Iterative Refinement

Quote from phineas j. w.:

Is this chubby tape valid?
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No. The annotation is not correct if one trades on the 5 minute ES Traverse resolution level. If you trade at a faster fractal (one which uses fine or medium level tools), then the annotation is accurate. Volume has not provided that which must come next on the 5 minute ES Traverse Level.

- Spydertrader
 
Change and Sequences

We know Bar One provided a signal for change, and we should know what must come next with respect to the sequences of Price and Volume. After a signal for change, the market shows decreasing non-dominant Volume as Price (slowly at first) begins to move away from our change signal. We see this same phenomenon develop on Bar Two. We see the sequences of Price and Volume begin to form the required sequences from Point One to Point Two to Point Three. As a result, we 'see' Bar Two as continuation down which requires the action of hold.

- Spydertrader
 
Quote from Spydertrader:

No. The annotation is not correct if one trades on the 5 minute ES Traverse resolution level. If you trade at a faster fractal (one which uses fine or medium level tools), then the annotation is accurate. Volume has not provided that which must come next on the 5 minute ES Traverse Level.
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Thank you, very helpful. We only have a Stall on 15:30 [close of], but no retrace.
 
Point One to Point Two

As Price begins to accelerate away from our Bar One signal for change, we note that Price and Volume continue to build the sequences required to move from Point One to Point two to point Three. in other words, what must come next continues to unfold. Thus far, the market shows Price moving from Point One to Point Two. As Bar Three nears completion, the trader notes Price moving away from the extreme - providing an indication the market has reached Point Two, and now plans to head to Point Three. As such, we see Bar three as showing continuation down, which once again, requires the action of hold.

- Spydertrader
 
Point Two to Point Three

We know to expect decreasing non-dominant Volume as Price retraces from Point Two to Point Three. We also know the number of ways the market can fullfil this expectation.

With Bar Three providing such a large range (6+ points), we anticipate seeing some form of left to right movement (moving forward) as Price slows down its rate of change and moves from Point Two to Point Three. Bar Four meets our expectation forming a Symmetrical Pennant on decreasing Black Volume. As a result, we 'see' no change in mode (nor do we even have permission to seek a change in mode) on Bar Four, and view Bar Four as continuation down. Again, the action required here remains hold.

- Spydertrader
 
Where is Point Three?

While we do not know how long left to right movement may last, we do know left to right movement must end and a return to increasing dominant volume must return, before the market has completed the sequences from Point One to Point Two to Point Three.

As Bar Five opens and begins to head south, it appears (based on PRV) that we have indeed arrived at our Point Three and the market has plans to confirm a return to dominant Volume. However, by the end of Bar Five we see Price head lower on decreasing volume. Although we have annotated Bar Five as a Point Three on our chart, the market has not yet provided the increasing volume required to confirm - even though Price has exited the Symmetrical Pennant formed by Bars Three and Four. Since the market has not yet confirmed our Point Three, and not yet returned to dominance, we see this information as continuation down. Once again, hold provides the action required.

- Spydertrader
 
Sequence Complete

As Bar Six opens and begins to head higher, the market once again appears to be forming a Flat Bottom Pennant (monitoring intra-bar). Again, we have no need for concern as we know we have yet to have the market provide confirmation of our annotated Point Three, and until the market completes its sequences, we cannot seek a signal for change. However, as time moves forward, Price begins to move off its extreme and head lower. In addition, Volume provides actual increasing Volume as Bar Six arrives at its close. As such, The market has now completed its sequences from Point One to Point Two to Point Three, and the trader now has permission to seek a change in market mode. Since no signal for change exists on Bar Six, and no mode change occurs, we see Bar Six as continuation down, and of course, the action required is hold.

- Spyderrader
 
Change

Now that the market has completed the sequences from Point One to point Two to Point Three, we know we now have permission to seek a signal for change. As Price continues to head lower on increasing PRV, the market, at first, shows signs of continuation down. However, as Price bgins to move higer off its extremes, those traders who trade Intra-Bar have already witnessed change signals on the finest of tool sets. As less fine, and medium level, tools confirm with their own signals for change, the End of Bar Trader notes Price has crossed over the low of Bar Six on increasing Volume and begins to form an IBGS in the process. As the dominos of change continue to fall - first within the bar itself - Bar Seven closes creating the end of one Traverse and the beginning of another. The market has provided an FTT and a Point One of a, soon to form, non-dominant Traverse. The market mode has changed from short to long, and as a result, the action required now is reverse.

Wash. Rinse. Repeat. Eighty-One bars a day.

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2059094>
 

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Quote from Spydertrader:

Sequence Complete
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Spyder,

Thank you for your latest effort here. No one should gloss over the amount of time and energy it takes to create a play by play.
 
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