Follow up on the ES daily chart. Daily bar b/o of major down channel on increased black volume. Now see if it stays a b/o or turns to an fbo.
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Spydertrader's Jack Hershey Futures Trading Journal
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Quote from Avi 8:
During a price cycle we travel around the Jokari window in a figure eight.
In a channel we go from pt1 to pt2, which is shown as lower left to upper right as we BO of the old channel's RTL (for an up channel or long), the opposite occurs in a down channel (upper left to lower right).
See arrows in attached
<img src=http://elitetrader.com/vb/attachment.php?s=&postid=1704868>
During an apparent failure we would travel from the green shaded box (as volume decreased we expect a change in price direction) back to the box on the left (volume increasing with price CHANGING direction again). This occurs during 'flaws' and retraces when viewed from a larger fractal.
This has been presented before, I believe in the msn group.
Avi 8, what you say in the text about P1 to P2 movement does not match what you have annotated nor does it match what has been said previously (see attachment). With that clerical correction in place, then what you say about the failed Jokari scenario makes sense to me and involves a movement from the lower right quadrant to the lower left quadrant. One would then be "back in the cycle" again.
What is not clear to me is what the time frame for application of the "Jokari Expectation" is. In the example being discussed (see attachment) there is a fall in V with bar 3, implying that price should increase (price increase = close > open of the same bar), but does this mean that price should increase with the very next bar? Is the "Jokari Expectation" simply that we should anticipate price increasing "soon" (as opposed to the very next bar)? As things turned out price did increase on bar 5 but maybe some other time might have waited till bar 6.
Put another way, "Do we apply the Jokari Expectation immediately after the close of (in this case) the 5 min ES bar? Or is it a case of "We know this is going to happen within the next couple of bars"?
TIA
lj
PS: Your remarks the other day re the daily ES were definite keepers.
Since the Jokari window has been coming up lately, thought Iâd post with regard to some questions Iâve been trying to work out. Itâs been mentioned that volume is twice the frequency of price.
http://www.elitetrader.com/vb/showt...highlight=price volume frequency&pagenumber=7
http://www.elitetrader.com/vb/showt...6&highlight=price+volume+frequency#post411446
If volume has twice the frequency (period) of price, then shouldnât there be two gaussians for every price cycle? To be consistent with this view volume would trough with price, peak while heading up with price, and trough or pause at the price peak. Then it would increase again as price is heading down, and dry up at the price trough.
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1705238>
http://www.elitetrader.com/vb/showt...highlight=price volume frequency&pagenumber=7
http://www.elitetrader.com/vb/showt...6&highlight=price+volume+frequency#post411446
If volume has twice the frequency (period) of price, then shouldnât there be two gaussians for every price cycle? To be consistent with this view volume would trough with price, peak while heading up with price, and trough or pause at the price peak. Then it would increase again as price is heading down, and dry up at the price trough.
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1705238>
Attachments
Maybe the cycle referred (1:2 ) to isnât the R to L to R movement in the channel but on a larger scale, the channel itself? This though was sparked by a post by MAK:
http://www.elitetrader.com/vb/showt...536&perpage=6&highlight=channel&pagenumber=64
When we look at the Jokari window with price and volume it seems that itâs a 1:1 ratio there.
Jack mentiones here that it is a 1:2 ratio:
http://www.elitetrader.com/vb/showthread.php?s=&postid=399895&highlight=jokari+window#post399895
If you stretch the Jokari window out and plot it you can get a better idea of the wave progression using P/V. The part of the sine wave in the box below/above the P/V description is âwhat you would expect next.â (Although on decreasing volume price might move laterally)
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1705240>
http://www.elitetrader.com/vb/showt...536&perpage=6&highlight=channel&pagenumber=64
When we look at the Jokari window with price and volume it seems that itâs a 1:1 ratio there.
Jack mentiones here that it is a 1:2 ratio:
http://www.elitetrader.com/vb/showthread.php?s=&postid=399895&highlight=jokari+window#post399895
If you stretch the Jokari window out and plot it you can get a better idea of the wave progression using P/V. The part of the sine wave in the box below/above the P/V description is âwhat you would expect next.â (Although on decreasing volume price might move laterally)
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1705240>
Attachments
Inside a typical channel we see one volume cycle per price cycle.
