LittleMac,
Here is my interpretation of DBTK. Take it for what it's worth as you can tell by my last post that I'm very much a beginner and not as far along as you. I moved your channel lines over a bit (red and green lines). I like to draw the channel as if I'm looking at it on the day that the FTT occurred. In this case then, the BO would have been three days ago, and today's action would be a volatility expansion of the red down channel. But perhaps this is just symantics and doesn't really matter much as long as it gets both of us in the same place.