Iterative Refinement
- Thread starter Spydertrader
- Start date
Sorry for the confusion. My charting software failed meQuote from Spydertrader:
The chart (but not date) posted previously (above) represents Thursday's market action. Just as a double check, does the question quoted above refer to Thursday or Friday?
If Thursday, then begin with 14:35 walking through each bar noting which direction represents dominant and which direction represents non-dominant. Note the bars where dominance changes. Let me know what happens when you arrive at 15:15.
- Spydertrader
.The day in question is Thursday, 7/31/2008.
14:35 eob creates pt3 in the aqua pu traverse, exits the RTL of the black down traverse on increased volume and exits RTL of the red down Channel on increased volume - moving in dominant direction UP
14:40 eob continues higher on increased black volume creating VE - moving in dominant direction UP
14:45 eob IBGS closing down from open on decreasing volume, beginning a retrace in aqua traverse - moving in non-dominant direction DOWN
14:50 eob continues retrace on decreasing volume - moving in non-dominant direction DOWN
14:55 eob continues DOWN but on increased red volume (the volume that did not come from any of the three instances where increasing non-dominant volume appears without signaling change in trend). The retrace becomes a reversal. The dominant direction now is DOWN
15:00 eob creates FBP on increased black volume and since formation does not constitute change, we have a continuation of the dominant direction DOWN
15:05 eob is black on decreasing volume, which is what expected from a retrace in the DOWN trend
15:10 eob is red on increasing volume, confirming the dominant direction DOWN
15:15 eob is black on decreasing volume, which is what is expected when
the dominant direction DOWN
It looks to me that dominance switched from UP to DOWN during 14:55 eob on increasing red volume.
Is this what you were getting at?
If so, what about the actual change signal?
Does the fact that the pennant developed in a non-dominant retrace of the aqua up traverse fits somehow in the equation? Is this what you were referring to in:
http://www.elitetrader.com/vb/showthread.php?s=&postid=2014736#post2014736Quote from Spydertrader:
...
Start by noting how this example of Lateral Movement differs from all others on the day.
....... Subtle differences .........
- Spydertrader
You sure?
- Spydertrader
I am trying to figure out if this is where the answer may be:
15:10 eob made a lower low than the previous bar. It closed at the same price as opened, and opened at the same price as the close of the previous bar. But it closed lower that the previous bar open.
On the other hand one can make a case that Jokari Window can be applied here if one considers the portion of the 15:10 eob where the price went from its low to its close as moving on increased black volume.
Aha! You now have the ability to 'see' a change in dominance which can occur within a Lateral. This might make it easier yet for you. Mentally, color the ES 15:10 [close of] bar as black. What does the next bar say now?
- Spydertrader