At the hard right edge, buyers are telling me they're no longer willing to defend the level of value up to that point with as much ammo as they were earlier in the boxed action. Sellers are not yet getting aggressive.
Trading Price:Phase One:Observation
- Thread starter dbphoenix
- Start date
At the hard right edge, buyers are telling me they're no longer willing to defend the level of value up to that point with as much ammo as they were earlier in the boxed action. Sellers are not yet getting aggressive.
As I did not see the bars being formed, Iâm somewhat disadvantaged
Be that as it may
2 potential scenarios (which to anticipate would be clearer had I watched the PA actually unfold)
Notes;
Up bars â more of them â and shorter
Down â fewer â and longer
Scenario 1;
Controlled buying â to a point.., then slammed down for a better price â ultimately price heads up
Scenario 2;
Price fights its way up only to be halted and slammed down â shorts entering w/ fervor â ultimately price heads down
If pressed to pick one scenario over the other â scenario 1
RN
Be that as it may
2 potential scenarios (which to anticipate would be clearer had I watched the PA actually unfold)
Notes;
Up bars â more of them â and shorter
Down â fewer â and longer
Scenario 1;
Controlled buying â to a point.., then slammed down for a better price â ultimately price heads up
Scenario 2;
Price fights its way up only to be halted and slammed down â shorts entering w/ fervor â ultimately price heads down
If pressed to pick one scenario over the other â scenario 1
RN
Supply is over taking demand. Price is making higher highs and lows leading up to the range. We can see that the upward stride of the market is halted after the rejection around 3705. If I look at all the bars at the bottom of the trading range I can see that every time sellers pushed price down around 3700 buyers got aggressive. Looking at the last 8 bars we see a push up that barely exceeded the previous tops before being rejected again. During the last 7 bars price is literally hanging over the 3700 level without any sign of buyers stepping in. We can also see that the range of the bars is compressing. There was a "springiness" at this level which is no longer present. Buyers seem done fighting over this level.
DBP - I really appreciate what you are doing here.
DBP - I really appreciate what you are doing here.
The market is telling me to wait as it has not shown it's hand yet. It could do anything from here.
...I guess you could look at this as a series of reversals.
this could be a very interesting thread for how people see the same thing differently and how they then react........
with regards the red box only.....this is assuming I have no previous plan or context.
It has hinted at higher highs, and higher lows within the box, but rejection of these is irrelevant without context
Buyers and sellers both have no conviction for continuation in any direction....the market is telling me to wait.
with regards the red box only.....this is assuming I have no previous plan or context.
It has hinted at higher highs, and higher lows within the box, but rejection of these is irrelevant without context
Buyers and sellers both have no conviction for continuation in any direction....the market is telling me to wait.
It's disappointing that only 10% of those who viewed the chart have chosen to step up, but, statistically, that's not unusual. That doesn't mean I'm going to stop doing it. But I do suggest that those who actively engage these sorts of exercises, much less the market, are more likely to win than those who stand aside and wait for somebody else to provide them with "the answers" (keep your eyes on your own paper).
To begin with, words such as "fight" and "battle" and "war" should be eliminated from one's trading vocabulary. Including these words accomplishes little to nothing other than to introduce the ego into the equation, and this must be avoided at all costs.
Context is not hugely important here. One can see that price had been moving up and that traders for whatever reason rejected 1705. And since everyone knows that this is what preceded yesterday's open and what happened in the NQ yesterday, there's no point in going forward with this particular day. That's the wide and deep pitfall of hindsight analysis. But the focus here is not on what's going to happen but on what's happening at the moment. One therefore need not have any foreknowledge of what's to come.
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.
To begin with, words such as "fight" and "battle" and "war" should be eliminated from one's trading vocabulary. Including these words accomplishes little to nothing other than to introduce the ego into the equation, and this must be avoided at all costs.
Context is not hugely important here. One can see that price had been moving up and that traders for whatever reason rejected 1705. And since everyone knows that this is what preceded yesterday's open and what happened in the NQ yesterday, there's no point in going forward with this particular day. That's the wide and deep pitfall of hindsight analysis. But the focus here is not on what's going to happen but on what's happening at the moment. One therefore need not have any foreknowledge of what's to come.
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.
DBP - I see that I have a lot of jargon that I have picked up while studying this stuff on my own (smart money, no demand, upthrusts, war analogies). I'd like to clean up my vocabulary so I can clean up my thinking. Based on your reply above I feel like I was seeing the right change in buying behavior (although without much confidencde) The term that I used - supply overtakes demand - is this the proper use of this term or should I try avoiding labels all together and just stick with descriptions of behavior?
The latter.