I dont see why the blue traverse is not valid... Clearly the previous bar is about half decreasing black, making that next bar increasing black... Also possible that some end effects are messing with things mucking it up
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1975102> The first pink short traverse set the dominant trend direction and required a non-dominant move up to complete the anticipated red short channel. The blue RTL started as a tape after the pink FT3, and the move up became the size of a traverse. This provided the non-dominant traverse required for the red short channel. The black OSB marked pt3 found support nicely on the "blue tape that grew into a traverse" RTL and I am going to speculate that Spyder, at this point intrabar as the dominos were falling, anticipated the bar would create a proper pt 3. The reason this OSB signaled change back to short is because it closed as lateral movement. WMCN for long clearly didn't follow through. Then perhaps Spyder forgot :eek: to remove the pt3 annotation and de-emphasise the blue trend line back to tape weight. Or, more likely he left it in for "educational purposes". He also failed to eliminate the green tape lines originating on the bar before the OSB. In any event he created the discussion and we are learning from it.
In my opinion they don't translate on the daily fractal. Would you please explain what was your reason to draw the blue channel? It doesn't seem to satisfy the known definition for a pt3 channel. We know that between pt1 and pt2, and pt2 to pt3 we have three possibilities for volume, but after pt3 only one.
Could you elaborate a little bit, because here's an example of OB that closed as lateral movement but signaled in the opposite direction. Or did you mean it signaled short because WMCN did not materialize.
Your blue channel doesn't seem to show increasing red after pt3, so ... Regarding the OB, this shows increasing (black) volume, while MELI shows OB with decreasing volume. Jokari ...
For the sake of clarity, the debate of whether or not there is pt3 up channel should be separated from the analysis of the signals provided by the market. Spydertrader posted that chart to alert LittleMac of the changes that no longer supported being long in that stock. The chart clearly shows pt3 red down channel, which makes it unreasonable to hold long position. As far as blue pt3 up channel, I think the market had spoken clear enough that it is not valid since there is no increasing black volume on daily chart at or after the annotated blue pt3. Any guess is as good as mine as to why Spydertrader chose to annotate those blue lines on a chart, but he is the only one who knows for sure.