I am afraid it's not that simple - nothing is what it seems: The difficulty many have results from their inability to differentiate what they believe they see from what the market has actually provided. A thing might look like a (insert whatever one has trouble with here), but isn't. The market even has a convenient way of working things out so it appears nothing is amiss. By not knowing whether the market actually provided what the trader believes they can see, the trader unwittingly reinforces bad habits. Here's an example: The bar is black, Volume has increased, but now the market informs the trader to expect an upcoming pace change (after this bar). In other words, the trader should know by the close of the ES 10:15 bar that the market has yet to have reached its 'trough' required from the previous pace change (ES 9:50 [close of] Bar) and, prior to, reaching its expected 'trough' another pace change developed. As a result, the trader anticipates additional non-dominant movement.
I've mulled enough and would like to add my ignorance to the discussion [ignorance = I don't know either but I'm trying to figure out the problem too]. It is clear that the 12:35 bar changes and has ample reasons to do so, two of which are: 1. Failed continuation [12:35] of a BO on increased V [12:30] from a LM which began at [12:10]. 2. JW change signal [3 bar type] which is allowed because of a completed 1,2,3 sequence with the point 3 validated at [12:30]. So the question initially is then, IMO, not why there is a "valid" change signal at [12:35] but rather why there isn't one at [11:55]. If we start with the JW square and to this add the context that we are in an uptrend, then the four scenarios we have when comparing a pair of bars are: UPTREND Increased V with increased P = increase in P = Continuation Increased V with decreased P = decrease in P = Change Decreased V with increased P = decrease in P = Change Decreased V with decreased P = increase in P = Continuation This can be compared to what we see when a downtrend (increasing red volume) is present: DOWNTREND Increased V with increased P = increase in P = Change Increased V with decreased P = decrease in P = Continuation Decreased V with increased P = decrease in P = Continuation Decreased V with decreased P = increase in P = Change There is nothing to suggest that we have changed trend direction as we move from [11:35] up to [11:50] but when we get to [11:55] we have increased P with decreased V, for which the "UPTREND JW Square" predicts change. However we don't get change and in fact the next bar [12:00] shows increased P with increased V which says continuation. Before proceeding further if anyone thinks that what I have said so far is wrong please say so and also say why. Let's assume I am correct and if so what possible reasons are there why, when in spite of the JW prediction, we don't get change. 1. We are in a sequence 1 of an uptrend and this is because we had a valid change of trend signal at [11:35] which is a failed BO of a LM plus a 3 bar JW change signal. This would further imply that there was a validated point 3 down at [11:25] and that we were still in a downtrend until the change occured at [11:35]. But if we say this is so then the move up from [11:00] until [11:10] would have to be a nondom retrace and this doesn't fit with increasing black V. Furthermore this area appears to be undergoing a B2B transition which again doesn't fit with a retrace and as well, the height of the [11:10] black V bar is greater than the height of the red bar at the most recent low. 2. Something else is going on. I'm going to go with option 2: 1. The new uptrend began at 11:00 with a valid change signal comprised of a pennant FBO plus a 2 bar DOWNTREND JW change signal. I'm as sure as I can presently be about this statement. 2. There is a black/red V trough at [11:40] and this is what we would expect for a nondom retrace in an uptrend but if you look at the height of the black bar right after this trough, the'pace jump' black bar [11:45] if you will, you can see that it is less than the height of the most recent 'pace jump' red bar [11:30]. I refer now to the two most recent posts by Romanus. The first one involves an interchange between myself and Spyder, the second between Spyder and Jander. I have not read the Jander post in detail but in looking at what Spyder said to me I think that because the height of the [11:45] black bar was less than the height of the [11:30] red bar, we can anticipate another trough and another black 'pace jump'. It's kind of like we are in a retrace but red has tried to reassert itself so we have to wait until black regains its position of superiority. So the bottom line is that we will continue the nondom (the point 2 to point 3 move) until we get another trough PLUS a black 'pace jump' which gives a volume which is greater than the volume of the red 'pace jump' bar at [11:30]. This finally happens at [12:30] and then all the other stuff I mentioned at the start of the post occurs. It is because we are in a nondom that there is no SFC at [11:55]. My apologies for the long post but at present I can't elaborate my logic more briefly. If this explanation is correct, I will be able to say it much more briefly. If it isn't correct I'm going back to my cave for another round of mulling. Kindly have at it. lj PS: This reasoning is compatible with the Gaussian interpretation rendered by nkhoi. So if I'm wrong it's because of him.
ljyoung, I guess with this logic one have to embrace a possibility of a retrace going in dominant direction?
Bar 11:50 confirmed DOM up with more ibv after the fbp bo with ibv. At 11:50 we have price up, volume up = DOM up.
I do not know how useful this small difference can be, but we have VE of the tape on 11:55 bar and tape level FTT on 12:35 bar. VE on decreasing volume signals change + decreasing BV in an up trend means lateral movement => market signals change from up to lateral in an up trend => continuation. The very next bar 12:00 makes our anticipation of lateral history and starts a new up traverse. I hope my logic here is not unnecessarily convoluted.
If one draws a Gaussian beginning at 11:10 on your chart, and extends it to the right, what is the slope of the right Gaussian wing? lj