Iterative Refinement

ES Daily - January 15/2008
Last bar forming is for the 16th.
Adjusted volume bottom pane.

 

I understand that their can be multiple ve's in a row and also flaws can and will materialize. My point , which I seem to be having a hard time articulating is what I feel to be the importance of the original LTL and how price and volume levels react at the original LTL. To me, the LTL helps in my continuation /change mindset and future price anticipation. I was wondering if others had used or noticed this.

In my chart, I am not looking for point 3 immediately following a ve.

Hopefully the re-annotating clarifies my opinion

 

Lookin for a breakout in STAR tomorrow of the current red channel. Looks like the FTT lines up to me with the fast stochastic and the decreasing black volume is in place. hopefully we see increasing black volume for the next few days confirming a BO.

Comments and comparisons welcome.

 

Hopefully this chart will help clarify what i'm trying to say.

 

However you call it, aren't we just looking for a breakout of the triangle on increasing volume?

regards,
Ivo

 

01-15-08

 

Well if it breaks out with increasing volume everything is fine however in some cases that is not the case.

- Sometimes price breaks out of the formation on low volume and the increasing volume comes once price has moved away from the formation.
- Spyder has also mentioned how lateral formations and lateral movements are distinct things. Differentiating them provides important clues and hence I would consider it significant.

http://tinyurl.com/3xrck5

 

Thanks for the lucid drawings bi9. So would you say that c, d and e are all pennant BO's? Then with bar 4, there must be a close above the high of the first bar for a lateral formation BO (a,b,d,e) and for c it would be called a lateral movement BO (or something like that)? (Edit: Let's assume that in all cases the volumes are higher than bar 3).

lj

 

c & e are pennant BOs. d is not a BO since it did not clear the high of the prior bar.

I would agree with your statement except to note that I would add "b" to the lateral movement category instead of lateral formation.

 

Partial quote from bi9:
c & e are pennant BOs. d is not a BO since it did not clear the high of the prior bar.

That makes sense to me. Now let me ask one more question. Can you anticipate which of the five 3-bar entities would be more likely to go on to give a full-fledged BO and close above the high of bar 1? My guess is that it would be either c or e and with "comparable volumes for the 3-bars" would pick c because it has the pennant BO and a "tie" with b for the greatest pace - but I don't know.

lj