Spyder, I would greatly appreciate a graphical reference to the chart points you are referring to in your above post from 05-15-08 05:20 PM EST. You make some very important points regarding the geometry of the market and one's expectations. I want to understand the application to the 14:30 area of 5/15. Here is Ivob's post to which you were responding which contains his chart, but from the context of your statements I don't think this is the entire period of your reference, if at all: http://www.elitetrader.com/vb/showthread.php?s=&postid=1922687#post1922687 Here is Romanus' original chart of that day for reference: http://www.elitetrader.com/vb/attachment.php?s=&postid=1925056 thanks in advance. edit: having trouble with links
Spyder: If the error made here was to not prepare for other scenarios to play out than the one Ivob expected, then I fully understand your meaning. If, however, at the point in time shown in the attached chart, one should not be expecting a pt2(S) to arrive soon and then a retrace to pt3(S), (which would violate the WMCN after the Lateral BO you referenced and immediate continuation down) then I (and likely others) am missing something in the context. You said recently "Learn 'context' and how context 'filters' the signals provided by the market". Is this going on here? Again, thanks in advance for any clarification.
I don't think there's any logical way to consider lateral movement across multiple bars as anything other than continuation, since change is a single bar event, as in as long as you're driving you have a continuation. But once you stopped (change) you stay still (continuation). In other words change does not have a duration, where continuation does. Even applying it bar to bar I don't see how it's possible for lateral movement to signal change: http://www.elitetrader.com/vb/showthread.php?s=&postid=1924249&#post1924249
In order for a Trend Change to have occured (and not simply increasing Volume due to a BO of a Pennant (or as in this case, a Lateral Formation), what must come next? More increasing red Volume. Since WMCN did not materialize, we expect the Trend to change. Three scenarios exist where increasing red appears within an uptrend without signaling a change in Trend. This was one of those examples. Note the following bar after the BO. - Spydertrader
Without looking at ivob's chart, I cannot say for sure but it appears as if (for some reason), I answered the question based off a completely different time period of the day. If ivob could repost his chart, I could provide a better answer. It may be as simple as I looked at the incorrect bars. - Spydertrader
Clicking the link you provided does not bring up the chart posted by ivob (at least on my computer screen). See attached. - Spydertrader <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1926318>
Is Trend in this particular sentence refers to the down trend represented by red bar that broke out of the Lateral Formation on increased volume? Thank you.
Unfortunately due to a health issue, I have spent a long week in the hospital and have just returned home. I look forward to posting daily charts again this week. Spyder, thanks for the very kind words.