What are the tools and procedure/process you use to determine the end of a mark up (or market down)? Specify whether your tools and procedures determine the price only, or the time and price at which the markup/markdown ends.
I use a signal (a derivation) of CCI that nails it everytime. <a href="http://tinypic.com" target="_blank"><img src="http://i31.tinypic.com/23sumnl.png" border="0" alt="Image and video hosting by TinyPic"></a>
Volume. Price can only keep on going up on increasing volume and can only keep on going down on increasing volume. regards, Ivo
For an upward trend ending when Jim Cramer said BUY. And for a downward trend ending when he said SELL.
unless you have an indicator of "mood" of crowd or a crystal ball, you can't predict the end of trends BECAUSE: Let's say that at this point, after a bullish run up, the entire market is long therefore no more demand and things should come down, right? Wrong! There are people on the sidelines waiting and they are actually the ones that will tell if the trend ends here and contribute to the sellout or they buy some more, resuming the trend. So, the people on the sidelines have no effect on the market whatsoever, until they come in. Thus, having no effect on the market, there is no indication of what the market shall do next. One can only assume based on circumstances and what happens in the present moment (read price action and market structure) and take his bet not risking his whole stake. Cheers and stop looking for nonsense.
How to Identify a Change in Trend - Easy as 1-2-3 In the book Trader Vic - Methods of a Wall Street Master, Victor Sperandeo mentions three rules for correctly identifying a change in trend. Here they are as follows: Step One: The Trend Line Break The first thing that you want to look for is a trend line break on a correctly drawn trend line. The trend has not changed yet. This criteria gives you a heads up on a possible change in trend. Step Two: Retest and Failure After the trend line has been broken, the stock will rally but fail to move above the prior high. The trend has not changed yet. We still need one more criteria to confirm the change in trend. Step Three: The Confirmation Finally, the stock moves below the prior swing point low and the change in trend is confirmed. This example is for a stock that is moving into a down trend. The rules are just reversed for a stock that is moving into an uptrend. Also, here is a quote from the book: If two out of the three conditions are met, the chances are good that a change in trend will occur. If all three conditions are met, the trend change has occurred and is most likely to continue in its new direction. These rules won't work 100% of the time, but I think you will be impressed by how often it does work. Pull up any chart and test out the rules. See if you could have anticipated a change in trend. Also, try it out on weekly charts and intra day charts.