Traverse.
- Spydertrader
Iterative Refinement
- Thread starter Spydertrader
- Start date
Traverse.
- Spydertrader
I understand what you are saying here Spyder (both in the quote above and your answer to Romanus' question) but I believe you misconstrued how I looked at this matter. Please see the attached snippet.
The red 1,2,3 is how I originally and incorrectly annotated this region. The blue P2 (which is in fact the correct P2) was then incorrectly interpreted as indicating sequence completion and the rest of the malarkey followed. So if the correct 'small' 1,2,3 is the re-annotated blue version (and I believe that is what you said) then the question that remains for me to answer is WHY was the red 1,2,3 sequence incorrect.
For those traders who donât know, it is my understanding that, for a downchannel, one first builds the pre-channel with the first downtraverse segement or downtape + the uptraverse segment or uptape. Picture a triangle with its base tilted down from the horizontal and its apex pointed down. Now one has to build the channel. This is accomplished with the second downtraverse segment which is composed of a 1,2,3 traverse segement. Both Jack and Spyder have talked about this in a variety of ways. This second downtraverse segment produces a channel when we get a VE, which by definition is a price which surpasses the LTL formed by the prechannel and gives us a new LTL and a new P2. So now picture the triangle with a vector attached to its P3 (which as Jack says is the âfirstâ P3 of the channel) âpushingâ out the LTL â the so-called range expansion. There may be one or more VEâs and then there will be a RETRACE to another P3 which is a traverse segment P3 and NOT a new channel P3. Then what needs to happen is that we validate this P3 and complete the sequence. Only after we get validation of this P3 can we anticipate an FTT or, more as recently designated, a signal for change. If you look at a chart of yesterday you can see the upside down, tilted triangle and the vector âpushingâ out towards the LTL.
So back now to why I screwed up and picked the wrong âlittleâ P2. My questions to Spyder were ânopedâ X3 and so it is here that I missed yet another critical component of âMâ but not the one Iâd been missing prior to my epiphany a month or so ago.
Briefly put. Why is the red P2 NOT a P2? My original logic is as follows. What I observed was that there was a breakout from the LM with the closes of 2 bars showing rising V compared to the second bar of the pennant, the, as Jack calls it, âfirst channel P3â. But we need a second 1,2,3 as I explained above and so now we go to the OB at 15:40 which is an internal and was followed by 2 bars with closes below the low of the OB, on rising volume and the rest of the malarkey follows.
So where is the mistake in âMâ? My best idea is that it is an incorrect validation of the red P3. If I had to pick one thing it would be that the 15:50 bar is a spike bar and therefore canât be used as the âsecondâ rising volume bar.
As always any thoughts from the oracle of Toledo are greatly appreciated but anyone can feel free to chime in.
TIA
lj
IMO the red P2 is not Point 2 because the red P3 is not Point 3. And the red P3 is not Point 3 because by time the 15:50 bar closed we see a PA. And WMCN after this PA is known - non-dom movement followed by more IRV. Which is precisely what usually happens after Point 2. Therefore 1550 can not be anything other than Point 2. I could be wrong, but most likely I am not in this particular case.
I don't believe I would have worded it quite in the fashion you chose, but you are not incorrect. Nicely done.
- Spydertrader
Not at all. I fully realize exactly how you looked at the matter in question, and I also know what you failed to see with respect to the signals provided by the market. In fact, in real time I thought to myself, "I bet a whole bunch of folks believe the market has passed Point Three and signaled change." When charts posted his incorrect 'Pre-Flight Check' last night, once again, I could easily see what he too had missed.
Since I have long stopped attempting to save charts from himself, I simply waited for someone else to post a question with respect to the same time period. (My money was on you or romanus, but I was hoping for romanus because his questions don't take quite so long to read as yours do.
At any rate, the point I attempted to drive home this evening involves knowing you know WMCN - not someone's 'interpretation' or not someone's 'view' and certainly not how someone 'saw things' - but actually, how things are.O.K. so you (and a host of others) missed something. Clearly, the market has told you so - without any possibility of error. So what? The market has told you that your original annotations incorrectly described the market, and what is more, the market gave you the correct annotations. All that remains is to figure out why you incorrectly annotated so you don't repeat the process when the market provides the same situation again). Since I have already told you where to go look, you have a roadmap to your destination.
All one now needs to do is actually take the trip from Point A to Point B (or in this specific example - Point One to Point Two.)
Keep in mind the following as you make this short journey ....
This stuff is not complicated!!
- Spydertrader
I see what you are saying. The same thing happened with the red P2 however and so what you would seem to be saying further, is that as long as we keep seeing pace acceleration, as opposed to just a simple increase in pace, then we anticipate a 'new' P2, if you will. This is a much cleaner way of anticipating sequence patterns than the stuff I was blabbing about BUT there is a contextual component which I have elaborated on and when you combine the two of these things, the whole of today just plops out before you.
I presume that the spike bar at 15:05 today is looked on more as a harbinger of more IRV because it caused no shift in dominance.
We edge closer to solving this freaking thing Romanus and perhaps the next thing to fall will be our mutual friend peak volume, but that can wait till tomorrow.
Thanks for your help and you also Spyder.
lj