Support Resource Center

Chart 38

JFC Entry Point Indicator

Chart 38 above adds the JFC Market Direction Indicator to Chart 37.

For a detailed explanation of the use of these two tools along with the JFC Cluster Indicator and JFC Directional Day Filter Indicator please go to Chart 37.

Chart 38 A

Chart 38 A displays the JFC Entry Point Indicator and the JFC Market Direction Indicator. Market support is marked by small red dots beneath the price bars while market resistance is depicted by small blue dots above the price bars.

The JFC Market Direction is indicating a downtrend for the day as noted by the red histogram.


Chart 38 B

During the video presentation I mentioned that on the above chart of CMGI there were several sell signals which would be designated by the JFC Indicator Package.  For a change of pace and to demonstrate the use of some of the other tools in the box I have used the JFC Reversal and JFC Exhaustion 2 indicators on this chart to identify the various trading windows on this market at this time.

Note that the JFC Market Direction Indicator is telling us to only consider the short side of the market today.

For review, note that the JFC Reversal Indicator will give an indication that a current uptrend is exhibiting signs of exhaustion when the small magenta squares begin to form above the price bars. When the magenta squares cease plotting  the exhaustion phase is complete and a change in the market trend from up to down is anticipated.

Also for review, recall that the small white dot presented by the JFC Exhaustion 2 indicator shows up as an aid to the interpretation of the  JFC Exhaustion Indicator. The white dot confirms that the rapidly moving red line associated with JFC Exhaustion has turned down on a closing basis and, thus, a change in trend from up to down can be expected.

The initial short entry, designated S1, came early in the day following a JFC Exhaustion 2 Sell signal.

The sell signal at S2 was entered at 82.50 on the sell stop placed at the support level by the JFC Entry Point Indicator. A protective buy stop of at least $1.50 would have been required to maintain this position.

The next 2 selling points, marked by S3 and S4,  emerged at a higher level, slightly above the 83.00 level. This point could be used to either add to an existing short position or initiate a new short position.

Between 12:30 and 1:30 Central Time there were two additional selling opportunities which were set up and activated by the same indicator combination responsible for the positions established earlier in the day. These new short positions are designated R5 and R6.