Given the two scenarios you've outlined, and leaving "support" aside, how would you evaluate the following chart which presents the price activity a few minutes before the opening bell (the 92 line from the previous chart has been brought forward)?
Higher low around 3193 clearly showing demand is stronger than supply. But price is still inside 3192 to 3200, so we await developments. We need to watch closely the relative strength between demand and supply when market is approaching 3198 again; or it may march down to break down 3192 to have a lower low.
Okay, I will try my best. Well, in the past I would make the mistake of assigning way too much importance to the more recent movement of price that I can see, which in this case could look like a down-move with a RET at about 50% which is starting to lose steam. Having more time to mull over the situation, it would clearly be a mistake to think this way. Having established the context we've just been discussing, I think the most important factor here is the small lift off of the 3192 line. There weren't any sellers even interested in making exchanges at what would be a reasonable value if they felt that the range accurately represented current value, and especially if there was confidence in a continued down-move by sellers. With this in mind, it allows us to see the pretty impressive demand lines that can be drawn on the two up-moves pictured. The first surge didn't even continue along in a linear fashion; it sharpened immediately after the retracement, and there wasn't even a sound rejection of the peak of the movement.. price hovered there for several minutes before coming back down. And again, instead of seeing the second movement as a faltering RET, we can see that price is beginning to lift off the initial demand line of the movement into a steeper incline once just like last time. Also, it has just inched above the top of the swing high prior to the pictured peak as well. The signals are starting to paint a fairly convincing picture...
Commendable, though your first DL isn't tight enough as price leaves it in just a few bars. But at least you're evaluating it in terms of demand and supply rather than patterns and lines. All of this precedes the first question I asked on Friday at 0928 which had to do with the higher low and you've addressed that. So now what? The market opens in two minutes. What are you going to do?
While I hate to interrupt the trading of those who have not yet learned how to trade, I should point out here that the essence of a trading plan is knowing what to do IN ADVANCE about a variety of contingencies, based of course on a presumption that the trader can tell the difference between up and down. Those who have had no idea what they will do/would have done (at the time, these posts were made in "real time") at the market open have no business trading, and are merely extending the amount of time that it will take to learn by taking the "shortcuts" they are so obsessed with. This post is not directed toward anyone in particular, though you know who you are. If you don't know who you are, then you're in even worse trouble.
I haven´t read the post that came after DBs, so maybe I am saying something that has already been answered. Being 92 the line in the sand between weakness and strength, and being above it at the time of the chart, and given that the DL from 92,50 is still valid (not sure about fanning it in). I think we are at the middle of a RET within the context of the uptrend.
Nice analysis, although I am not sure the black line is actually a valid DL here, as I understand it tracing that line would require a HH above 97.75 to be drawn.