Ghost of If You Can Draw A Straight Line

[k p]

There was some discussion today about the synergy between the SLA and AMT and when to focus on one or the other or both. The chart below I hope illustrates how they work together.

Curious to ask if these upper and lowers levels outlined by AMT were in part derived from this chart posted earlier.

http://www.elitetrader.com/vb/attachment.php?attachmentid=143837&d=1394026749

The levels are close, but the 3722 for example doesn't exactly match up with 3726 as shown, although the lower level of 3702 roughly matches up more precisely with the 3700 presented here. The levels of course don't have to be exact to the point, but I'm curious if this is the chart used to arrive at these levels.

 

[niko]

I didn't. The AMT notation refers to 1700/1698. But then there's that higher low.

Hehe, I thougth 1700 was a typo. Sorry.

 

[dbphoenix]

Curious to ask if these upper and lowers levels outlined by AMT were in part derived from this chart posted earlier.

http://www.elitetrader.com/vb/attachment.php?attachmentid=143837&d=1394026749

The levels are close, but the 3722 for example doesn't exactly match up with 3726 as shown, although the lower level of 3702 roughly matches up more precisely with the 3700 presented here. The levels of course don't have to be exact to the point, but I'm curious if this is the chart used to arrive at these levels.

Indirectly. Price rose past this then sank back into it on the 6th, then made a higher high before dropping to 3685 and rising back into this level. So clearly it was or has been important.

 

[k p]

Indirectly. Price rose past this then sank back into it on the 6th, then made a higher high before dropping to 3685 and rising back into this level. So clearly it was or has been important.

Yes, I follow what you are saying. Here is my hourly chart as I have drawn, but of course the channel and these levels are drawn in as a result of your analysis and example.

Sadly, if I was drawing this, I would be inclined to draw far too many lines, probably at every swing high or low, but maybe keeping only those where price reacts to the level at least twice as opposed to just going through it. I clearly need to study hourly charts much more thoroughly.

 

[Roffe]

Sadly, if I was drawing this, I would be inclined to draw far too many lines, probably at every swing high or low, but maybe keeping only those where price reacts to the level at least twice as opposed to just going through it. I clearly need to study hourly charts much more thoroughly.

The important levels will usually show up on the larger bar intervals as well (this is what sort of makes them important, right?). This level was a former weekly high.

 

[dbphoenix]

The ES has reached a downtrendline drawn from the 7th. It could rally from here all the way back to 80. That's the nature of auction markets. But the DTL is a gauge of demand, and demand is weak. Therefore price could just as easily fall to the mean of its trend channel, currently around 1825. Since it was at 1735 only a month ago, this is not beyond the realm of possibility.

The NQ, on the other hand, is breaking through the same DTL from the same date. The mean of its trend channel is 3640.

 

[Roffe]

The ES has reached a downtrendline drawn from the 7th. It could rally from here all the way back to 80. That's the nature of auction markets. But the DTL is a gauge of demand, and demand is weak. Therefore price could just as easily fall to the mean of its trend channel, currently around 1825. Since it was at 1735 only a month ago, this is not beyond the realm of possibility.

The NQ, on the other hand, is breaking through the same DTL from the same date. The mean of its trend channel is 3640.

ES is also testing, from above, the midpoint of last week's rally. NQ did this yesterday and has during the European session so far rejected it from below.

 

[niko]

Db, regarding today, after the hinge was formed you mentioned that you saw an entry at 74 and that anything below 75 was fair game. Was it because all of those things were occurring below the apex of the hinge?

 

[dbphoenix]

Db, regarding today, after the hinge was formed you mentioned that you saw an entry at 74 and that anything below 75 was fair game. Was it because all of those things were occurring below the apex of the hinge?

This was a case where you just had to see it. The swings were so incredibly wide and even violent that it seemed highly unlikely that the hinge would be able to contain the discovery. Traders had no interest whatsoever in finding equilibrium, so an escape from the hinge was likely to take place long before the apex was reached and it would likely not turn back. Therefore using the RtTk was more likely to provide a good entry than standing aside politely and waiting for the bus to come to a complete stop and open its doors and wait for one to ascend the steps and pay his fare and find a nice window seat before it got back into gear.

 

[niko]

This was a case where you just had to see it. The swings were so incredibly wide and even violent that it seemed highly unlikely that the hinge would be able to contain the discovery. Traders had no interest whatsoever in finding equilibrium, so an escape from the hinge was likely to take place long before the apex was reached and it would likely not turn back. Therefore using the RtTk was more likely to provide a good entry than standing aside politely and waiting for the bus to come to a complete stop and open its doors and wait for one to ascend the steps and pay his fare and find a nice window seat before it got back into gear.

Well, still a long trip in my bus to get to that station, but thanks will keep this one for the future.