Iterative Refinement

[callmate]

Quote from Tums:

March Exercise

What Must Come Next

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1818833">

Context - downtrend – bar 1 & 2 – increasing volume and decreasing price – continue
Bar 3 - decreasing volume ( could be a flaw) if in the dominant channel – hold
Bar 4 - IBGS , shift in sentiment, possible VE, FTT or bounce off LTL - anticipate change
Bar 5 & 6 - retrace – decreasing volume, increasing price looking for point 2 - change

 

[sscott]

Quote from Tums:

March Exercise

What Must Come Next

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1818833">

Let your imagination fly...

(You can start with where it has been)

Bar 1 and 2, increasing red vol, decreasing price, down channel. Bar 3 lower vol, decreasing price, anticipate flaw, if flaw, confirms down channel, hold. Bar 4, increased vol, price exits bar at same price it entered, anticipate FTT, or FBO, anticipate change. Bar 5 and 6, decreasing black vol, retrace back to RTL, confirms change, looking for point 3 of down channel. WMCN, increasing red vol to confirm pt 3 of down channel.


Any comments are appreciated.....

 

[ehorn]

Quote from Tums:

March Exercise

What Must Come Next

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1818833">

Let your imagination fly...

(You can start with where it has been)

and fly it shall...

EDIT. added note for clarification

 

[guavaman]

Quote from ticktrade:

bar 4 Increasing neutral bar- most likely a IBGS/ftt,

Point of information question.

If a bar (let's say in a down channel) opens and moves around a bit; then moves down a good ways and finally retraces to close at its open (i.e. nuetral bar, doji bar) is this considered and IBGS even though the close was not above the open?

Guava's answer to the question is the same as Callmates, we are in a retrace of a down channel on our war to the RTL looking for a PT2. But the question is inherently unfair to those of us currently without an imagination

 

[ehorn]

You gotta love those pennant BO's

 

[sscott]

Quote from guavaman:

Point of information question.

If a bar (let's say in a down channel) opens and moves around a bit; then moves down a good ways and finally retraces to close at its open (i.e. nuetral bar, doji bar) is this considered and IBGS even though the close was not above the open?

Guava's answer to the question is the same as Callmates, we are in a retrace of a down channel on our war to the RTL looking for a PT2. But the question is inherently unfair to those of us currently without an imagination

I have a question also, If, from the example, we are in a down channel, wouldn't the 4th bar be the Point 2 of that down channel? (or is the pt 3 down channel already established prior to the example?) If we then considered the 4th bar to be Pt1 of an up channel, then we would be looking for a Pt2 somewhere in the retrace that might then turn into a dominant uptrend?

 

[northchuck1]

Quote from Tums:

March Exercise

What Must Come Next

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1818833">

Let your imagination fly...

(You can start with where it has been)

At first I'd say blue bar is VE. But a VE typically only retraces half of the bar. I'll go with forming pennant.

 

[TraderD72]

Quote from Tums:

March Exercise

What Must Come Next

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1818833">

Let your imagination fly...

(You can start with where it has been)

Bar possibly 3 forms a pennant.

Other than that my diagram would look like ehorn's only Bar 4 would be turned upside down.

The "tail" at the bottom creating an IBGS and possibly an FTT or VE.

Next 2 bars... decreasing black volume as it approaches the downtrending RTL.

What must come next?

If bar 4 was a VE then I would expect + RED PRV to come next. This would create a Point 3 of a new (steeper?) DOWN channel.

If Bar 4 was an FTT I would expect either a BO on + BLACK PRV or - RED PRV to come next (retrace...creating Point 2 of the new UP channel).

Hope Im close....

 

[ehorn]

My view of the morning (ES)

 

[Padawan]

Quote from Padawan:

The market did not provide the confirmation required. The next day price closed lower on increasing red volume creating a sym pennant. Because we did not see what must come next to be on the right side of the market (which was long), we found ourselves on the wrong side of the market. What must come next on Monday to indicate price direction is increasing red volume on a bar which breaks down out of the sym pennant. On Tuesday we would need to see more increasing red to confirm being on the right side of the market.

Spyder, please let me know if I've answered your questions sufficiently and correctly. I've been following SOHU since the example was posted and would like to make sure that we're "seeing" the right side of the market and annotating correctly. Chart attached. Thank you.

Thought I'd never quote myself, but I wanted to share with you that the data on the chart I posted at the time appears to have been wrong, affecting the gaussian annotations. My charting platform is now showing DECREASING red volume for that sym pennant bar when it previously showed increasing red volume for the same bar.

Very strange.

Just thought I'd make the clarification for those who were following SOHU. Lol, and now that I think of it, pennant formations are supposed to always be non-dominant which means they should always occur on decreasing volume. Please correct me if that's wrong. Should've suspected something was amiss sooner.