On 10-case geometry and beyond

[baro-san]

Definitely.

Since I do not use degapping I will let others answer with their interpretation of such. Of importance regarding degapping... In addition to bastardization of the Y-axis, LTL and RTL is affected, as well as rdbms. Volume however is immutable, and ones ability to properly discern fractals and gaussians in realtime becomes a critical skill for trading degapped.

Also, please remember the chart being discussed is a DAILY.

I know, I know, and I agree My interest is purely academic for both rdbms, and daily.

Here there is a manually degapped chart. I was curious how it looks. I have the impression that, sometimes, the "degapped" leads the "gapped" at the turns.

 

[tiddlywinks]

ES opened with a BMREV (FS) of Fridays PP1-EE. Requirements for FS(BOT1) of the accelerated RTL do not exist.
We are expecting rdbms volume to be a P1. Technically, that has occurred with the BMREV.
It is also known at this time, this (up) is a non-dom move and that today can not be Wait.

Pay attention to Pace... IV takes us down (an OB and followup EE?). Steady or DV stalls, or drives towards the larger container RTL... 2725 or so. Minutes into trading, and we know today will be an XB, Stitch-B, or OB price bar form. Ahhh, but the close...

Recall, this is a DAILY.


Trade On!

 

[tiddlywinks]

Half way through the RTH session (3.25 hrs) PRV is .34 of Friday.

 

[tiddlywinks]

And the winner is.... OB!!

My rdbms take...
The OB is PP4-EE, which is P1/T1.
The opening BMREV(FS) is de facto P1. FS is supposed to be a way to get/keep the trader on the correct side of the market. Part 1 of PP4 is P1. Therefore, no failsafe event is needed. The bar is PP4-EE.

The second part of PP4 is T1. The PP4 volume confirms a T1 in context to Fridays PP1. We also know today's volume remains elevated in context to the first P1 of the segment.

WTF does all that mean? Hell if I know!
PP1 to PP4 Is a C-turn... it is time to exit short and reverse, per this analysis. As always, adhere to the rules for proper timing.
DV (non-dom) pushes to the RTL... 2720/25 or so.
Since today was PP4-EE, as per EE rules, rdbms P1 is expected tomorrow. Possible a Wait. IV is not required.

I'll stick to intraday trading, flat at eod, thank you. Daily's are not my gig to trade. But it is
interesting. Fascinating even.

 

[tiddlywinks]

I received this question via PM...
"What are the timing rules for the exit short and reverse?"

Briefly, this is MY answer...

Firstly, Jack Hershey and other teachers of his methods for use with futures did not use daily charts. 5 minute charting is the prescribed interval, with additional "tools" on smaller intervals such as a 2 minute chart, and larger intervals such as a 30 minute chart.

With that out of the way, one of the first rules is that "Wait" means wait! No action should be taken on such bars. Wait is determined by the price bar form and the associated volume. Recall this threads title.... 10 case geometry refers directly to the 10 cases of price.

The current volatility, or maybe a better description would be the expanded range of individual bars as well as overall daily market movement, highlights a non-optimal status of the wait rule on slow intervals, such as daily. Perhaps why daily is not prescribed.

A more actionable answer to the question is dependent on the traders understanding and comfort level in usage. In my case, If I was trading off the daily, which I am not and do not, the close of the PP4 would have been the "trigger". And just like any other S/R... If Above, wait for a retest to enter(or perhaps another JH signal as the bar forms). I think Jack would refer to this type of retest "2nd chance". If below, you'd continue to make money because you are holding short. Notwithstanding the heightened volatility, negation of long would be a break of the 2nd chance low, and in all cases, penetration of the PP4 bookmark, at the PP4 bottom.

Attached is today chart around 10:45am pst

HTH.
Maybe others can offer other thoughts.

 

[tiddlywinks]

An update on the ES daily.
The chart is somewhat of a melding of esoteric (JH methods) and mainstream (Fibonacci).

1) Yesterday was a SYM... A WAIT bar. If trading off the daily chart, yesterday you sat on your hands while holding short. Of note, WAIT bars are not measurable in volume... there is no rdbms assignment. There are specific exceptions. We were expecting a rdbms P1, Wait, or possibly an EE or FS event. We got Wait.

2) Still expecting a rdbms P1, Wait, or possibly an EE or FS event, today we got FS (BOT1). FS is de facto P1. Note how today, including the opening gap, played the 23.6 and 38.2 fibonacci zone of the recent decline. An interesting observation I think.

Bottomline: if trading off the daily you were presented an option right at the open. You were holding short, and you knew today was a BOT1. PP4 to BOT1 is a turn! If you reversed per the PP1 to PP4 turn and "waited", on or very near todays open you banked short profits from a week ago or more, and you went long. If you followed the PP4 to BOT1 you did nothing today, and you are still short.

WTF does it all mean? Hell if I know!
PP4 to BOT1 is a turn! It can be a turn of any type set, A,B,C, or D. The rules are to reverse only on C-turns, and this MIGHT BE a C-turn. Others here are more versed in turn sets than myself. In any case, tomorrow, rdbms can be another P1, T1, Wait, or an FS/EE event. RTL/LTL methodology requires IV and IP real soon to affect a BO trade. Otherwise it's FBO.

Trade intraday... problems solved!!


Oops... forgot to put a dashed green BM on the low of today. if/when penetrated is FS(BMREV), and a potential source of whipsaw, imo.

 

[tiddlywinks]

This will be my last writing on the ES daily, for this go-around.
Hopefully others benefit in some small way from it.

If you followed the rules, in particular those involving "wait" you are long...
As mentioned YESTERDAY, 10/31/18... "on or very near todays open you banked short profits from a week ago or more, and you went long."

