The picture below shows a 5 minute chart for mini gold (YG) for 2010, June 29. The main side-by-side trading session for gold occurs between 7:20AM and 12:30PM CST. During this trading session, the volume is the highest and this is the time I trade the short-term gold charts such as the 1 minute, 5 minute or 10 minute charts. I have added the MarketWarrior indicator Super-Pitchfork to this chart using Change In Trend (CIT) points that occur during the side-by-side session. I have activated the Super Pitchfork’s Pivot Box which is labeled below. One of the most important observations of Alan Andrews was that prices will return to the Median Line the majority of the time. Alan Andrews did most of his research on daily charts not intraday charts, but the principle applied to intraday charts just the same. The Pivot Box represents the area where the price has the highest probability of returning to the Medina Line. On the chart below, you can see the price returned to the Median Line at point A. The price then fell and formed a CIT on the Lower Parallel Line at B. Finally the price rallied to the Median Line again at point C. When a market is not in a string trend, the Super-Pitchfork is a very helpful swing trading tool.
Here is my current 60 minute chart for gold. I am using a fixed price scale of 0.50 per bar. On this chart I have added the MarketWarrior indicator Gann 1×1 Lines. This indicator will draw Gann 1×1 lines from all the tops and bottoms. The 1×1 lines are drawn both up and down from each market pivot. The 1×1 lines are the diagonal light blue lines on the chart below. I have added red arrows to identify where the gold market made a Change in Trend (CIT) on one of the Gann 1×1 lines. I use these lines to help identify potential CIT points.
60 Min Gold Chart 1
On the second chart seen below, I have added the MarketWarrior indicator Sq9 Chapter 2. This indicator is drawing support and resistance price levels from W.D. Gann’s Square of Nine. I have again added red arrows to identify where the price made a CIT on or near these price levels. This included the all time high price for gold that occurred against the Square of Nine price level 1261 on June 28, 2010.
In this posting I am going to discuss using planet lines. At any given moment, there are thousands of stock charts that are working out the tops and bottoms close to planet lines. The chart below shows daily General Electric (GE) and the MarketWarrior indicator AT_Planet Lines. This indicator is set to draw the planet lines for the Sun. I have added two copies of this indicator with one drawing direct and the other drawing inverted. This creates a cross hatch grid pattern. On the first chart below, I have added red arrows pointing to Change In Trends (CIT) which occurred on or very close to a planet lines. This does not account for every top and bottom but most of the CIT do work out very close to a planet line.
The second chart below shows a continuation of the first chart. This includes the data through the current date. You can see there are a few more CIT that worked out on Sun lines. I would expect this to continue in the future with more General Electric CIT forming on the Sun lines.
Trading gold has been fairly easy recently. Here is another example of using MarketWarrior to trade the mini gold futures contract (YG). I have been told by some of our readers that the mini gold symbol is different at some brokerage firms. For example the mini gold symbol at Lind-Waldock is XK, but you should make sure you are trading the correct contract with your broker before trading.
In this example I am going to use two time frames to trade gold. The first chart below is a 60 minute chart. I have added the MarketWarrior Bollinger Bands stop and reverse indicator to this chart. This is used to determine the trend direction on the shorter time frame. On this chart I have circled a point on June 24, 2010 labeled A, where the stop and reverse indicator turned upward. This indicated the trend is up.
The second chart below shows a 5 minute chart for the same mini gold contract. On this chart I have circled the same area where the 60 minute chart indicated an up trend. Once we know the larger 60 minute trend is up we are provided with an easy up trend to buy into on the 5 minute chart. We could trade this up trend from 9:00AM to 11:00AM CST.
Here is another example of using multi time frames to trade the mini gold (YG) futures contract. This example is similar to the posting on June 21 but this is for June 23, 2010. The first chart below is the 60 minute chart for mini gold (YG). On this chart I have added the MarketWarrior stop and resistance Bollinger Bands. I will use this indicator to determine the trend on the 5 minute chart time frame. I have circled the location where this indicator reversed downward and indicated a new down trend. This is labeled A on the chart below.
Now look at the 5 minute chart which is the second chart below. I have circled the same area where the 60 minute stop and reverse indicator shows a new downtrend. This is also labeled A on the 5 minute chart. Once the trend turned down, there was a nice down move on the 5 minute chart.
This posting shows an update to my BP forecast from May 17, 2010. This forecast uses the MarketWarrior indicator AT_Horoscope Index. The forecast shows the next time window for a Change In Trend (CIT) as the next time the Horoscope Index line moves above the upper boundary which is around July 1, 2010. I have drawn a box around this time window on the chart below. The dots on the price chart below are eclipses. BP has a history of CIT near eclipses. As we work through the time period between these two eclipse in late June and early July, the severe down move in BP stock should end at least temporarily. This stock decline has been very severe because of the oil spill in the Gulf of Mexico and many analysts are describing BP as a possible take over target or the stock sliding to $10. When this down move ends it may not be followed by an up move. We may see BP stock form a sideways move for a period of time.
Here are two charts showing how I use two time frames to trade the mini gold futures contract (YG). The top chart shows the 60 minute chart for mini gold covering the dates June 17 to June 22, 2010. I have added the MarketWarrior stop and reverse Bollinger Bands. I use this indicator to determine the trend direction on the smaller time frame. On this 60 minute chart, I circled the location where the stop and reverse indicator changed to a short position indicating the trend is down. This is also labeled A.
The second chart below shows the 5 minute chart for mini gold (YG) for June 21, 2010. On this chart I have circled the location where the 60 minute chart indicated a short position and down trend. This is again labeled A. Looking at the 5 minute chart, you can see the down trend identified on the 60 minute chart gave us a nice down trend to trade on the 5 minute chart. This down trend lasted from 7:00AM to 2:00PM CST.
The chart below shows a common event when day trading. This event is the same pattern occurring two days in a row. The top chart shows the 5 minute chart for mini gold (YG) for June 17, 2010 and the bottom chart shows June 18, 2010. Notice on these charts, the market made a bottom around 4:00AM. Then the market moved upward along the upper Keltner Band until 6:30AM to 7:00AM. Finally the market broke upward. This pattern is identified on this charts with the letters A, B and C. It is very common for similar patterns to occur two days in a row.
Gold has been making new long-term highs. I have been focusing my day trading on the mini gold YG where there has been good upward movement. The chart below shows the 5 minute chart for the August 2010 contract for June 15, 2010. The indicators that I used to make a trade on this chart are the red Keltner Bands.
On this chart I have labeled a market bottom that occurred above the lower Keltner Bands. When a bottom like this forms above the lower Keltner Band, it is a strong signal the market is going higher. This is where I went long and waited for a rally.
When I am using the Delta method to forecast, I usually will watch for the #1 cycle count which is the most important Delta count. The #1 cycle count is the location where one Delta cycle ends and another Delta cycle begins. This often leads to cycle turning points that are large.
The chart below is the daily interest rate chart for Eurodollar (GE). The red circles across the bottom are the Delta for the daily time frame. The blue squares across the top are the Delta for the weekly time frame. You can see the weekly time frame Delta has reached the #1 count in June. There should be a top in Eurodollars in June and then the market should form three swings over to the #2 in August, 2010. This forecast cycle movement from the weekly delta #1 to #2 is drawn on the chart below.