Quote from niko:
The only comment is that trend lines do not provide Support or Resistance.
In this case where all the trades around this level (the TR overnight) that provided such support.
Perhaps we are having a mis-communication of some sort. Trend channels are essentially long-standing supply or demand which price frequently reverts to. If value is found too far elsewhere, and consistently, on other levels, the channels disintegrate and new ones are formed.
Draw a demand line starting from 3180 on 10/10, where the initial force of the buying pressure which occurs to break the free-fall from 3200+ stabilizes into a sustained upward movement.
Price hits and finds support at the right trend line about 6-9 times depending on how picky you want to be. The left trend line primarily serves as a measure of how far price tends to stray, or how far it is capable of straying from the base support of the movement over time, at least for me.
The demand line from yesterday which I traced from 3350 to 3368 (which I assume you are referring to as a trend line?) was successfully tested twice during the open before price made two new high's, almost to the exact point.
There are definitely additional factors that I missed in understanding the importance of that level, but the demand line was definitely valid. If you're talking about the small channels that I made on my chart for the open, then I do that merely as a way to track the tempo of price's movement in accordance to the base Demand or Supply Line.
For example, during the down-move, the slope of the decline became sharper just before it touched down to support around 3378. This is demonstrated by it falling slightly out of the bounds of my left channel line (light purple). It seemed apparent to me that the strength and intensity of the down-move likely wasn't increasing, but rather it was just a slight over-eagerness of the sellers to reach 3378 a little quicker as it began to appear in their sights. Hence, an over-extension. I didn't intend to imply that the light purple line provided any resistance, but it is merely a way for me to better understand the current price behavior.
I don't claim to make authoritative statements about the validity of using these concepts to anyone, but they are merely tools I use as I have seen them play out time and again over the course of my observations and study.
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Also, on a side note, I took and annotated your chart for the day. It is quite amusing to see us both learning the same material, but reacting to it in such different ways. Not that either is right or wrong, but its just interesting to see your personality and personal touch at work, especially when it is so different than mine. Always a pleasure.
I've been watching that channel for weeks and weeks, if not months (thanks to you, of course). I know its been mentioned here or the other thread if not both of them. I had that sell order loaded at the open - only had to wait about half an hour to get it.
