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The One More ThingDate: 20/OCT/2022
Traders, Bankers, Commentators and the whole panoply of the trading world are obsessive in their search for the one study, tool or device which is going to enhance their trading and resultant profits. The trading world is awash with tools and studies that profess to determine trend, strength, exit targets and anything else you can think of but I maintain that nothing compares with the Danielcode chart number. I have been using these price levels for the past twenty-eight years and we have presented them in the public domain at www.thedanielcode.com since late 2008.
Trigger Warning: This article uses some maths and a bit of geometry. If you are not into numbers don’t panic as we do all the calculations for you.
In that time we have created over 40,000 Members charts which list the important price levels in the Futures and Forex markets we cover. Members Charts are created every weekend and on Wednesday evening and more often as required. We call these price levels “targets” and target recognition is achieved in a very special way; in a rallying market target recognition is achieved at the bar high or the close. In a pullback target recognition is achieved at the bar low or the close. Additionally that target recognition is only valid if the Bar high/low or close is within 0.1% of the target Not 1% but 0.1% or 1 tenth of 1% so it is very specific. Since the website started in 2008 each of the Members charts is posted on the website on the day they are created and after 30 days those charts are automatically posted to the Chart Archives tab. Take a look at these over 45,000 charts created since 2008 and you will be hard pressed to find a market that has turned anywhere except at its DC numbers. In fact we maintain that markets turn at and only at the DC numbers.
<![if !vml]><![endif]>Theoretically the DC ratios run from zero to infinity but fortunately markets continually select the same five patterns over 92% of the time and it is these patterns which populate our members charts. But there is more; going on a deep dive of the DC Time and Price ratios reveals a plethora of minor cycles which we monitor on a daily basis. We don’t want to crowd out our charts with all the possible levels so we post the primary levels but monitor the additional probabilities for signal opportunities. So we are a bit like the beautiful swan cruising along the placid lake. Above the water all is calm and peaceful. Below the water the picture is reversed as the swan paddles fiercely to push itself along. As a matter of interest black swans are common down under!
These DC numbers are derived from the DC Time ratios which themselves are simply fractals of observable natural ratios that happen in our world every day. We then use these Time ratios as Price ratios as Time and Price are the same thing on different axis. That may surprise you but hold fire until you see how accurately these Time cycles delineate Price. Our assumption about charts is that all available knowledge of market forces is known by the market and must be revealed in its Price action. Let’s start with a detailed analysis of the S&P Emini chart one of the most traded and popular markets of all. The swings immediately either side of an important high or low set the scene for what follows. The charts themselves create all of the strategy that follows.
This is the September 2022 Emini chart which gave us the 01/04/2022 all-time high and the important 03/17/2022 low.
The first retracement after the all-time high gives you the chart low and the closing low 1n June 2022. The close of 06/16 was 3680.00 against the DC target at 3677.00. The variance between market and the relevant DC number is 3 points and the allowable variance at 0.1% for this price level is 3.68 points. Ergo we have target recognition. The next day 06/17/2022 gives us the then low for this pullback at 3639.00 against the DC number at 3638.25 and with a variance from target of just 0.75 we again have target recognition. And from that low we had the “most hated rally” because most of the hedgies missed the turn and the rally ran 689 points or almost 59% (a DC ratio) of the whole move down to 06/2022. Note that the January high came in the March 2022 contract whilst the June low came in the September 2022 contract. We have made no adjustments on rollover.
Let’s turn to the rally which happens on the September 2022 chart. These DC numbers work exactly the same on the index or on a continuous chart provide it is not back adjusted.
Using simply the swing immediately before and immediately after the 03/17 low we have got every important high of the rally either at the high or the close on the relevant bar. When you consider that all turns happen after target recognition you can see what a huge advantage the DC ratios give you.
Let’s move now to the December 2022 ES chart to find the significant vibrations for this last leg down.
The low on Friday 09/30 was 3595.25 lust three tics variance from the blue line at 3596.00 and that was target recognition which setup the Buy signal for the new week. To get you right up to date, below is the current S&P Emini Futures chart. Thursday 10/13/22 lived up to its unlucky date but still managed to tag the DC Blue line at the current low. And there you have it. Even as this market ponders its future direction it does so with strict observance of the DC ratios at its high/low or close:
The prerequisite for any market turn whether small or big is DC target recognition. All markets turn at and only at the Danielcode ratios. By using these amazing support and resistance ratios your trading will be a deal better.
Finally a close above 3577.03 on the index chart $SPX will confirm a key reversal bar on the 6 day chart which completes its current bar on Thursday. A KRB from known DC support is a powerful directional signal. Additionally the index has bottomed for now just a few points below the 50% retracement and that may be sufficient for a while.
We invite you to visit us at www.thedanielcode.com to see what we do. A free trial is available. John Needham is an Australian <![if !vml]><![endif]>Attorney who has been trading Futures and Forex since 1994 and teaching folks to trade since 2004
20 October 2022
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Disclaimer: All the reports, charts and content in the Danielcode web site are for educational purposes only and do not constitute trading advice nor an invitation to buy or sell securities. The views are the personal views of the author only and should be treated as such. Before acting on any of the ideas expressed, the reader should seek professional advice from a licensed broker in the appropriate jurisdiction.
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Risk Disclosure for Genie Results, T.03, T.03+ and TradeProgram: HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT TRADING RESULTS.