Think about a retrace in an uptrend, a series of declining volume bars. If every bar is declining in volume does that mean price should change after every declining volume bar? Not necessarily. Weâve either had an FTT, or are in a flaw or retrace (volume levels are a clue). We would expect a return to trend at some point or a reversal of trend and a new channel. The increasing volume will show which one. Change to continue up, or a change of trend to down and a new channel.
What about in an uptrend, if after an increasing black gaussian (P=UP, V=UP) we get an increasing red volume bar? It looks like weâve skipped part of the sequence. WWT? WTF? In most cases weâve probably had an intrabar gaussian shift or its part of a flaw (HVS, etc). Flaws are a break in the sequence.
This graph might be harder to follow, but it illustrates what we see happening in a trend, or when we get a R2R shift, according to the Jokari window. When the trend continues we miss one part of the window. Remember, the part of the sine wave in the box is what we expect to see happen next given the current P/V condition. Hope this is helpful rather than confusing. - EZ
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1705241>
Think about a retrace in an uptrend, a series of declining volume bars. If every bar is declining in volume does that mean price should change after every declining volume bar? Not necessarily. Weâve either had an FTT, or are in a flaw or retrace (volume levels are a clue). We would expect a return to trend at some point or a reversal of trend and a new channel. The increasing volume will show which one. Change to continue up, or a change of trend to down and a new channel.
What about in an uptrend, if after an increasing black gaussian (P=UP, V=UP) we get an increasing red volume bar? It looks like weâve skipped part of the sequence. WWT? WTF? In most cases weâve probably had an intrabar gaussian shift or its part of a flaw (HVS, etc). Flaws are a break in the sequence.
This graph might be harder to follow, but it illustrates what we see happening in a trend, or when we get a R2R shift, according to the Jokari window. When the trend continues we miss one part of the window. Remember, the part of the sine wave in the box is what we expect to see happen next given the current P/V condition. Hope this is helpful rather than confusing. - EZ
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1705241>
Attachments
Maybe the cycle referred (1:2 ) to isnât the R to L to R movement in the channel
My guess on this is shown in the attachment. If one defines a "long-short" price cycle as price moving from one value to some higher value and then back to the original value then this stuff falls into place. This is an idealized price cycle since it is improbable, not the least because of ongoing market "perturbations", that price is going to return to exactly where it started out from.
Thanks Ezzy for providing those great linx. It was interesting to read how Jack got started in this endeavour.
lj
My guess on this is shown in the attachment. If one defines a "long-short" price cycle as price moving from one value to some higher value and then back to the original value then this stuff falls into place. This is an idealized price cycle since it is improbable, not the least because of ongoing market "perturbations", that price is going to return to exactly where it started out from.
Thanks Ezzy for providing those great linx. It was interesting to read how Jack got started in this endeavour.
lj
Attachments
My interpretation is that the asymmetrical relationship between price and volume is the effect of the channel slope. You can notice gaussian peaks on both trendlines of a lateral channel. As the the slope becomes non-zero, one of the peaks gains in amplitude, while the other one decreases.
What we see on the chart is the effect of the superposition of several fractals of sentiment, from which usually only a couple are relevant.
When you look at the price movement in real-time you notice periods of acceleration which coincide with peaks of volume and of deceleration which coincide with low activity levels.
In the proximity of both trendlines there is a short period of activity reduction (low volume), causing a price movement pause. It is just easier to notice it by the right trendline, because of the overall lower pace there. This is the signal of change in sentiment and in price direction.
What we see on the chart is the effect of the superposition of several fractals of sentiment, from which usually only a couple are relevant.
When you look at the price movement in real-time you notice periods of acceleration which coincide with peaks of volume and of deceleration which coincide with low activity levels.
In the proximity of both trendlines there is a short period of activity reduction (low volume), causing a price movement pause. It is just easier to notice it by the right trendline, because of the overall lower pace there. This is the signal of change in sentiment and in price direction.
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