Aaron Armstrong, March 10, 2008

Below is an excerpt from the Trading Diary for Monday, March 10, 2008.

OK, I don't have a whole lot to say this evening but I want to focus on just a couple of key things here.

1. If prices blow right on by a daily and synchronized intraday time frame SPY TD Combo buy Countdown, TD Sequential buy Countdowns and the piling up of those same market structures on other markets and time frames then we are looking at one of those historic events whereby nothing matters except the need to washout the herds from their longs. Also known as one of those fat-tail price action events on the distribution curve of returns, something that technically shouldn't happen but does more often than many would like to think.

And this is why it's one thing to use TD Combo or TD Sequential to interpret market structures and time frames, set expectations and frame the market, and another thing entirely to use it strictly as a buy/sell signal generator. Now you guys really know what I am talking about when I say it's the best tool for interpreting market structures and time frames and it's secondary use is as a trading signal generator. You still get to use market intuition, experience and your trading skills.

Right now we have had about a week of failures to respond bullishly to prior TD Sequential exhaustion structures. This is why I have not went long in any real why and it's why I am still not long the market.

2. Unless and until we can see prices respond bullish to something like a daily TD Combo buy Countdown 13 then I am not likely to put on any long exposure in the broad market. Remember, it really is all in the reaction and that's kept my capital high and dry and waiting for real opportunities. I am willing to buy SPY if prices can record a close that is greater than the prior day's close, that's easy enough for those of you that don't follow the market as closely as I do during the day.

In this case I don't see any big advantage to trying to time trades on intraday time frames.

So it's up to the reactions and it is also up to you and I to keep ourselves out of deadly dangerous trouble, because I know there are traders that have been buying this market for days and are not giving up because if they had given up we wouldn't find ourselves in this steady grind lower.

Oh, and it's still been great to use the day structure bias as indicated by the opening range and ACD "A" levels to employ a short the bounces strategy on a near daily basis. That's what I did today, that's what I did Friday and it's what I did nearly every day last week and the day trading profits from that in the futures are starting to add up and it's just about all I feel comfortable doing right now until something changes.

Related Articles

·  TD Buy Countdowns Give Us Our Expectations But What Happens If It's The Worst Case and Not the Base Case and Why the Nasdaq Has Went From First to Worst ·  Excerpt From The Trading Diary: Daily TD Sequential Buy Countdowns Recording and Approaching But Lesser Time Frames Introduce Areas of Risk