Geometric Pattern Day Trading Symmetry
In my 8/24/15 Trading Markets commentary I said that the SPX made a bull market cycle high at 2134.72, with a monthly low of 2067.93, and a monthly close below that low would trigger the highly significant 7 point RST pattern that dates back to the 1998 bear market low
The high SPX monthly close in the 75 month bull cycle is 2107, and that is very significant long term geometric market symmetry in that the 1.618 fib extension of the 2007 -57% SPX bear market panic from 1556 to 667 is 2105. The triggers I highlighted to exit or significantly cut back equity exposure have been met.
In this commentary I have outlined some of the daily common geometric symmetry that enables day traders to be successful in the markets regardless of the delusional and manipulative Fed, other Central Banks, and the HFT`s.
It doesn’t matter whether you are trading futures, stocks, bonds, currencies or commodities, seeing that the highest probability trading opportunities occur because markets trade in a geometric fashion and natural order that can be quantified in all time frames.
The current geometric pattern sequence day trading example is the 5 minute time frame from Monday 9/21/15, and that is my favorite day trading period. However, I do trade other time periods from time to time
The SPX was -1.6% the previous Fri so the central bankers jumped in, futures took off, and the SPX had a big gap up opening Mon as the index got extended to the +1.5 VB and a 1979.64 high on the 10:35AM bar, which was also a .38RT to the previous FOMC 2020.86 high, so our trading game was put in motion
The first entry option was to sell the +1.5VB and .38RT level, which was obviously a high probability entry, while the second opportunity was to sell the 123 trend entry below 1976.50. Net-Net, the index declined -20.8 pts to a 1955.80 low which was a great start to the day as astute geometric pattern traders caught most of that action
The SPX then formed an AB=CD pattern with significant symmetry as the AB leg was 9 bars [11.6 points], CD leg 9 bars [10.7 points], and the BC leg 6 bars [7.1 points]
The AB leg 1967.46 high was a .50RT to the 1979.64 high and the BC leg pullback to 1960.33 was a .618RT to the 1955.80 low. The CD 1971.66 high was a 1.618 fib extension of the BC leg and also a .67RT to the 1979.64 high and relative to the .707 fib number. The 1971.66 high was also a RT to the 480EMA on the 5 min chart which is the same as the 20EMA on a 60 min chart, so that is also good symmetry. The entry at the D point declined -9.4 points to a 1962.29 low before the mark up into the 1966.97 close so a good day was had by all.
Geometric pattern symmetry was covered in detail with my 775 page power point manual, “Trading with the Generals”, which I did at Trading Markets. I will cover more on the topic in future commentaries. My geometric trading method is an easy to understand approach to markets that identifies high- probability trading opportunities with positive mathematical expectations, excellent risk reward, and minimum risk exposure which you can control
Kevin Haggerty