If you did not adhere to the PP1 to PP4 reverse on C-turn rule, then you remain short. Although PP4 to BOT1 is a turn, it is not a concrete C-turn. Your own understanding of the turn sets, A,B,C,and D, and your own trading confidence and comfort dictated your action if any, on the PP4 to BOT1 turn. I might add it is clear there was a turn on a sub-fractal. Do you see any IBGS on the daily bars the last 2 days?

WTF does that all mean? Hell if I know.
You are long as of yesterday morning. Today was rdbms T1. The price bar is XB. A green BM for the current segment sits @2706.25. There is immediate overhead from fractals generated on the way down. Unless the low @2603 (the PP4) is penetrated, for now that is/was FTT. IV and IP is needed for the container method BO. Since the current gaussian has not(yet?) signaled BO, I have placed a fanned RTL for tracking. Tomorrow we expect rdbms T1, P2, Wait, or FS/EE. You banked significant short profits yesterday morning. You are long as of yesterday morning. Todays action has returned (on paper) a nice portion of the giveback incurred by adhering to the wait rule.

Trade intraday... problems solved!

Good trading to all. Thanks!

 

[Simples]

This will be my last writing on the ES daily, for this go-around.
Hopefully others benefit in some small way from it.

If you followed the rules, in particular those involving "wait" you are long...
As mentioned YESTERDAY, 10/31/18... "on or very near todays open you banked short profits from a week ago or more, and you went long."

If you did not adhere to the PP1 to PP4 reverse on C-turn rule, then you remain short. Although PP4 to BOT1 is a turn, it is not a concrete C-turn. Your own understanding of the turn sets, A,B,C,and D, and your own trading confidence and comfort dictated your action if any, on the PP4 to BOT1 turn. I might add it is clear there was a turn on a sub-fractal. Do you see any IBGS on the daily bars the last 2 days?

WTF does that all mean? Hell if I know.
You are long as of yesterday morning. Today was rdbms T1. The price bar is XB. A green BM for the current segment sits @2706.25. There is immediate overhead from fractals generated on the way down. Unless the low @2603 (the PP4) is penetrated, for now that is/was FTT. IV and IP is needed for the container method BO. Since the current gaussian has not(yet?) signaled BO, I have placed a fanned RTL for tracking. Tomorrow we expect rdbms T1, P2, Wait, or FS/EE. You banked significant short profits yesterday morning. You are long as of yesterday morning. Todays action has returned (on paper) a nice portion of the giveback incurred by adhering to the wait rule.

Trade intraday... problems solved!

Good trading to all. Thanks!

View attachment 194123

10-29 turn seems to be non-dom in volume. Degapped, the bar isn't OB. What this could mean is that current downtrend isn't convincingly over just yet.

 

[tiddlywinks]

10-29 turn seems to be non-dom in volume. Degapped, the bar isn't OB. What this could mean is that current downtrend isn't convincingly over just yet.

A properly de-gapped chart will be COMPLETELY different. Different as in like a completely different instrument.

Care to show a de-gapped ES RTH daily from October forward, with containers, gaussians, and rdbms annotations? Or any of the three?

FWIW, container methodology on the "normal" charts, as I stated, also have a BO skeptism as you've mentioned.

 

[Sprout]

To de-gap or not to de-gap.

Let's start with what's true.

It's true that Jack first introduced de-gapping the open with the prior close as a way to carryover the previous context in sentiment. It's also true that if one were to use this logic then all daily bars should be able to have a de-gapped sentiment carryover that would be continous and congruent. It's also true if one were to do this on daily bars that the resulting chart would look entirely different with the associated H's and L's not an accurate representation of documented prices for those days. It's also true if one does de-gap there is a geometry that is present that goes beyond coincidence. So how does one go about resolving this apparent paradox?

I believe one of the clues is as @Simples pointed out, the name of the system is RDBMS, R being 'Relative'. Also as @tiddlywinks pointed out, going intraday resolves some of the issues around the conundrum. Intraday, the notion of de-gapping applies to resolving the arbitrariness of time-splicing. During the formation of whatever time fractal one chooses to monitor (even if is not the periods Jack recommended) the gaps represent the 'crossing of the spread' between Bbid/Bask. As such it's an easier logical leap to make with de-gapping as representing 'true' price cases. The 'synching' of bars that occur intraday when de-gapping cannot be dismissed nor discounted.

If we zoom out back to daily bars and to the PVT system that was first shared, the extended session in equities with such low volume would be more like intraday futures. However in futures even though the volume is low in during non-RTH, it can still represent a far amount of liquidity which results in substantial gaps. One thing that I've been thinking through in regards to this is why the overnight session wouldn't be just 'squished' into a single bar with the volume aggregated. The fact that stops me from adopting this is the perfection in the geometry when 'traditional' de-gapping is done.

As a tangent, it turns out 'squishing' a bar into it's prior has brought clarity to a lot of price formations and sequences that are confusing. Just as going to a faster time scale within a bar can illuminate continuing or changing sentiment.

A couple of other truths. The markets operate on the enduring spectrum of human emotions. It's also true that they are evolving and that we live in a much more connected global marketplace where algo's do not need sleep. In this connected global village, it's becoming easier to trade in markets that is not in one's time zone.

These are my current thoughts which has brought me to migrating some of my code into NT8 so that I can have a better understanding on the effects of de-gapping larger time-scales with customized trading sessions. In Tradingview, the charts are continuous which includes the overnight session into the daily bars and does not allow for the above separation of data. My current operating point is to view those movements of price as the non-Dom move of the price bar. This translates into two paths of price. The path of least resistance as a trend continues within a bar in a non-Dominant leg of price and volume. In contrast, the alternate path of greater volatility where there is at least one retrace through the doji.

hth