Trading Price:Phase One:Observation

Here's another. The numerals are there solely for reference, i.e., to enable whoever wants to comment to point to a particular bar or set of bars and not get lost (e.g., bar #27).
 
At bar 10, price can't make a HH and has also made a HL - area of value found. At bar 14, price again can't make a HH and also makes a LL - signaling that price is moving down.

At bar 17, price gets to 64, but doesn't hang around. At 20, price has rebounded a bit, but hasn't gone above the LSH. Sellers try to push price back up, but buyers only let it get to just shy of 68 before they'll no longer deal. Buyers try to get price back down to 64, but are unsuccessful. A series of LHs as sellers push price up (to bar 30) and past the LSH of the down movement.

There's a RET and price marches all the way up to 76 with just slight pauses along the way. Price gets to 76, exceeds it barely and then sharply falls back. Since there wasn't much resistance on the way up, there wasn't much support on the way down. Buyers get price down to the 66 area, but sellers push it back up to 72. 68-70 is a popular area.
 
Looking at bar 1&2, bar 6 and bar 10 we see sellers can't find buyers below 67 and buyers can't find sellers above 69. Bar 13&14 show that sellers are becoming more aggressive. From bar 15-21 we see buyers attempt to rally higher again met with aggressive selling at 22. Sellers seem to be in complete control but there is no follow through in the next few bars with 26 suggesting demand has entered somewhere around 65 (and leaving a HL).

Price climbs steadily higher until bar 42 where a lack of buying causes the market to move swiftly lower. At 47 price accelerates probably from a lack of buying and liquidating longs. 3668 is swiftly rejected. 50 -53 shows that sellers are meeting the demand. Sellers are in control of this market.
 
Double bottom at 20. Strong trending move which exhausted at 40. Buyers bailed and retrace more than 70%. Short covering back to 50. Expect downtrend to continue as last retracement around 50%.
 
While this is not normally how I think, and I generally dont look at time charts - but its an exercise, so sticking with the theme (with a slight The Wanders movie tack)....


bar 20
sellers got pissed that buyers somehow ramped the breakdown at 66 (bars 14-15) back into the range (bars 1-14) and so they thought we will show you m...fers.
so bar 22, they wacked it back down just to stick it to them.
Problem was - bar 24 was not meant to happen so quickly - why was there no continuation - the buyers had said "straight back in your face and back above the 66 level." for a 2nd time....turns out there might be legitimate buyers down here.

The buyers said lets see what happens now, you sellers wanted to whack it again, but hey - where is the follow through?.....you talk tough but cant back it up. A line in the sand has been drawn.

So someone tics it back down to the buyers, but it was probably a feeble attempt to see who blinks first, but enough to awaken the 'trouble maker speccy Netherlands' buyers thinking - hey, there are probably some buyers here (they pushed it back into the range), the sellers are ticking and acting like pussies.
Lets see what happens if as a buyer I (not me) push back a little and tick it up.

Off she goes, short sellers cover, the buyer at 66 and the followers have a little panic chase and she races up. Bar 42 gives the game away, as an indication these squeeze is done. The larger buyer is probably still down around 66, but the buy and flick guys have hit and run.
Bar 48 -49 - sees sellers not willing to try and push it again, while buyers are pumped up on sherbert fizz and try it again.
This time, the patient sellers are waiting.
So you probably have some sellers above 70 and a 'potential' buyer at 66, - 2 lines in the sand - but as this would be the third time the sellers are knocking on their door, they are pissed off, and will not answer this time unless the prices are better/lower.
or , they really decide to get aggressive, up their limits and start pushing the sellers above 70....but as its all pre market shennanigans and territorial pissing comp, its really a waiting game until the big boys open and get out of bed.

winner in the end gets the girls and drives off in a Cadillac. (Or for the PG version has a milkshake)
 
Before (10), sellers were pushing but without much conviction, this motivated buyers to take a chance and try to make it higher but failed to even reach the previous top, this was a new opp for those who saw an opportunity to the downside to take prices down, it was not a rapid fall, but they managed to make new lows.

Their attempt was rapidly rejected and prices rose rapidly signaling anxiousness of those who just sold to cover their shorts.

Then buying just stopped, there were no more people interested in this, not even at the previous high. This third attempt was all sellers need to gain the conviction to sell at whatever prices were being paid and this motivated a break outside of this value area around 68.

Prices fell but hit a wall at 64, there were simply no more people interested in selling below this price, who knows why, given what had happened before buyers were shy at first , but after the stride of this last downwave was broken buyers started adding conviction (20), it was enough to bring the stride of the downtrend to a more sustainable level, but not enough to start a new trend. Feeling that not everything was lost, those who did not have a chance to sell before sold and those who were making some bucks decided it was time to sell again. After all 68 was good for buyers before, why weren't any more buyers interested anymore at this levels.

This last pushed of sellers at first appeared like renewed selling interest, but then there were no more sellers interested below 64, it was a sale minutes ago, so again those who missed the first bus managed to get back in (23).

