anyone out there palying the indexes and using spreadbetting
can we concentrate on:
djia
ftse100
cac40
dax

lets see what entry and exit signals we can come up with using
gann
rsi
to see if we can predict profitable trades and concentrate on stop losses etc
love to hear from you all
zarif

Afternoon everyone:
An intersting article that i came across on my sorties in cyberspace.

Re: The 50% retracement article for the dow:

That level represents the half-way point between the all-time high of 11,722 reached by the Dow ($INDU: news, chart, profile) and its low last year of 7,286. The blue-chip average has been hovering around this level for several weeks now, closing modestly above it on some occasions and below it on others before ending Tuesday's action at 9,576.

As Jack Adamo of Jack Adamo's Insiders Plus newsletter put it recently: "According to Dow Theory, when a bear market rally makes up more than half the decline from the previous top, it is more likely to test the old high than the old low. Obviously then, that halfway mark is an important juncture."

Richard Russell, editor of Dow Theory Letters, adds: "I'm interested to see whether the Dow can pull up and away from 9,504, or whether 9,504 will act as a 'magnet,' and in the end be too much for the Dow to overcome."

I nevertheless have my reservations about this 50 percent retracement principle, for several reasons.

First, it's not clear that either Charles Dow, for whom the Theory is named, or William Peter Hamilton, who spelled out and interpreted the Theory in a series of Wall Street Journal editorials in the first three decades of the last century, ever mentioned this principle.

That's according to Bill James, a Sacramento-based investor and author who has devoted much of his life to studying the Dow Theory. James has been working on a book about the Dow Theory for 20 years, and not only has he not found any reference in Dow's or Hamilton's writings to such a principle, he believes that they would have "quickly discarded" it as being "too much in conflict" with the rest of their Theory.

Apparently, the 50 percent principle was instead introduced by E. George Schaefer, who published a newsletter in the middle years of the last century by the name of Dow Theory Trader.

On one level, of course, it shouldn't matter whether this principle is or isn't part of the Dow Theory. The key question is whether it is a helpful market-timing tool. And I'll get to that in a minute.

But it is important to be clear and precise about what any theory entails, for without that precision it becomes difficult, if not impossible, to judge its effectiveness in a scientific way. For example, if someone told you that the Dow Theory has a poor track record, you wouldn't know whether the Theory that was tracked included the 50 percent principle or not.

All in the interpretation

In any case, the key question is whether the 50 percent principle is effective. Answering this is not as straightforward as you might imagine, however. It depends crucially on how it is interpreted.

For example, Adamo's formulation of the 50 percent principle is true, but only trivially so. Even if the stock market's movements were entirely random, the 50 percent principle would still appear to be true.

After all, if I'm closer to the market's high than to its low, which would be the case once it has retraced 50 percent of the previous bear market, random volatility alone would make it more likely that the market sooner makes it back to that high before making it back to that low.

To study the effectiveness of the 50 percent retracement principle, I therefore measured the stock market's performance following periods in which it had retraced 50 percent of a previous decline. If the principle is in fact useful, then the market should have performed better following such periods than following other bear market periods when it had failed to retrace 50 percent of its decline.

Here's how I designed my study:

First, I identified the 18 major bull market tops that occurred between 1896, when the Dow was created, and today.

Then for each of these market tops, I identified the first date thereafter at which the market had declined by 10 percent. I examined all trade days from then until the market subsequently surpassed its previous top.

Next, I segregated all these dates into two categories. The first contained those on which the Dow Industrials had retraced at least 50 percent of the decline from its previous top; the second contained all others.

For all dates in both categories, I measured the Dow's performance over subsequent periods lasting three, six and 12 months.

What I found was that the market performed almost exactly the same regardless of whether the 50 percent retracement principle had been satisfied.

On average, over the three months following trade dates that satisfied the 50 percent principle, the Dow gained 1.0 percent. Over the three months following trade dates that did not satisfy that principle, the blue-chip barometer on average gained 1.3 percent.

Though this difference is not statistically significant, notice that the market actually performed better following periods in which the 50 percent principle was not satisfied.

Consider next the difference over the subsequent six months. On average following periods in which the principle was satisfied, the Dow gained an average of 2.4 percent, as compared to 2.7 percent following periods in which the principle wasn't satisfied. This again is not statistically significant.

And over the subsequent 12 months, the average gain was identical for dates in both categories: 6.1 percent.

To be sure, my particular formulation of the 50 percent principle is not the only way of interpreting it. But the results of my study suggest that it may not be as effective a market-timing tool as many consider it to be.

And that, in turn, suggests that the 9,504 level may not be all that significant after all.

where is everybody today?

Probably on the Dow thread, zarif.
That is a long article and what with the amount
of red wine I have drunk too difficult to interpret.

Wine - The best invention / disdcovery by mankind
The only friend that is at our side at all times - happy, sad etc and never complains and "the liver is the most forgiving organ in the human body!!!"

rgds
zarif
happy trading

Hopefully it is going to be a LONG LONG DAY tomorrow
rgds
zarif

Dow on a downer again after kodak news.
Are we on Shorts again today????

rgds
zarif

Snoball, megabucks, jules99 and everyone look at this:

Buy Kleeneze at 150p or below.

