A hypothetical Institutions quarterly re-balancing of 401Ks â reliable $s Smart money used that event as a way to book profit without upsetting the proverbial apple cart Now weâll see if they want to reinsert that money Simply a hypothetical mind you RN
DbPhoenix's first post was a series of 3 charts. I will upload one to this post, and then make two more posts back to back so you can see the three charts. I will post them in the order he had posted them in his first post to this thread.
Want to thank you guys for all the work that's going into it to keep it alive, posting old charts, etc. Been a good read so far.
Yesterday presents a good opportunity to review a few principles, and since the thread is now long enough that few people will read it, this is a good spot for such a review (those whose interest is piqued can then read the thread, as well as the Making Of A Method journal). The hinge that prompts all this activity was posted yesterday before the open, an hourly chart. The apex of it is included to the left of this one, a 5m chart (I'm using a 5m bar interval in order to cram everything into the space). The important factor here is the midpoint of 72. Price drifts upward out of the hinge well before the NY open. If one is awake, this is as good a time as any to go long if one is aware of the likelihood that price will typically feint in one direction or the other in order to discombobulate the inexperienced wannabe and he is prepared to exit at the first sign of this behavior. In this case, price doesn't really get serious until it gets closer to the "open", when it busts out of this drift and makes its way toward 82. Sure enough, this is a feint, and price drops back toward the midpoint of the hinge at 72 (these midpoints can and often do act as support or resistance depending on the direction price is traveling when they are reached, though price can also take off in the direction opposite to that which it was moving originally, in this case, down, past the midpoint and on its way to who knows where; this is not a problem as long as one is aware of the possibility). Price stops just short of the midpoint, possibly because there are traders who are aware of it, or there may be indicators that tell them to do whatever it is they're doing, or they're just trying to "catch the bottom". None of this matters. If they want to create a bottom in their efforts to "catch it", great. That provides you with the opportunity to jump in at vastly lower risk, stepping over the bodies as it were. Price then takes off for real, eventually reaching the previous day's high. That this acts as resistance is not magic, not does it imply that those who bought or sold at yesterday's high are in any involved in all this. But the previous day's high is a fact, regardless of the bar interval one is using. Even those who view only daily charts will see it. Therefore, it takes on a certain importance, imaginary or otherwise, and those who aren't entirely clueless will expect something to happen there. If you're aware of these possibilities and how to take advantage of the opportunities they present, you're cool. If not, you're not. You're already long, so the number of choices you have to make is less at the outset. What you're primarily concerned about is whether or not you should stay long and, if not, when you should get out. Here (a) price hits resistance, (b) breaks a demand line, if you're drawn one, (c) makes a lower high 15m later. That should be enough to prompt an exit, if not a short. Price then hesitates at resistance cum support at 82 before plunging rapidly past the halfway point of this upmove on its way to 76, too serious a downmove to tempt another long. It makes one effort to get past 80, and though this may tempt the unwary, it fails rapidly, possibly because a lot of unwary took it then panicked. It holds just above the opening congestion, then resumes its fall to, eventually, the previous day's low. Here buyers have provided "preliminary support" to slow the decline, then put in a bottom at the PDL. Since there's no compelling reason in the "price action" to stay short (though the possibility of re-entry is always on the table), you get out and either take the reversal, if you can stand the heat, or wait for a retracement, which in this case comes 25m later. Price then gets past the 50% "barrier" of the downmove from 86 to 67, but while others are wondering if they ought to go long, you're already long, and have been since 68 (or 72). This breach of the 50% level fails quickly, however, and there's no long entry opportunity anyway, plus your demand line -- not drawn -- gets broken. Price then drops back to the 50% level of the upmove from 67 to 78 and just hangs there, suspended like a fly in a web. If one had gone short when price failed to hold at the top of the just-failed upmove, he might choose to exit given the uncertainty that price is exhibiting and given the lateness of the hour. He might also choose to trade this trampoline action, but after being stopped out twice, he'd best exit and count his money (while many wannabees will thrash around and grab at straws, there are really only 4 or 5 compelling trades here, and all of them are profitable if one knows what to look for, can recognize it if and when he sees it and remains calm, which he is more likely to do if he knows what to look for etc). I keep reading these posts of failure and frustration and years of struggle and I really don't get it. I assume they stem from a complete lack of interest in how and why price behaves the way it does, but if one has no interest in that, why bother to trade in the first place?
After a strong push to the downside that took us out of the TR from the last days, sellers found moderate buying between 3040 and 3050, this slowed the pace of the fall after the close, but the downtrend was still active until this morning when the SL from PDH was broken. Now, after having exited the channel buyers have been able to hold their position and are pushing towards R at 50. We´ll see if they can make it.