Iterative Refinement
- Thread starter Spydertrader
- Start date
Hello all,
I wanted to pass a trade by yall, and see what you thought. I have attached the Daily and 5 minute chart below for the stock GIGA. I have been watching thiis stock closely for several days because of the daily chart. Since the middle of April the stock has been compressing into what I believe is a pennant (please correct me if I am wrong). It has lower highs and higher lows. In addition, the volume, on average, has been decreasing. This stock seemed ripe to jump. I have watched it, though, and nothing really happened. A few false starts.
Well, I was watching it today and it started out as usual. Low volume, nothing much happening price wise. Then, I checked it throughout the day and watched its price steadily rise. Still, not much volume though, so I moved on to other pursuits.
Then I noticed around 2:15 that it's volume was picking up. I checked its chart and a solid upward channel had been followed throughout the day. I thought, increasing volume, continuing trend. I also saw it approaching the large blue trend line from the daily chart. It was only around 1/2 of FRV, bought I bought 1/2 of what I usually would, and waited to see what happened.
The volume continued up the channel nicely, so I bought the second half around 3, as volume was still increasing. As I watched, the volume continued to accelerate and the stock broke through the large blue trendline.
Now, I have a couple of questions.
1) The stock did not reach FRV, but does the rapid volume and price increase at the end of the day qualify it for such a purchase? ( I know, I'll find out soon enough
)
2) You can see the channel I have marked in the daily chart which GIGM skated up the whole day (until it broke out at the very end.) By the time I saw it, it was obvious and easy to draw. However, As I looked back to 11:45 to 12:25 I saw two FTT's, one FBO, and a BO. I am trying to figure out how I could have drawn this channel BEFORE it was so obvious. In Jack's "Determining Trend" article, he saws that an FTT becomes the new PT3 for the new channel, but for the life of me, I cannot see how the second FTT at 12:25 becomes the PT3 for the channel which existed for most of the rest of the day. It does have increasing volume after it, which validates it as a point 3..... but I must confess I am a little lost.
Thanks all...
JF
P.S. Of course, after all this analysis I see that they are announcing earnings next weak
. SO whatever the case I will have to sell this stock soon!
I wanted to pass a trade by yall, and see what you thought. I have attached the Daily and 5 minute chart below for the stock GIGA. I have been watching thiis stock closely for several days because of the daily chart. Since the middle of April the stock has been compressing into what I believe is a pennant (please correct me if I am wrong). It has lower highs and higher lows. In addition, the volume, on average, has been decreasing. This stock seemed ripe to jump. I have watched it, though, and nothing really happened. A few false starts.
Well, I was watching it today and it started out as usual. Low volume, nothing much happening price wise. Then, I checked it throughout the day and watched its price steadily rise. Still, not much volume though, so I moved on to other pursuits.
Then I noticed around 2:15 that it's volume was picking up. I checked its chart and a solid upward channel had been followed throughout the day. I thought, increasing volume, continuing trend. I also saw it approaching the large blue trend line from the daily chart. It was only around 1/2 of FRV, bought I bought 1/2 of what I usually would, and waited to see what happened.
The volume continued up the channel nicely, so I bought the second half around 3, as volume was still increasing. As I watched, the volume continued to accelerate and the stock broke through the large blue trendline.
Now, I have a couple of questions.
1) The stock did not reach FRV, but does the rapid volume and price increase at the end of the day qualify it for such a purchase? ( I know, I'll find out soon enough
)2) You can see the channel I have marked in the daily chart which GIGM skated up the whole day (until it broke out at the very end.) By the time I saw it, it was obvious and easy to draw. However, As I looked back to 11:45 to 12:25 I saw two FTT's, one FBO, and a BO. I am trying to figure out how I could have drawn this channel BEFORE it was so obvious. In Jack's "Determining Trend" article, he saws that an FTT becomes the new PT3 for the new channel, but for the life of me, I cannot see how the second FTT at 12:25 becomes the PT3 for the channel which existed for most of the rest of the day. It does have increasing volume after it, which validates it as a point 3..... but I must confess I am a little lost.
Thanks all...
