It helps to understand just what climactic action represents, the difficulty sellers have in finding an ask that buyers are willing to pay, and if sellers become desperate enough, they may, as with a parabolic move, have to lower their asks substantially (if one looks at a tick chart, he will see the gaps that occur during these rapid and dramatic moves). At some point, for whatever reasons are important to them, enough buyers will step up to halt this movement, and sellers and buyers can once again find equilibrium. None of this means that buyers are right, it just explains the dynamics of the movement. If enough buyers step up and sellers are again able to get their prices, price will reverse. But if there aren't enough buyers to absorb what sellers want to sell, price will then resume the decline.
For NQ the price is hovering around the 50% level. One other thing to note is that the price is not close enough to any TC extreme. Both these aspects dissuade me from engaging the market for now. Why play with lower probabilities and try to do something when patience and inaction are prescribed according to the plan? On the weekly we can see a potential horizontal S/R. Price hasn't shown a tendency to get whipped away from this level so the idea of it being an extreme or a S/R is waning. Due to the lack of clarity again I am going back to the protection and preservation of my capital mode. It is wonderful to sit out and observe until the situation turns favourable. Those blindly following SLA still might be able to make money. It's just that the potential for whipsaws is greater. Yes, they could also catch a big drop or rise but the odds of that happening are lower around here. Combining SLA with AMT where only the juiciest entries are initiated is easier for the account and the psyche in my opinion. There's a reason SLA-AMT has been named as such and not in isolation. If someone has a plan to deal with these tumultuous waters they are most welcome to attempt their luck. I plan on riding the wave down when it's higher and close to the upper extreme and ride up when it close to the lower extreme. The wave for me is neither high enough nor low enough to do much for the time being. Gringo
Seeing what so many people have done with the SLA has been an interesting experience. I've known for years just how fearful most traders are, and I've known for years how difficult it is to overcome these fears, much less dissipate them. But when I see how the SLA is so often implemented, I have to wonder if I should have called it the GAS (Grasping At Straws). It helps to remember that all of this stems from Wyckoff: trend lines, demand lines, support lines, equilibrium/balancing, springboards. Focusing on the SLA without incorporating any understanding of where it came from is not unlike following a recipe without having any knowledge -- much less understanding -- of food chemistry (why do the eggs and butter have to be at room temperature?). 80, for example. 80 was particularly important yesterday, and this morning price turned at 80 almost to the tick. But no one, it seems, wonders why. And wondering why is perhaps the chief reason for 40D's success. And yours.
4408 might be getting ready to give a long entry. One has to see if demand asserts itself here or gives up again. Reassert would mean the probabilities for up increasing.
I don't trade in the middle and this is to show with some coherence as to how one might make a decision beforehand. Not that the beforehand and foresight analysis dispelled any concerns in the past! It's more for those intra-day gunslingers. Edit: 1:53pm: Demand hasn't shown up with conviction. Just holding price but not rushing in. Strength is not there.