Ghost of If You Can Draw A Straight Line

[dbphoenix]

Re the chart two up, there were lines drawn earlier that had nothing to do with Friday's action, so they were left off. However, if you can ignore everything that happened after Sunday night, you'll see that there is a channel there which also acts as "resistance" to the bounce off the lower limit of the daily trend channel on what would be the following Wednesday.

And while we're at it, if you back up a few days, there was another channel formed after that first downdraft that was useful at the time, but which again was of no particular significance by this past Friday:

This was all part of a big arrow pointing to a test of the lower limit of the daily trend channel.

 

[bmwhendrix]

Good Morning DB.

This is my "hourly" chart that I keep on 10,000volume. It seems to make PA a bit smoother for me. Is there something I am missing by not using a time based chart?

 

[regiom]

Thanks db, much appreciated.

Why so tight? Opening night jitters?

I guess so, I'm uncomfortable with price going against me so will have to learn to give it some breathing room.

As for the reaction to Friday's report, this is partly a prep issue, a confidence issue, and a probability issue. Given that we had just tested an important trend channel twice, and given the rally the next day, and given the hinge that was formed toward the end of that day, and given the rally off that the next morning premkt, the probabilities favored just holding on and waiting for a kneejerk recoil, particularly since price would have to fall much more than this to put the long in jeopardy.

Noted. Price plunged so quickly and effortlessly through my DL, I felt covering was the prudent option. Your use of channels is interesting, I think the difficulty I have with these is firstly, the chart clutter and secondly, that they can sometimes distract me from what price is actually doing, as opposed to what it might be expected to do. I'll have to work on that.

Looks to me like you've got the right idea. Just don't forget context. And AMT.

Thanks. Where might I find more information on AMT? I've done a google search but failed to find much of a practical nature. Does it purport to show that price moves in either trending or ranging states, the extent of which can be anticipated?

As always, thank you for sharing.

 

[dbphoenix]

Your use of channels is interesting, I think the difficulty I have with these is firstly, the chart clutter and secondly, that they can sometimes distract me from what price is actually doing, as opposed to what it might be expected to do. I'll have to work on that.



Thanks. Where might I find more information on AMT? I've done a google search but failed to find much of a practical nature. Does it purport to show that price moves in either trending or ranging states, the extent of which can be anticipated?.

As to the clutter, this is always an apparent problem with hindsight charts because of their culminating nature. But in real time, most of those lines wouldn't be there. As time goes forward, you pick up new information and discard what is no longer useful. And as you become comfortable with this, you may not even bother to draw the lines. You'll see the trend and any channels that form and there'll be no need to plot anything that might distract. I never draw any of these lines anymore.

As to AMT, see post 160.

 

[dbphoenix]

Good Morning DB.

This is my "hourly" chart that I keep on 10,000volume. It seems to make PA a bit smoother for me. Is there something I am missing by not using a time based chart?

That's something you'll have to determine for yourself. I played with CVBs for a while, but I found that knowing how long price took to get from one place to another was important to me in terms of assessing behavior. And as the overnite has become more important over the years, having it all condensed is not a plus. I'm puzzled by those who don't bother to chart it at all.

You'll find out soon enough as you work your way forward.

 

[regiom]

As to AMT, see post 160.

Thanks db, apologies for not noticing this before.

That's my evening "entertainment" sorted...

 

[regiom]

Price back within trading channel traced back to Thursdays low. Took the short after DT and RET, probably late but I was not up and about earlier. Clearly I'm shorting into a longer term uptrend so am not convinced by trade - maybe I'm following price too closely but the trade is taken.

Looking for a test of the channels lower extreme, where it might be expected to rebound. We'll see. Price has broken micro SL but giving the trade a little breathing room, since there's no great sign of strength. If it moves decisively above the previous high, I'm out. Price will let me know.

(Out 3563)

 

[regiom]

Okay, took the next long after the RET. Added a midpoint line to the channel, which price has been glued to all day. DL has been breached but not decisively, so will leave overnight with breakeven stop.

 

[dbphoenix]

Given the angle of the ascent and the fact that trend channels are diagonal (and their upper limits increase day by day) and so on, the upper limit of the long-term trend channel and the level of the last swing high are beginning to coincide. This provides an upside of 3610 to 3630, which is a bit lower than what I had previously offered at 3660.

Of course when plotting a three-year trendline, even an error of a couple of degrees will amount to more than a few points. But this can serve as a ballpark range. What matters more is the state of supply v demand as we near these levels.

I've lowered the upside on the ES to 1885.

But who knows?

 

[regiom]

Update. Price at an interesting point. I'm still in, just, price having poked through the newly drawn demand line. The proximity of the lower channel line (and my limited knowledge of AMT) is keeping me in, so looking for a move up from here - but it might be that price is turning over? We'll see.