But buyers at first were hesitant, did not want to bid up this thing, were waiting for sellers response, after all the downtrend was still active at the time. At (25) after realizing that those sellers they were awaiting were not gonna show up, they decided to take a risk and bid up prices fast, by the time sellers reacted it was too late a new trend had emerged.

At (30) some buyers who thougth they were still under the influence of the 68 value area decided to ligthen their positions or just close their trades, but even though the managed to move prices lower it was just an opportunity for those with faith in the trend to tag along.

When everybody started seeing the price increase, more an more fans joined the party, but then it looked as if those buyers were overexcited(40), some realized there was no reason to pay 76 for something that just minutes ago was worth 68, some considered that they had enough winnings for a day, some even thought that it was the moment to short, the fact is there was selling interest at 76, selling strong enough to take prices down without finding much demand.

So, if 76 was too expensive perhaps lower prices were fairer, now some of these sellers thought that price was 72 and decided to buy, perhaps other buyers also decided to get inside because of the discount, but they weren't enough to make a difference, so prices just retraced and kept on falling all the way to 67, back where at the beginning of the day everybody agreed was a fair price.

There, once again there was a one in a life time opportunity to join the uptrend, or at least somebody must have thought that in order to bid up prices all the way to 72, remember 72, where minutes ago some buyers had stepped in, perhaps some of those buyers who got really spooked with their just recovered drawdown decided this market was gonna get them and decided to close their longs and stop their misery (50).

From there sellers gave it another try, perhaps they could just convince everybody else that 68 is just too much for this, but given the information in the chart there is no way of knowing if they were right.

Note: Numbers in parenthesis correspond to the bars in the charts
 
dbphoenix said:
Price stops falling in the fifth bar in the "box". Why, we don't know. Doesn't really matter. But sellers couldn't find buyers below 3699, the bottom of that bar. And the rejection did not waffle. There is then a series of overlapping bars until the next attempt, 20 bars later. Sellers can't find buyers below the low of this bar either, and it's higher than the low of the first excursion down. Do we detect the aroma of strength? Then more bars, more or less overlapping though concentrated in the upper half of this range, which also suggests strength, followed by a sort of dribble down toward that old 3699 level, only this time it takes two to three bars to get there. There's no plunge here, nor is there anything more than a mild rejection.

So who's got the upper hand? Who's in charge? It's generally believed -- why I don't know, gurus and books probably -- that when price falls, sellers have the upper hand. When price rises, buyers do. But it is the exact opposite that is the case. Traders are looking for trades, preferably profitable trades. That's pretty much the point of all this. They're not fighting each other. They're not at war. How can one complete a transaction with somebody with whom he's fighting? So when price prints at lower and lower levels, it is buyers who are in charge because they are declining to pay what sellers are or had been asking and are instead insisting that sellers lower their prices. If sellers have to lower their price in order to complete a transaction, this is winning? On the other hand, if buyers are opening up their wallets and saying "here" to the sellers who are asking higher and higher prices, who's winning and who's being played?

I suspect this is what buyers have in mind during those last few bars. They're willing to pay what sellers are asking but only if sellers are willing to offer a better price. At the same time, they're suspicious. If they were gung-ho, they'd be willing to pay whatever sellers asked, which would drive price higher, perhaps even to a new high, in which case everybody would win, at least until the music stopped. But that's for another time.

Sellers, then, are willing to take less for what they have in stock. Buyers are willing to take what sellers have but only at lower prices, though they're not throwing everything they can get their hands on into their shopping carts. Looks to me, then, that buyers, while willing to trade, suspect that they are about to get screwed. And since the professionals sold what they had on the way up (though buyers probably don't know this), there is very little support under this dance floor in case somebody fires a shot and stampedes the cattle.
More...

Hmmm. I'm going to have to chew on that one for awhile. Another one of those things where I kind of understand that, but I definitely don't own it. How does one apply this knowledge to the observation phase? When prices are dropping buyers are essentially in control because they are waiting for the price they want once they realize that sellers will have to offer higher prices after the buyers come in? Basically demand overcoming supply? Once prices begin to rise sellers take less offering a higher price as long as the demand continues to increase? Then comes the point where prices are rising and sellers are in control now bc they are waiting for their price to sell at and once that happens buyers have to take less by lowering the price at which they sell at? Once that shift happens in both aspects that's where the trend changes?

My mind is a bit blown at the moment, but that's a good thing.
 
dbphoenix said:
So when price prints at lower and lower levels, it is buyers who are in charge because they are declining to pay what sellers are or had been asking and are instead insisting that sellers lower their prices. If sellers have to lower their price in order to complete a transaction, this is winning? On the other hand, if buyers are opening up their wallets and saying "here" to the sellers who are asking higher and higher prices, who's winning and who's being played?
More...
Ok my dad owns a grocery store....So what I gather from this line is that if milk prices are dropping it's a buyers market because the sellers of milk have to drop the price of milk until buyers want to buy. I get that in terms of goods and what not, but if I sell the high of the NQ and sellers continually have to lower their prices in order to find buyers aren't I winning?
 
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