JF
P.S. Of course, after all this analysis I see that they are announcing earnings next weak
. SO whatever the case I will have to sell this stock soon!Giga Daily Chart
I believe I got snookered at this point b/c I wasn't giving proper weight and consideration to recent developments.
The 10:50 bar gave us an accelerated Pt3 down channel. This also appeared at the time (and also in retrospect) to be an FTT. We had a dip at 10:45 so that satisfied the sequence angle, additionally we had VE's of the larger Pt3 down channel (larger Pt3 down at 10:30). If all this wasn't enough the YM posted an IBGS on DRV (10:54) with the next YM bar BOing an RTL of a fanned out Pt3 Down channel on IBV.
The snookered thing happened because I was incorrectly focused on the BO of the accelerated down channel on DBV - 10:55 bar - (and ignoring / forgetting the flaw at 10:45 thus satisfying the sequence) and thought we still needed to complete a sequence when in fact my friends it was already satisfied (see 10:45 bar).
The Pt3 up on the YM (11:04) finally shook me out of my haze and I found up to be the right side of the market at that point.
Aaah! I'm pooped and it's past 2:00 am and I landed right on this sentence:
"I do expect everyone who recently posted a question to participate."
I still have seven more pages to read .. but I guess I'd better stop now and take the "boss"'s order or else ....
Here's my take: with Price closes in relation to the previous bar:
Vol incr:
- Price closes higher => Price goes higher
- Price closes lower => Price goes lower
Vol decr:
- Price closes higher => Price goes lower
- Price closes lower => Price goes higher
37 words !!! and this only works when King Context is willing to cooperate.
.. good night to all who see the moon and good day to all who enjoy the sun.
"I do expect everyone who recently posted a question to participate."
I still have seven more pages to read .. but I guess I'd better stop now and take the "boss"'s order or else ....
Here's my take: with Price closes in relation to the previous bar:
Vol incr:
- Price closes higher => Price goes higher
- Price closes lower => Price goes lower
Vol decr:
- Price closes higher => Price goes lower
- Price closes lower => Price goes higher
37 words !!! and this only works when King Context is willing to cooperate.
.. good night to all who see the moon and good day to all who enjoy the sun.
Very late response.
Some have already posted what I was thinking but I will state what I understand it to mean.
Price-Volume relationship:
Volume determines price volatility. Volume leads price when we have increasing volume with decreasing volatility or decreasing volume with increasing volatility
Some have already posted what I was thinking but I will state what I understand it to mean.
Price-Volume relationship:
Volume determines price volatility. Volume leads price when we have increasing volume with decreasing volatility or decreasing volume with increasing volatility
If vol trend is incr, price trend will continue.
If vol trend is decr, price trend will change
(p82 BMFBW)
----
After considering the 13:45 bar of 05/07 a little more, perhaps a more precise way of stating the reason for reversal might be that we had IBV within a pennant <i>but remained in the pennant </i> (i.e. did not break out). When we have increasing volume while in a pennant, we anticipate price should BO of the pennant in the direction of the increasing volume. This is WMCN. Since WMCN did not, we consider this to be a change in sentiment. If we had an increase in volume causing a BO of the pennant, we expect to see more increasing volume; otherwise, we have change. So, perhaps, the DRV on the 13:50 bar could actually be the 2nd indication of change visible on the ES5M ? (the first being IBV but no formation BO)
Thanks for your efforts, Spyder, guava, and others.
- Talas
(IBV = incr black vol)
(DRV = decr red vol)
If vol trend is decr, price trend will change
(p82 BMFBW)
----
After considering the 13:45 bar of 05/07 a little more, perhaps a more precise way of stating the reason for reversal might be that we had IBV within a pennant <i>but remained in the pennant </i> (i.e. did not break out). When we have increasing volume while in a pennant, we anticipate price should BO of the pennant in the direction of the increasing volume. This is WMCN. Since WMCN did not, we consider this to be a change in sentiment. If we had an increase in volume causing a BO of the pennant, we expect to see more increasing volume; otherwise, we have change. So, perhaps, the DRV on the 13:50 bar could actually be the 2nd indication of change visible on the ES5M ? (the first being IBV but no formation BO)
Thanks for your efforts, Spyder, guava, and others.
- Talas
(IBV = incr black vol)
(DRV = decr red vol)