Henry Ford's MarketWatch LIVE!

3:39 PM
UPDATEReally wanted to see some conviction one way or the other this afternoon, but running out of time and we are coming back down to support...MOC orders will be sent from floor traders in about 3 minutes, so that will more or less set the tone for the close..
:: Henry Ford ::

3:28 PM
UPDATE

Here is a snapshot of the SP500 and the retracement on the 5 minute chart off of the highs of the last hour. Notice that we came back dow to the 32% level and bounced off and are heading back up to the highs...We will have a day or two on fibonaccis, but suffice it to say now that they can be uncanny at picking out support/resistance and hesitation prices.....and invented in the 1600's before we even knew we needed them.
:: Henry Ford ::

3:09 PM
UPDATEBull Flag didn't mature, so we will save that pattern for another day.Looks like we bight go back down and test 7800 DOW
:: Henry Ford ::

2:41 PM
UPDATEReversal once again going into the last hour...Liable to be volatile...Too soon to tel, but looks like a possible Bullish Flag in formation...if it developes I will give you the stats and status....One of my favorite patterns
:: Henry Ford ::

2:11 PM
UPDATENext key time is 2:30...I might as well post the key times chart...
:: Henry Ford ::

2:02 PM
UPDATEPivotal time period here...so far so good....DOW positive and 330 points off the lows. That triangle pattern completed and we are now hugging an upward trend line. We had a "V" bottom recovery from this morning's selloff and now are bouncing on the support line(support is the bottom of that triangle we dropped through) ...too soon to say we won't selloff again, but if we can get some upside momentum here by the end of the day we would be in great shape.
:: Henry Ford ::

1:57 PM
UPDATE Curbs are off and we have now recoverd 270 points off of the DOW lows on good volume...if we can keep this up we will have fulfilled requirements. Just broke back above 8000.
:: Henry Ford ::

1:19 PM
CIRCUIT BREAKERS & CURBS
RESTRICTION----------------------------------TRIGGERED BY
NYSE collar (Rule 80A) -------------------DJIA moves 180 points
CME restriction 1--------------------------S&P500 futures contract moves 2.5%
CME restriction 2--------------------------S&P500 futures contract moves 5%
CME restriction 3--------------------------S&P500 futures contract moves 10%

NYSE circuit breaker nr. 1-------------DJIA moves 10%
NYSE circuit breaker nr. 2-------------DJIA moves 20%
NYSE Circuit breaker nr. 3-------------DJIA moves 30%

NYSE Collar (Rule 80A): Restrictions on program trading
This restriction is triggered if the Dow Jones Industrial Average (DJIA) moves up or down by 180 points (for 2Q02). If this trigger occurs, program trading curbs are put in effect. Essentially a key computer is turned off, so program trading must be done "by hand." This rule is also known as the "uptick downtick rule" (more formally: index arbitrage tick test) because it restricts sells to upticks and buys to downticks. In other words, when the market is down (last tick was down), sell orders can't be executed at lower prices. In an up market (last tick was up), buy orders can't be executed for higher prices. This collar is removed when the DJIA retraces its gain or loss to within 100 points of the previous close.

CME Restrictions
Trading in the S&P500 futures contract is halted just for a few minutes if the prices moves 2.5%, 5%, or 10% from the previous close. Because restrictions on the NYSE effectively shut down trading in this futures contract, there is little need for additional restrictions on the CME.

NYSE Circuit Breakers
These restrictions are also known as "Rule 80B." The first version of this rule, adopted in 1988, set triggers at 250 DJIA points and 400 DJIA points. These restrictions are updated quarterly to reflect the heights to which the Dow Jones Industrial Average has climbed.

10% decline (1050 points for 1Q01)
The first circuit breaker is triggered if the DJIA declines by approximately 10%. The restrictions that are put into place -- if any -- depend on the time of day when the circuit breaker is triggered. If the trigger occurs before 2pm Eastern time, trading is halted for 1 hour. If the trigger occurs between 2 and 2:30pm Eastern, trading is halted for 30 minutes. If the trigger occurs after 2:30pm Eastern time, no restrictions are put into place. (This restriction was first used during the afternoon of 27 Oct 97.) If the Dow Jones rallies 10%, there is no restriction, because program buying and the accompany rally is always perceived as "good."

20% decline (2150 DJIA points for 1Q01)
The second circuit breaker is triggered if the DJIA declines by approximately 20%. The restrictions that are put into place again depend on the time of day when the circuit breaker is triggered. If the trigger occurs before 1pm Eastern time, trading is halted for 2 hours. If the trigger occurs between 1 and 2pm Eastern, trading is halted for 1 hour. If the trigger occurs after 2pm Eastern time, the NYSE ends trading for the day. There is no trading halt if it rallies 20%, as that would be perceived as "very very good."