Current mid price: 136p
bid/offer: 132/140
stop loss: 120
Limit buy: 150
Sector:retail
Target : 190
market cap: 64million
Epic Code: KLZ

What do you think?

rgds
zarif

I wish the Kleeneze rep would pick up his catalogue.
It's been there for days.

SNOBALL:
very true but them being a christmas club/hampers -their subsidary farepak will deliver atleast 45000 hampers (xmas puddings) this year.kleeneze distributors knock on 100m front doors each year.(17000distributors)
This is not the most actively traded stock in the market hence the target of 190 and limit buy at 150p or less.

by the way back to our main trade on dow??
how are they going.??
rgds
zarif

Found support at 9390.
Just breaking out above 9420.
Fed have pumped 7 Bn (net) into it today.
They won't let it go without a fight.

lucky break yesterday as i had closed all the longs and was just about to do some more when it took a nose dive and i chased it with shorts and closed them outaswell.Today am just looking at the screen and waiting.

By the way guys what no of points do you put your stop losses at and if you dont mind what /pts do you go for etc

rgds
zarif

Dow Jones - Key levels & Trends 26 September 2003


Support breached

The Dow Jones had been up before it moved sharply lower at the close ending the session down 82 points at 9,344 and just a fraction above the long term Fibonacci support at 9,336.
Most importantly the index moved down through the support line and should the Fibonacci just below give way we're most likely heading for 9,000.

Resistance is 9,467 (the lower old support line) and then the upper resistance at 9,671.

Don't trust that Fibonacci. Seems like magic.
JuJu talk, just like that wave stuff.
Works very well AFTER the event.
Besides, who can understand and calculate it on the fly?

Watch the price!!

Snoball:
The dow took a good dive last week and the footsie being around 4150-4175,What are your feelings for monday and the week. I think that it is going to ( the dow) fall to around 9100-9160 if the footsie doesniot recover.

Btw Fibronacci,ellion,gann -forget them as u say they are alright after the event best to follow the price and trust your instinct at times and u can see alot more happening in front of your eyes and react much faster than looking at charts all the time.

best rgds
zarif

I didn't say don't look at charts, zarif.
I just prefer price related indicators.

I'm guessing some upside tomorrow. But only a guess.

Snoball: I know what u meant -no offence taken
Your views good/bad are all appreciated -We can all learn from each other:


Hello everybody
Its Monday again and waiting for the Wall st to open in an hour (1400gmt).What do u think we have in store today. I think it will be volatile to say the least and if we look at the prices both long and shorts (hold them briefly )WAtch the PRICES -its possible to make money. Also because it being the end qtr today -likely to have an upward shift.

Let me know _ ps I have taken some anaesthetic in that it does not hit me that hard

rgds zarif

Brief summary from my travels:

Dow lost 30.88 points to close at 9,313.08. Dow's 14-Day Relative strength Index (RSI) is:41.72 and trending down. Dow is trading below 13-Day (9493), below 50-Day (9357), above 200-Day (8690) Moving Averages. Dow is trading with negative momentum. Dow's resistance levels are: 9429, 9550, 9699. Dow's support levels are: 9196, 9079, 8976.

Type High Low
52-Week 9,686.08 7,416.64
60-Day 9,686.08 8,997.11
21-Day 9,686.08 9,303.82

rgds
zarif

Ps: try a website gives 2 weeks free trial_ no credit cards needed.
www.sixer.com
let me know what u think of it

Zarif, what is the typical/average contract size that traders trade on an index, I suppose the minimum is 1 per point move? and max 1000 per point?

To test the water I did my first dow contracts ...

5 pound a point contract at 9336 followed by 10 pound a point contract...from 9342...

Up so far....it's quite a rush at first, especially as it moves lightening speeds, stops you walking away...

Your not bold Zarif...? lol...could easily lose ones hair at times...lol..

Jules99:
To answer your question i would say this:
a): depending on the company you can put 1p/pt to say 1000 per point -but I dont think it would be wise to do 1000 per point unless u have won the lottery and cghances are u could lose it in one swoop.!!!
Some companies allow 2/pt as minimum.
b): I always open a bet with 2/pt and if my decision is right then i will put my normal size at 15-18/pt. I dont wait for it to make me loads as soon as i am comfortable with the amount gained i will close it even if it then goes( and more often it does) to show a greater gain after closing.
c):Think of it as a game and never risk your whole pot.
d): stick to your stop losses (adjust them etc accordingly) to lock in your profits.
e)be prepared to take small losses dont let the trade carry on especially if it is going against you or u will end up losing a lot more and your profgits financing your losses.

you have to watch the dow as it is volatile and hence the risk/reward ratio is there.They say when in DOW you WillEither Say WOW or OWW!!!!

rgds
zarif

I like that last comment...so far doing ok...:-)

At this stage 5-15 a point suits me fine, so when the market does go against it's not a huge loss...also using CMC CFD's a/c they always quote a 5 point spread, is is normal...or should it be 4 point spread?


When the DOW closes up tday...it normally has a high % chance of positive effect on the S E asian markets right...You know what I'm thinking today...

what are thoughts...