Iterative Refinement
- Thread starter Spydertrader
- Start date
?? After pink down channel is broken, blue channel is an anticipated up channel. The black IBGS bar marked pt3 is a change signal after price traveled pt2 to pt3. WMCN is increasing black, as price returns into blue channel, instead we get increasing red. What must come next, did not, therefore we find ourselves in dominant traverse of a red pt3 down channel. The red bar on increasing PEAK volume the day before yesterday indicates change. Yesterday's red IBGS, lateral movement on increased volume is change??
EDIT:The black IBGS bar (6-19-08) marked pt3 is also OB.
I have annotated I.B.G.S bars with green and red shading. The bar to which you refer is an Outside Bar. Outside Bars represent a different scenario than an I.B.G.S. bar because multiple long and short signals can (and often do) develop within them. Whereas, an I.B.G.S Bar 'changes' mode only once. As a result, your analysis for this specific bar in this specific context does not represent a correct viewpoint.
Should you choose to review your analysis of the previous (Outside) Bar, now that you have a thoroughly annotated view, I believe you can now arrive at a different conclusion with respect to WMCN. As always, WMCN represents a single answer and one which the market signals in advance.
I think you'll find that WMCN actually did materialize, as expected, else I don't think you'd have seen a previous post from me advising LittleMac to 'take care' on this long trade (from which he had already exited)
How do you know, for sure you witnessed Peak Volume? The previous day's Pace level indicates Volume had yet to reach Exteme Levels as yet (See Wealth-Lab Chartscript), and Higher Levels of Red Volume developed the day after you believe Peak Volume signaled. Perhaps, Peak Volume signals result from other items other than your current guesses.
Agreed, but I don't think my point included knowing whether or not an I.B.G.S on increasing Volume represents change. After all, I asked the question about WMCN the night before the market provided the change signal currently under discussion. Therefore, once again, we have two possible choices.
1. I made a wild ass guess and randomly chose a Point in Time to ask a question which held no significance whatsoever in a most coincidental manner to actual market conditions. In other words, random chance.
or
2. I once again chose to post a chart, on the same stock, on back to back days for a specific reason. In other words, I 'see' something you do not.
- Spydertrader
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1975382>
6-12-08 bar (increasing red marked pink pt3 and blue pt1) and 6-13-08 (inside black bar on decreasing volume) form SYM pennant.
6-16-08 breaks out of formation on increasing volume followed by more increased volume on 06-17-08.
The \/ gaussian shift after FTT and pink RTL break also indicates reversal.
All this suggests that down trend has changed.
So first leg (pt1 to pt2) of the pt3 up channel is established.
6-18-08 on increased red volume creates red pt3 down channel.
However, I think the price can not go down without making an attempt towards blue LTL (not confirmed yet as of 6-18-08) on increasing black volume.
6-19-08, the outside bar, makes a run up towards blue LTL on decreasing black, but still no increasing black.
The only likely candidate to show increasing black is 6-20-08, which, probably shows increasing black first before turning red, which would confirm pt3 blue up channel.
As far as what must come next tomorrow, after 6-26-08 VE of the more recent pink pt3 down channel, is retrace (change) in our case expressed by IBGS bar on 6-27-08.
Among other things, outside bars fall in the 'confusion' area for me and I can not figure just yet why in this particular context, this outside bar signaled continuation short.
What also creates a greater confusion about this context is the alternate view that when price walked out laterally on decreasing volume out of steep pink down channel indicating the need to fan out, the increasing black on 6-16-08 can be attributed to formation BO, and increasing black on 6-17-08 to spike bar.
Both of these scenarios account for increasing black in down trend without signaling a change in trend.
If this is a correct view, then increasing red on 6-18-06 confirms that down trend has not changed, an Outside Bar on 6-19-08 represents a non-dominant retrace, and WMCN after that retrace, is the resumption of down trend delivered on 6-20-08.
In this case your comment:
makes perfect sense to me, as well as the reason why this outside bar signaled short in this context.
Where the biggest difficulty lies for me right now is integrating these two views which seem opposite in nature: based on gaussians and RTL BO we have a reversal, however based on formation BO and spike bar the trend has not changed.
After describing everything I see, I still can not see what you see, but I am pretty sure there's a very good reason why you drew that pt3 up channel.
Apologize for the long post. A shorter version would be:
- The \/ gaussian shift after FTT and pink RTL break indicate that the trend has changed. Therefore a pt3 up channel would exist to annotate it.
- The increasing black on 6-16-08 can be attributed to formation BO, and increasing black on 6-17-08 to spike bar. Both of these scenarios account for increasing black in down trend without signaling a change in trend.
D referring to myself). Thank you for responding. This should be a very good drill for me indeed.Quote from cnms2:
I guess this was a test: the blue channel is ... not a point 3 channel!
If that's true, then 6-19-08, the outside bar is not an FTT, and therefore the more recent pink down channel is not a channel either . Consequently the Thursday's VE is not a VE ,and as such is not a signal for change, but who did all that buying that moved Friday's close all the way up to it's high ?