timwest

SPY WEEKLY BAR UPTREND ANALYSIS

BATS:SPY   SPDR S&P 500 ETF
913 36 6
I am updating a chart I published here in the first quarter that outlined a price and time projection for a top in the then heady uptrend. It is a method of analysis that looks at frequency of time at a price. The more time at a given price means that there is more "value" at that price. The "conservative" projection lines up with the market nicely. I will outline in a subsequent chart once the market moves above the current "11-week" zone which you can see is straddling the most frequent price in this whole rally from the October low.

This is a method of charting that I have done by hand since 1988 and if this brief description doesn't explain what I'm saying clearly, that is because I need to spend more time clarifying.

What I find fascinating with this method is that it does help predict time and price. It also helps predict sideways and trending periods. This is the most dynamic and useful method of charting that I have ever found and I studied everything I could get my hands on from 1986 to 2000. This has elements of all of the other methods, but this suits my personality. You can do this method on any time frame that suits you.

Note: I began a chart by picking the lowest price (for an uptrend) or the highest price (for a downtrend). You know it is the lowest price when there are at least 4 bars after the lowest price AND the current price is above the lowest high. The next sign of a strong uptrend is when the current bar is above the most frequent price.

More to follow...
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SS
4 years ago
Valuable information, thanks for sharing.
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Tim, thank you very much for this market profile analysis. Do you keep in mind fundamental factors when using this method of charting? Isn't Europe a major reason to stay out of the long positions? It would be interesting to see the subsequent chart.
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timwest PRO charttrader
4 years ago
chart trader, If I had my choice, I would chart bars and colorize them based on the news that day/week/month. We could all vote, if necessary, about whether the news was positive or negative each day, then paint the bar on the chart based on the outcome of the poll. Red for negative news days and Green for positive news days. The chart would come alive and we could see critical levels much more easily. So, my answer to your question is: Yes. I love to track news and see how the market is impacting the market. This is how to identify the lowest risk, highest reward trades. If you go to DIA and see my overall market comments, then you can see that I do look at macro factors when analyzing trades. I also look at micro factors in individual stocks. The more news, the better, in my opinion. Coupling news and technicals is the Holy Grail of trading. Technicals are wonderful enough of the time, but so often there are so many trades that fail with just technical considerations. Thanks for asking. Cheers. Tim
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charttrader PRO timwest
4 years ago
Thanks. This makes a perfect sense. I never understood how is it possible to make decisions based on technical indicators only.
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charttrader PRO timwest
4 years ago
BTW: What about NMIKE's comment here:
SPY-072712


"First of all, forget fundamentals.I lost a lot of money in the past using fundamentals.Fundamentals are already INCLUDED in price action on a chart.There has been a lot fundamental negativity lately but the SPY chart keeps going UP. This chart is too complex for my eyes,no comment."
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timwest PRO charttrader
4 years ago
If you keep track of fundamentals, you get a much better perspective, in my opinion. Because you lost money in the past does not mean that there isn't something to learn from the losses. There are always profits and losses from random chance and so there is also from fundamentals and from technicals. Anything can generate a loss. Anything can generate a profit. What everyone needs to do is to figure out what makes sense to them and then follow your method. This is a great site for everyone to share what makes sense to them and by sharing your thoughts, you can get insightful questions to either get you to consider other factors or to clarify your thinking. Clear thinking and a disciplined method can help you avoid the common mistakes that lead to big losses over time (no risk control and overtrading). For me, fundamentals are essential to help me define the marketplace. I love a situation where the fundamentals seem terrible, the market then stops going down and doesn't make new lows for weeks and then the market lifts above the "most frequent price" over that time frame since the low. That is a great setup for a long position. Who is left to sell? Short sellers may be short and will cover on a rally and then short term traders who don't look at news will buy on the technical breakout. So, typically in that environment, you would exit on short-term rallies because there is not a sustainable uptrend likely in that environment. Adapting the trading style to adjust for the environment is the best way I know to trade successfully.
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timwest PRO
4 years ago
There is a lot of support starting at the lowest weekly high at 133 and change.
The market is still churning because we are again sitting on (overlapping) the most frequent weekly range. With earnings season in full swing and Apple reporting next - hopefully there will be a new signal soon. Tim
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timwest PRO timwest
4 years ago
The market held the 133+ support level I mentioned 2 days ago. I just think the market ran out of sellers down there and also found a level where buyers were lined up ready to buy. There are hundreds of billions of dollars in the "buyback" pool, but after 3:30pm corporations can't be in the market buying back stock. So, any weakness after 3:30pm you can leave alone and wait until 4pm to buy (on a micro level). I do like when the technicals are helpful. Despite the positive news overseas about defending the Eurocurrency overcoming the negative news yesterday about weak housing starts and Geithner's words. The market is still chopping around.
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timwest PRO timwest
4 years ago
With a strong close this week, all we need to do next week is just hold onto these gains and we will be set up for more follow-through price gains. Who is left to sell? The sellers could be from people holding expensive mutual funds but then they will likely just re-invest in low-cost ETF's to save hundreds of billions of dollars over the next 20 years. This sell-buy has been a major trend for the many years. How much money is left in expensive mutual funds???
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timwest PRO timwest
4 years ago
If you think about all of the embedded capital gains in expensive mutual funds (likely a trillion dollars)... would you take the profit, pay the taxes, and reinvest in lower-cost funds? Or would you just sit on the expensive funds and hope they do better? (Note: I don't have this dilemma but don't you wonder why there is still money left in mutual funds that charge more than 0.2% a year???
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charttrader PRO timwest
4 years ago
Brilliant micro!
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nmike MOD charttrader
4 years ago
Totally agree.
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timwest PRO
4 years ago
I'm publishing the updated to this chart - it will up as soon as I can get it to publish.
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charttrader PRO timwest
4 years ago
Fantastic news, thanks Tim.
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charttrader PRO timwest
4 years ago
SPY 13 WEEK PRICE FORECAST
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charttrader PRO charttrader
4 years ago
SPY 13 WEEK PRICE FORECAST
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