I’ve been disconnected from the markets over the past week, working on a new project. At times like these, when I don’t have an hour to run different scans and read some blogs to get a feel for what is going on under the market’s hood, I just look at the trendlines and volume.
I noted in the last post that a break above these lines would be bullish. We’ve now broken above both lines, and although we are getting overbought here on declining volume, after a quick pullback, I’m looking for the rally to continue through the holidays. If I had to guess about the next day or so, I’d say to expect a large (1% or more), and then a quick pullback.
If the market continues upward at its current pace, we should end the year out another 3-5% higher.
Let’s take a step back and look at the big picture:
Woodshedder,
Not sure if you remember me but I used to post a lot in Chart Addicts room (oil, ES, and Euro trades). I called live trades and made (still make) about 80 ticks a day or so using basic chart patterns / breakouts that I pretty much learned from CA.
Anyway, I hope this request finds you well. I need a bit of advice. I have a friend who is playing Russian roulette with crude oil. He has what he says is a system where he enters trades at the 5:15 close using the next day pivot as the direction for the trade. Says he is making money… I think he is about to get clown raped and he will not listen.
I use Thinkorswim which serves my purpose and trading style but does nothing for backtesting or system traders. I’ve put some numbers into Excel and I’ve seen enough for myself – the “system” works well in a trending market but it promptly kicks you in the nuts in sideways chop (this using a trade against the pivot and closing the trade at the next day close).
Can you recommend any free or inexpensive backtesting software/services that I could use to try to show him – the guy has kids and I don’t want to see them have to eat their cat.
Thanks Woodshedder!
Hi there Retox. I remember you. Good to hear from you.
I am familiar with Tradestation and Amibroker for backtesting. Both would likely allow you to test your friend’s strategy. However, you’d have to fund a brokerage account at Tradestation, and with Amibroker, it would cost you $199.00 for the software and then more money for the data, unless you get can intraday crude data for free from Yahoo, Google, etc.
Let me know if I can help. Good luck!
Wood,
Just looking at my ATR setting and it’s at 14. But I think you said to set it at 12, and that default was usually 10, but can’t remember your recommendation with any degree of certainty.
What did you say to set it at?
Hello Hawaii, default of most charting programs is 14. I use 10.