It seems to me like the most important part of the process is identifying the important areas of S/R that have the best chances of being highly reactive. Knowing where the inventory may be itching to trade is a good thing.
When I look at AMT's recent charts, what they tell me is the following:
The 924-929 level shows that buying efforts ended in a climax there and sellers were more than willing to take control of order flow and start actively selling.
Who are these people selling? They have to be one of a few groups: Stuck Longs who are waiting desperately to break even, and shorts ready to double down on their bets & "defend" their position, or new shorts.
If you are a stuck long, you'd be waiting for prices to return to your purchase level (or somewhere close enough to it) and hopefully get a fill with a limit sell order of your desire. If you don't get your limit sell order filled and you witness a buying climax, perhaps you think its time to just sell at the market since you are worried the buyers are exhausted at this point.
If you are a short seller fading the area and are trying to get a limit sell fill ordered to start your short position, hopefully you got filled at the price you wanted. If you didn't, and you witness a buying climax/buying exhaustion, you will have to move your limit order to accomodate lower prices, or sell at the market. If you move your limit order down, you now have size chasing the bid on the way down.
Whoever is doing the selling and whatever their motivation, the important part is, that prices must have reached a level where a large group of people are motivated to sell at the market and hammer the bids.
I am sure anyone watching CDV has noticed that prices can reverse when CDV is up down or neutral relative to the last time price touched that pivot. With any number of reasons as to why prices did what it did at that pivot, the important part is anticipating a potential imbalance in supply / demand at that pivot. Prices might reverse with CDV in different conditions... and they all *might* work having meant different reasons as to why prices reversed. (see 800 double top, 3/18 3/19, then look @ 872 top, 4/17. CDV drastically different, but they both reversed prices for a good 40+ pts)
930 SPX was not a "random" location for prices to reverse for 50 pts, and neither was 875. Trade selection matters a lot. Risk management matters a lot. AMT4SWA exemplifies excellent trading skills in both categories. The patience to wait for the proper entry, courage to pull the trigger w/ size on the line, and the proper risk management to avoid disasters and book huge profits on a large runner.
AMT4SWA has a keen sense for market mechanics and I am grateful that he shared his insights with those of us who are duly interested. It made me think harder about why prices reverse where they do, and what must happen in order for them to reverse.
Never did much airframe crack INSP's other than with simple NDT methods.