how do you see the dow index going today Dow Jones and S&P commentary: Signal Watch Dr Bob Hard Right Edge Raptor Research Charting by Snoball: Dow Chart S&P Chart Drinks & Break Time at: GD's Famous Tea Room & Watering Hole"

DOW JONES @ LIVECHARTS

WASHINGTON (AFX) -- The September nonfarm payroll data are 'terrible' with an increase in govermment jobs masking underlying weakness in job growth, said Robert Brusca, chief economist at FAO Economics. Although headline nonfarm payroll jobs grew by 96,000 in September, private sector employment only increased by 59,000 in September. 'We've had a number of false recoveries in this recovery and could this be another one and shouldn't we be more cautious and worried,' Brusca said.

This story was supplied by CBSMarketWatch. For further information see www.cbsmarketwatch.com.

They certainly seem to want us to sell, don't they hjs?
Dow up 20 as I speak.

Now down 13 as I write.

Not far off hjs! Nice call.

zzzzzzzzzz..............!!!!!!!!

The Bullish Percent Index looks interesting.

any thouights on DOW. Seems to me a probable own day, especially if oil inventories are weaker than expected

I think that Bullish Percent Index says it all orky.
It seems to have broken the 10000 support, but then anything can happen on the Dow.

Snowball

please advise where I locate the bullish % index

In post number 2235. Just clik on the blue writing.
Or click on Dow Chart (in blue) in the header.
Look around the site and you will find an explanation.
Basically it is a chart of all the NYSE stocks combined.

I meant the Dow had broken support. Not the Bullish %.

I can't believe it. Had a short on the Dow from 9927 with an amended stop at 9930 - it hit it EXACTLY, before going down again. That's happened about six times today on FX - stops hit exactly. Now do I short it again, now it's below 9900?

Hi Maggot.

DOW is a manipulated Price weighted index.

Maybe consider using the same position size on the S&P,
which is a different animal?

Last swing low on the S&P was 1101. This needs to be breached
to turn the swing chart trend down.

The DOW is the only Index in which the swing chart has turned down.
Surprise, surprise. All other US and Eurozone Indices are still
correcting down in what are still, atm, uptrends.

IMHO, shorts should be considered with the S&P below 1100.
Well, they will be by me, at any rate. :-)

Melnibone.

Sorry to hear that, Maggot. That's why I'm not betting on it any more.

Dow looks to be frisky at the moment. Luckily I closed my earlier small shorts just a couple of minutes before it turned up at 5.05. Am tempted to long, but it's too obvious, really, isn't it? Looks as if 10,000 will be hit again, though. I can see why the S&P is a better bet - less quirky.

Lost a few shorting the ftse earlier, but made it back and more longing the Dow. closed some but some still running. Would like to see it try to reclaim 10,000

Any of you chaps think the downward channel will remain intact and expect it to hit 9800? There was some very poor data out of the US last week - a good time to sell the $

I don't see any other support levels before then Baughfell.

The Dow

Here's some stuff about stops that some might find interesting.

Exits - Are Your Money Management Stops Too Large or Too Small?

by Chuck LeBeau and Terence Tan

It seems that Money Management stops are either too close and subject to frequent whipsaws or too far away and expose our capital to large losses. From the results of our testing, we have concluded that most systems would benefit from the inclusion of relatively large money management stops.

At first thought it would seem that the closer the stops and the smaller the losses, the lower the expected drawdown. However, this seemingly logical assumption does not hold up in testing. In almost all cases the wider stops result in a higher winning percentage and a lower drawdown. Smaller stops appear to be psychologically attractive, but may actually deteriorate system performance because they are susceptible to frequent "whipsaws" caused by random and insignificant price movements. On the other hand, large stops may also be psychologically attractive because they are activated less frequently, and systems with large stops generally tend to have a higher percentage of winning trades. However, the down side is that large stops force the trader to occasionally suffer rather large losses which, although infrequent, can be psychologically difficult to accept as well. Is there a compromise solution to this problem?

We believe there is. An interesting phenomenon we have observed from our research is that it is often possible to tighten the money management stop a short period after the initial trade entry. It has been our preference to allow the trade some latitude to work out in the beginning and this is best accomplished with a relatively large money management stop during the first few days of the trade. However, after a specific number of days the money management stop can often be reduced to a much smaller amount. For instance, if we have a $5,000 stop upon entering a trade on the S&P 500 futures market, and this is an uncomfortably large loss to take, it may be possible to leave the $5,000 stop in place only for the first few days, and then tighten the stop to $2,500 for the remainder of the trade. The chances of being stopped out late in the trade with a $5,000 loss have been reduced, although it is always possible that a large adverse price movement in the first few days could still stop us out with the maximum loss. The exact stop amounts and the time of implementation would have to be determined by computer and statistical analysis of the system's characteristics. In some trend-following systems, we have found that we can benefit substantially by implementing a larger stop in the beginning of a trade, and then reducing the original stop by 50% or more once the trade is underway.

This technique of tightening stops after a few days in the trade has a sound basis: we know that the predictiveness of a trade entry indicator declines as the trade moves out into the future. In most cases an entry indicator has a better chance of predicting the price movement in the next 2 days than in the next 2 weeks. Starting off a trade with a large money management stop allows the trade sufficient room to work in the right direction, since it corresponds to a period of high confidence in the entry indication. As the trade moves out into the future, the confidence of the entry indication declines, so we tighten up the stop to reflect decreasing confidence in the trade.

Other possibilities for dealing with the problem of large stops also exist. Stops such as breakeven stops or profit protection stops that over-ride the money management stop can easily be implemented in later stages of the trade. Once these stops are activated, the possibility of taking the large original stop loss is substantially reduced or eliminated. These and other techniques will be fully discussed in subsequent chapters.

Conclusion

Proper understanding and implementation of the money management stop is vital to a trader's survival. The stop effectively limits the maximum loss that may be sustained in a trade, which in turn contributes to the all-important goal of preservation of capital. Trading without a money management stop is to allow for a high chance of catastrophic loss in your account.

The importance of the Money Management stop is aptly summed up by Jack Schwager with this statement from his book, The New Market Wizards: "If you can't take a small loss, sooner or later you will take the mother of all losses."

About the Author: Chuck LeBeau is the co-author of Computer Analysis of the Futures Market, and the former co-editor of Technical Traders Bulletin. Chuck is a featured speaker at IITM's upcoming How To Develop A Winning Trading System Workshop, November 12-14, 2004.. Chuck has 27 years experience in the markets and is widely known for his specialized knowledge of technical analysis. He also develops trading systems and currently runs a website devoted to trading topics; http://www.traderclub.com. This article is under Bulletins from the "forum" section of Chuck's informative site.

Snoball, thanks - good article.