BUY Side’ only appears to be an option to me if you have lews than 9 2 hour ime onion right now: ‘These recent highs are turning into a 15 round fight for the bulls where the bears get them on the ropes time and time again yet they cart put them away. Gr maybe some would aay it te the other way eround, fut Wf you look at the hatte over the pase 3 years you would have Be siding witn the bears at this Dust the other day the bulls showed how vulnerable they were to the market adtion when they couldn't hold the market Up It was only yesterday when an OEX 61.8 reversed the market up for the rest of the day, yet today we went down to a lower low after only a 1 day correction, ‘This is the recent price action for the SPX as we enter the last week of June. As you can see it has been a wild ride for both sides during the past 3 weeks. ‘The Bears seem to have the upper hand in what we could describe as the larger degree swing formation. Nevertheless the decline from 6/1/07 — 6/8/07 was down 53 points and their remains 3 technical support levels below today’s tow. PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 In order the larger degree implied supports are:~ 1. ‘The 6/13/07 pivot Low. 2! The 6/8/67 pivot Low 3. JS3.an'a T"down from the 6/15/07 High. ‘The MAJOR DEGREE position would imply that until all of these supports are broken we cannot rule out analysis that suggests this corrective phase is What PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 1 dont want to start the Volume 2 Chronicles off looking like a bern again bear, All Tam doing is painting out the guidelines 1 normally follow. These are that swings expand and contract in varying degrees based on Elliott ‘The magnitudes of swing size range up in the following order:~ 3. medium to large 4. large to larger, 5. larger to major, and major to cycle dearee. A strong trend either up or down is usually comprised of 3 or 4 impulse legs Gnere the corrections usually ‘do not excesd the prior corrections in price Smplituda; if thay de then the wave degree increases up to a higher degree. Seong Sipport w combined wien This is the general idea. Corrections in most trends, either up or down, usually unfold in 2 to 3 impulse lege of similar degree. If the corrections unfold in” impulse lege the inner Corrections should not exceed the prior correction to maintain that degree of tend; although It le possible ‘sometimes that a. future corrective: swing wil Sxcoed a prior corrective swing by a relationship of 1-618 to 1 These are simple rules to follow if you are a trader and most times they will give You a good read over the market diracton and a chance to enter trades at Sctreme points where reversals often take place PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 ‘The rules also tell you when a continuation to another level of swing degree is taking place. When you combine the simple rules with price levels of 38.2, 50, 61.8, double tops and double bottoms lt becomes clear to you why the market is heading one Way or the other on an intraday or day by day basis ‘One of my best rules for determining a continuation of trend when you already Rave 2 impulse tgs and a breakout to new levels ig that the next correction Should not exceed 1:1. with the prior correction” of ‘similar degree and the Fatracement to all gains from the beginning of the series dows not exceed 38.2 of the existing swing series. Now when you add pattern analysis to the equation the market ditection can Become a ir clearer it i= all bucause of waders habits and haw they View technical support and resistance levels. ‘When it comes to taking trades our aim is to only identify when one side, either the buyers oF the sellers are in @ weaker position than normal; because each side has thelr own weaknesses and you ean identify them you can make easy Money. You must also remember that the smarter guys In the weaker position Wil'aite react to the situation and help exacerbate what you maybe thinking. the above criteria it pays to siton the fence and walt In the trading business you will never get rewarded for guessing, all this will lead 10 Is'over trading and eventual losses I have always said that you should have at least 3 good reasons for taking any fade and the direction of the trade you are taking should be based on some Fecognizable geometric set Up that te either present at the time or the market fs progressing along from @ previous set Up of higher swing degree. Now 1 hope this makes sense to you as It does to me. I do realize that not everything 1 say Is exactly clear to everyone on the frst read. I found the same thing ‘out myscif when T'was studying Gann work yesrs ago and I used to Spend hours and hours revreading his material before T could completely grasp his writing style. 