Iterative Refinement

[cnms2]

YM shows a Lateral Formation too; it also shows decreasing black volume with price taping up.

As long as the ES doesn't BO of its Lateral Formation we have acces to YM. Isn't it?

12:28 Lateral Formation FBO (on increasing black volume) => CONTINUATION

12:30 tape RTL BO down on increased red volume, that doesn't get out of the lateral formation => CONTINUATION

12:32 pennant (decreasing black volume) => CONTINUATION

12:34 Lateral Formation BO up on increasing black volume (B2B) => CHANGE => reverse LONG

Quote from Spydertrader:

Yes! You sure do! Now, for the real kicker ...

You also know that the ES has given permission for you to go over and watch the YM in order to anticipate the break out. So, go look. What did the YM tell you?

- Spydertrader

 

[ehorn]

Quote from Avi 8:

Well I hope this doesn't ruin the party...

This is a consequence of not knowing the sequences. When one knows the possible sequences for the context, one ends up 'waiting' for change.

In other words, one knows how, when, and where 'change' will appear.....

Not at all Avi. Thanks for sharing your insights. I will study and focus on this. Though, I will say there is a difference between knowing and applying what one knows - I see this everyday in all manner of life

 

[TIKITRADER]

 

[Spydertrader]

Quote from cnms2:

As long as the ES doesn't BO of its Lateral Formation we have acces to YM. Isn't it?

Correct. Now, time to check our annotations to make sure we have properly annotated all charts. The YM bar labelled 'FBO' - isn't it also an Outside Bar? Do we not see increasing red on this bar? Do we not 'see' a resumption of the dominant direction on the ES at this same time? What happens next on the ES?

- Spydertrader

 

[Padawan]

Quote from Spydertrader:

Correct. Now, time to check our annotations to make sure we have properly annotated all charts. The YM bar labelled 'FBO' - isn't it also an Outside Bar? Do we not see increasing red on this bar? Do we not 'see' a resumption of the dominant direction on the ES at this same time? What happens next on the ES?

- Spydertrader

AHA! Then the increasing black volume YM bar that breaks out of the lateral is our signal to get back long.

 

[ehorn]

Quote from Spydertrader:

Correct. Now, time to check our annotations to make sure we have properly annotated all charts. The YM bar labelled 'FBO' - isn't it also an Outside Bar? Do we not see increasing red on this bar? Do we not 'see' a resumption of the dominant direction on the ES at this same time? What happens next on the ES?

- Spydertrader

Dam Spyder, you dont miss a thing! I totally missed that OB and I was NOT annotating in RT. Add that to the list

 

[Spydertrader]

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1804513>

Edit: Time on above charts indicates bar close and not Bar open

 

[ehorn]

Yep, The YM held the Lateral nicely there!

 

[Spydertrader]

Quote from ehorn:

Yep, The YM held the Lateral nicely there!

When what must come next doesn't, expect the trend to change.

- Spydertrader

 

[guavaman]

Sometimes it is difficult to review a static chart and recall my thoughts and perceptions. Such is the case with the time period we are discussing this Saturday night (yes it is indeed Saturday night, what's up with studying trading?? ) Anyway as they do in football, I went to the tape. The following is my remembrances of this period.

11:35 to 12:10
Context - down channel, holding short
12:15 sym pennant forms, holding short
12:20 FBO of S.Pennant, lateral formation developed, retrace to RTL in progress (dec. black volume), hold short
12:25 Same scenario as 12:20 bar, hold short.
YM to this point mirrored the ES with what I interpreted as a retrace to the RTL), hold short
12:30 Increasing red Volume that also closes as an FBO, YM forms a sym pennant, hold short with an anticipation of reacting to its BO on increasing Volume.
12:35 Increasing black on ES, YM (12:34) BO's its lateral formation and then (12:36) BO's RTL to the upside, Context now is up channel, reverse long.
12:40 ES Price BO's RTL on decreasing volume anticipating smallish move to the upside, YM appeared to be forming a PT3 up.
12:45 forms an IBGS, anticipate retrace to form PT3 up, YM remained in a tape.

Now I realize all I had to decipher is that we were in a 3 bar dip on the ES

This was a tricky time (all the way to 13:25 - at least ) where one had to be actively determining, and than anticipating the unfolding of channel sequences on each bar (something that obviously always has to be done, but in a strong trending markets monitoring is just not as intense as in tight ranges). Some of which did all they could do to throw you off the right side (re: 12:55 ES).

....and that's the way I saw it. Good night and good trading to all.

guava