Midas Analysis

Trading and Technical Analysis with MIDAS

Dynamic Support for the Best Day Since 2009

Headlines are calling today the “Best Day Since 2009″, as the Dow shot up 4.2%.  How could MIDAS help today?  Well, to start, it provides a hierarchy of support levels that track the pullbacks very closely.

 

The chart above shows the extended rally day for YM (Dow Futures).  The YM rally started well ahead of regular trading hours, so the chart shows the night before and full day using 5 min bars.  We launch MIDAS S curves from the typical places (swing lows), and watch how price repeatedly bounces against it, before moving up to the next level.  The chart shows six S curves, and each one shows relevant price action.

 

Only once does price break through an S curve — the very top one around noon.  Even though the top S curve fails, the next S curve immediately catches it, and price continues its ascent until the market closes.

 

Drilling down a bit to a shorter time frame, MIDAS can reveal additional detail.  On the next chart we have YM for the last 3 hours of the day with 1 min bars.   Most of the curves here are standard S/R levels, launched from typical locations.

 

After price has moved up substantially, it makes a swing high (shown at the beginning of the chart).   We likely have some profit taking, with price consolidating lower.  From here, a MIDAS R curve serves as resistance against the next 5 pullbacks for the next hour and a half.

 

Price finally finds  a bottom around noon.  A MIDAS S curve (blue) captures the next pullback, which bounces upward, leading to a new S curve (pink).  As price slices up through the primary resistance curve covered above (in red), we have a good signal price will continue its ascent  (interaction highlighted with box around 12:10).  From here, price consolidates a bit, pulls back to the last S curve, bounces again.  So, we launch another S curve (sky blue), which price returns to at 12:50 to retest.  And again, we launch another S curve (brown), which price returns to at 12:55.   It might be a bit repetitive, but we’ve just seen four levels of MIDAS support curves, serving as powerful inflection points which precisely capture the reversals.

 

Category: Uncategorized