1 suspect many cf you will have the same tasue with my wring Shyla, but if you persevere you will eventually gat ity better to spend the ume to Understand than'to ge elsewhere as this stuff I am teaching you Is the best In the business, 1 have already pointed out many of the standard set ups I use in the PAC Volurme-1 but if they are not enough to teach you then this Velume-2 should Be: PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 ‘You should always keep in mind that market support and resistance can only be Gemporary and tntil the market "everses up or down for more than 2 days ie does net mean anything to the bigger picture Unless It develops Into a crash ‘The first conclusive technical evidence you will witness for any change of trend in Any swing degree starts with the breaking down of prior 11 corrections in that Suing degree and also an overbalance OF the larger swing degree by more than 38.2 Gr the total gains Here's a simple guideline to follow. ‘When you start with and follow the basics the world will be a better place for you, a you learn more your control over your actions Will also Improve. OF course there is no reason why the market cannot hold support on any of the evsie Such ae the 50, 51-8, 76.6 or double bottom in a swing series such as this, but it will not be in & strong position until such time as the prior high has been exceeded, ‘So the thing you want to think about overall is the medium, large and larger degree direction and where you can make trading entries back in the direction oF those exisung trends. ‘This is where you can excel in intraday trading with the small and smaller degree Swing reversals and breakout tades a¢ they come to hand. My overall policy has always been to monitor the market swings as they unfold in Bll degrees oF swing movement and then place more emphasis for trading primary key to success PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 Even In times where the trend Indicators (which are lagging) do not agree with the price structure I will always go with the price structure and the volume. About the only reason you can find for losing if you understand my method will be overtrading, guessing and hoping you are right when the market ts not S5recing with your pesition will Noe Map. If you are trading you want to be sitting there watching what is going on, if you dont wantto de that then you might as well go buy lottery tickets and hope ‘You cannot play good poker unless you are sitting at the table, and that Is about the long and the short of It. “This Is the larger degree picture In the ES futures right now: Friday's low on a 78.6 retrace with an Alternate 1-618:1 level Combining larger degree Tevela below today that, would Imply some support it they ware the last shake out following the high on the chart. If this market Is to return to Sn uptrend ft has to find buyers in'@ hurry. If doesnt then we know where kis Going to 90. PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 Now we have @ starting point to work with. Points of interest are these: 1. Tf we rally from here we have retrace levels to break above. 2) The big test of strength will be to rally over #19 the 1:3 If the ES can rally above +19 from this low of 1513.50 then I would view the: situation ae more positive for the bully; in the mean time they are caugne ina bad situation technically. This means that if the lower Implied supports do not eld the bulls will be liquidating positions in 3 hurry. For a day trader the situation is as simple as this right now and it Is all based on geometnc relationships. So until the ES can rally better than +19 T would favor Gniy selling set ups It Is conceivable the market can rally to a new high from here but it will take a Process of proving Itself along the way before it becomes a convincing argument. Geal with It. The week ahead will be influenced predominantly by the speculation Surrounding the FOMC rate policy announcement to be released at 2:15pm ET on ‘Thursday. Key Reports leading up te the FOMC this week: The bulls will be out there yelling out BUY as they think this is the best Opportunity you will get in the Mext 12 months. ‘The bear side will be yelling sell as this market is going down at least 10% from hore. That te what they think: 1 don't care who wins in the long run as long as we can grab a piece of thelr Action up oF down along the way; always my view Is one day ata time. PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 Monday 25" 3une, 2007: ‘The day started with a move down below the Globex low of 1516.75 to 1510.50 nd then rallied up 17-50 with two 4.50 corrections. ‘The high for the day was still below +19 (1:1) I had mentioned the day before so when the market stalled and went sideways for 2 hours It sot up’ distribution breakout trade to the downside which terminated at 1505 just after Spry ET. ‘There were several clear cut PRICE ACTION trades along the way today, but Gnectively with the new low conditions havent changed; all they have done ts ‘Consumer Confidence and New Home Sales coming tomorrow at 10:00am ET will probably aive the players some reason to move ES up or down. ‘The larger degree pattern dawn from ES 1554 is currently forming a waterfall type pattern and ad I said before yesterday we would need to rally greater than 79 to even think the downtrend IS complete, On top of the 11 Is 4 38.2 retrace implied resistance level st exactly 19 from today’s low, PRICE ACTION CHRONICLES (Volume 2) - © Bryce Giimore 2007 1t was a roller coaster ride from the beginning of the day but at midday the ES. Posted a Second attempt to get above the 61.8 and ran into selling pressure. PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 ‘The real problem for the bulls lies in the actions of the ES futures close in the laze 15 minutes attar the cash markets closed for the day. ‘This will create an interesting situation for the players when we get to the open fomortow. Those whe tade purely on price slone wil have Sell signals hastting ‘The Globex session overnight, if it stays down, will be @ major issue as many US Stocks will be trading on European exchanges as ADRs before the day session in the USA