Iterative Refinement

[ehorn]

Quote from Avi 8:

Before, Bar 12 told us.

Do we not have inc red vol? It certainly is a channel!

http://elitetrader.com/vb/showthrea...=three+AND+ways+AND+point+AND+one#post1840934

The way I saw it was PT1 formed on bar 71 yesterday, PT2 on bar 78, and PT3 on bar 2 today. I also saw bar 7 as an FBO of that channel. It appears to me to be a tape. Increasing red volume is the dominant movement yes. I cannot discern any valid PT2 formation which would extent below the PT1 bar (as annotated on romanus's chart), I also do not discern any noticable retrace. (I only see continuation through those bars until 13)

EDIT: I would post my chart but cannot right now (something wrong with the attachment function)

 

[romanus]

Quote from Spydertrader:

How did this break out differ from when the market forms a Point One?

- Spydertrader

There's no decreasing non-dominant \/ to increasing non-dominant volume gaussians?

 

[romanus]

Quote from romanus:

There's no decreasing non-dominant \/ to increasing non-dominant volume gaussians?

Or rather if that FTT were to become pt1 o fthe new channel in the opposite direction we would see increasing black, but instead we have SYM.

After SYM the price could have BO and resume the uptrend on decreasing black - so we don't really know that this is not going to be FTT=PT1 situation until increasing red on PRV?

 

[Spydertrader]

Quote from ehorn:

I also do not discern any noticable retrace.

You don't see a retrace because, the market didn't provide one. However, the market did provide Lateral Movement, first on the YM (See 10:20 YM Bar), and since, the YM leads the ES, we expect to 'see' the ES follow where the YM leads. Note how the 'Closes' line up on the ES (10:15 and 10:20) where Price moves left to right. Since we 'see' this channel having a very steep slope and a very narrow width, we expect to 'see' the market indicate a need to 'fan' out our channel (hence the BO on decreasing Volume followed by a Sym Pennant).

Note how this example differs from when the market indicates the FTT formed a Point One.

- Spydertrader

 

[romanus]

Quote from ehorn:

It appears to me to be a tape. Increasing red volume is the dominant movement yes.

-------------------------------------------
Spydertrader

04-26-08 03:48 AM

Tape = Two Price Bars with 2 of the 3 points (Point 1, Point 2 & Point 3) on one of the two Price Bars.

'Chubby' Tape = Minimum of Three Price Bars with Point One and Point Two on the same Price Bar with Point Three located minimum two Price Bars into the future.

Channel / Traverse = Minimum of Three Price Bars with Point One, Point Two & Point Three located on three different Price Bars.

FT3 = Where Point Three, Increasing Volume and an FTT all converge on the exact same Price and Volume Bar.

- Spydertrader
---------------------------------------------

 

[romanus]

Quote from guavaman:

IBV = Increasing Black Volume
IRV = Increasing Red Volume
IV = Increasing Volume
LM = Lateral Movement

Thanks guavaman!

 

[Spydertrader]

Quote from romanus:

After SYM the price could have BO and resume the uptrend on decreasing black - so we don't really know that this is not going to be FTT=PT1 situation until increasing red on PRV?

I don't have any idea when you knew, but I know when the market signaled its intentions. Re-read the posts tonight.

- Spydertrader

 

[romanus]

Quote from Spydertrader:

Re-read the posts tonight.

- Spydertrader

I will

 

[ehorn]

Quote from Spydertrader:

You don't see a retrace because, the market didn't provide one. However, the market did provide Lateral Movement, first on the YM (See 10:20 YM Bar), and since, the YM leads the ES, we expect to 'see' the ES follow where the YM leads. Note how the 'Closes' line up on the ES (10:15 and 10:20) where Price moves left to right. Since we 'see' this channel having a very steep slope and a very narrow width, we expect to 'see' the market indicate a need to 'fan' out our channel (hence the BO on decreasing Volume followed by a Sym Pennant).

Note how this example differs from when the market indicates the FTT formed a Point One.

- Spydertrader

As always, Thanks for taking the time to produce a valuable response. As I replied to Avi 8, I saw the morning unfold within a channel which existed from last afternoon (with the PT3 occuring on Bar 2) and viewed romanus's annotated channel as a tape. I did not "see" a valid PT2 which broke below the PT1 bar in the example. But it is nice to know that either way we arrive at the same point.

Have a great night and thanks again for your insights.

 

[Padawan]

Quote from Spydertrader:

I don't have any idea when you knew, but I know when the market signaled its intentions. Re-read the posts tonight.

- Spydertrader

Trying to better understand context, so here's my attempt.

The YM was moving laterally as the ES moved up on decreasing/non-dominant volume. We know that valid BO's occur on increasing volume, otherwise we fan the channel. We also know that price can move from point 2 to point 3 on lateral movement, which was occurring on the YM. Since the YM leads ES, we "see" (for me during the review exercise ) that the ES FTT had no markings of a point 1 for a new up channel. As romanus mentioned, we would need to see increasing black to confirm an up channel, which never happened because YM was saying "continuation down". The steepness of both the ES and YM channels also appears to play a role, but I'm still working on understanding that part.