30% decline (3200 DJIA points for 1Q01)
The third circuit breaker is triggered if the DJIA declines by approximately 30%. The restriction is very simple: the NYSE closes early that day. There is no trading halt if it rallies 30%, as that would be perceived as "the best thing that ever happened in the history of the world."
The circuit breakers cut off the automated program trading initiated by the big brokerage houses. The big boys have their computers directly connected to the trading floor on the stock exchanges, and hence can program their computers to place direct huge buy/sell orders that are executed in a blink. This automated connection allows them to short-cut the individual investors who must go thru the brokers and the specialists on the stock exchange.
:: Henry Ford ::

1:04 PM
UPDATEGonna be a huge Volume day by the looks of things, which is what we want to see today for capitulation.
:: Henry Ford ::

12:48 PM
ANOTHER DESCENDING TRIANGLE YOU MIGHT REMEMBERHere is a classic example of this continuation pattern. Notice that as the triangle narrows before the break the volume dries up...this is like the winding of a clock spring and usually results in a fairly explosive move. In about 60% of the cases a you will see a claw back about 50% of the drop from the lower line before resuming the downtrend. This often gives an opportunity for reclaiming some of your drawdown if you got caught in the break.

:: Henry Ford ::

12:17 PM
FIRST CHART PATTERN-A target of opportunityI meant to start with some bottoming patterns, but the triangle this morning looked like a classic, so decided to go for the target of opportunity. You will notice that this morning I was looking at a 5 minute chart. Most of the time I show hourly charts. In actual fact, the paterns we look at are applicable to all time frames from minute charts to yearly charts. I tend to ignore anything under 5 minutes as tending to be too "noisy". Generally I start withh weekly then go to daily then hourly. If a buy or sell is imminent as indicated by these charts I will look at a 5 minute to see if I can time the entry in the direction of the trend I have been watching.
:: Henry Ford ::

12:12 PM
46 CLASSIC CHART PATTERNS -A TUTORIAL-OVERVIEW
We will be reviewing 46 classic chart patterns in this little learning series. For each chart pattern we observe we will look at the following:
1. Identification
2. Failure Rate
3.Average Rise or Decline
We will also tackle the basics of Fibonacci projections and retracements which allow us to establish target support and resistance as well as timeline projections.
I will attempt to keep it simple, compiling information from many varied resources. If you have questions or comments you can send me email direct to traderx@imfnet.com.

:: Henry Ford ::

11:52 AM
UPDATE

Notice the flat bottom of the triangle. This pattern when it occurs in a downtrend has a success rate of 55%. Once the bottom has been exceeded by 5% its success rate increases to 96%. The average decline after this break is 19% with most likely decline occurring between 10% and 20% as measured from the apex. About 64% of the time the pattern will return to ttest the breakout point. This same pattern, encountered in an uptrend with the triangle sides reversed has an initial success rate of 68% which increases to 98% when price exceeds the upper flat by 5% of triangle max depth...Typically triangle patterns resolve themselves 70-80% of point where the lines would merge...
:: Henry Ford ::

11:15 AM
UPDATELooks like the short term won out...will put up a chart momentarily...sorry had trouble with my screen capture program...marking it up now.

:: Henry Ford ::

11:04 AM
UPDATEBit of a conflict here...Shortere term charts look like a Descending triangle forming which is a bearish negative, while time cycles on the 13hour RSI/MACD look like they are in the time frame for a rally to ensue which could hold sway for a couple of days....one of them will win....
:: Henry Ford ::

10:13 AM
UPDATEMondays after expirations usually sees portfolio balancing and hedging, so expect volatility here...Way too early to call this day either way. VIX (CBOE Volatility Index) went over 45 this morning..
:: Henry Ford ::

9:49 AM
MARKET GAINS ON OPENAt this point we are seeing 85% of Industries positive on the open. NAZ leads with 88% positive stocks and DOW has 63% pos.
Industry leaders...Computer Storage/Semis/Plastic/Rubber/Money Cntr Banks/Internet svcs
NAZ leaders...ICOS/CEFT/PDLI/YHOO/SYMC/NXTL/HGSI/JDSU/ITWO/SEPR/RFMD
DOW leaders...U/C/JNJ/HON/EIX/INTC/YELL/FDX/MCD/BNI
:: Henry Ford ::

9:41 AM
UPDATEOrderly open. S&P only left a 1.5 point gap. Would have much rather seen an early capitulation selloff but early in the day. We will see what happens once the gaps get closed. Once again NASDAQ Tech is leading with QQQ and NDX both up on the day.
:: Henry Ford ::

9:16 AM
GOOD MORNINGGap down opening.....Trading is relatively stable in pre-market action with the same pattern of tech outperforming on a relative basis continuing. European markets are moderately weaker Nothing on the economic calendar till the 25th...This week SHOULD be dominated by earnings.

If things don't get too crazy we will start our chart pattern class during the lunchour doldrums....46 patterns plus Fibonacci retracements and price projections for support and resistance.
:: Henry Ford ::

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