begins. If the ADR's take a hit then that will have the US market makers Scrambling on the Wail Steet open. We will be able to tell before the Us open, when we review the Globex price action, so far the Globex has been down & further 2.50 points from today's close and it'is only just after midnight USA time. at vit 294 ‘This Is not a technically corract chart, but It pays to look at It considering the double bottom situation. Nevertheless If you were to apply other rules to We lke the Soverbalance” against the prior decline the only thing to say is that it Is the list hope for the bulls Following this chart: [only showed i€ to you for the sir Foason that others could be looking at it ‘Alle means to me is there is an Shomaly in the present situation which could phase out a few people. PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 W ounsan 9: 250m Weanesday ES Is still down in the futures prior to Wall Street open. Wednesday 27" 3une, 2007: ‘S&P 500 cash opened down today slightly overbalancing the technical up trend in the larger degree. It is not very often you see @ gap opening on the SPX, nevertheless there was. ome initial ‘support and it seems to have stapped a’ wholesale sell off from, faking place. So now it i= back to busines: as usal. There was a risk that there could Have been's major wipeout after the open but ie has been quite orderly Quite an extraordinary day today; basically up all day from the morning low. This Was not what everyone was thinking would happen at the beginning oF the day. System swing traders Would have been caught short at the beginning of the day and paid a heavy price Tor It Like I have said on many occasions; “TRADE WHAT YOU SEE AND NOT WHAT: YOu THINK PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 ‘The day finished on its high and the range up has exceeded all of the progressive corrections on the way down. ala fii alt | “Things are not always as they seam but if you follaw the price action it will tell you when to ignore your opinion and go with what you See. ‘Technically the larger degree picture Is down but the shorter term is now up. Bear in mind that at this stage it is only a one day correction in a 10. day downtrend. Nevertheless yesterday's rally exceeded 38.2 of the run down form ‘The chart pattern has taken on the form of @ WATERFALL with lots of gusrlapping pivot levels which is avery difficult sitiation for trading systems to ‘Tomorrow we have the FOMC rate policy announcement at 2:15pm ET. The FOMe mects "every "6 "wooks "and. these announcements are” generally Becompanied with volatile trading conditions for about an hour after the 2-15pm, Gnnouncement. The bears are praying for arate Increase and the bulls are hoping for drop of 0.25%. The cangensus is pointing to an unchanged rate but the interesting point Is, how will the Market Interpret the Mewest statement coming from the FOMC mesting, PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 SPX: 27° une — Time & Price ‘You know over the years I have run into lots of situations like this one. Where the “overbaiance” is"so small tat it creates» doubt as to how accurste you can, be with time and price. Is the time and price “square” or not? Some people think Ris'and some dont if you look st the market performance then mare think kf than those that don't. 1¥ you were to forget all the fundamantals of this market ‘you would have to think on a purely technical basis this market could continue to the Upside from here. 1 personally don’t know what it will do, but It Is food for thought and worth the: Giscussion. The rally yesterday certainly put a lot of distance between the low nd the close. Up Until such time as we ® us? Well by my rules T have to assume we are going Werpalance’ thé small 1:1 oF-6.75 in the rally today, PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 2:15pm: Rates unchanged; nevertheless trader's ran the ES up and Gown and up and down In swings totaling 50 points betwoon ‘Sand the close. se1825 {BBG} Even If it stays around here today and does not br. Bbove 1528 the 1517 will be the support tomorrow, Kup ssus0 (Richard_To} 3 Day Swing remains down unless 1528 breaks (eao29 (BIG) correct Have a look where the high was today, right on Monday's high and the Floor traders RI. “The trend is still in question until it can exceed a 61.8 retrace of larger degree Swing down, ‘So far the large swings for the week have exceeded 100 points and the ES is Basically back where I started on Monday. Bayou want to Wade intraday or would you be happy to take medium term System positions? Leaves 2 lot oF room for contemplation! PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 Now the FOMC is out of the way we stil have end of Q2 and the 1 Half year Jook Keeping too get past tor ‘There Is always something else to consider as each new day passes by. PRICE ACTION CHRONICLES (Volume 2) - © Bryce Gilmore 2007 Chapter 2 End of Q2 and the 1* Hair: This could be an interesting day as it is also a Friday. The end of financial quarter datas will Usually see hedge funds and investment funds actively trying S'push the market up in most cases and down in the case of the bear funds, ‘These days are commonly referred to as “window dressing days” because the fund managers will be tying to “dress up" the books fer’ thelr quarterly Performance figures. Most of the funds involved do net use any of the short term methodologies that We Use

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