As touched on above by CF, P1, and Spyder, there was a real nugget revealed by Spy in the May 25 ET chat transcript. I've edited it up below b/c I think it deserves some extra discussion/examples in the future: The secret to finding reversals: Flaws only develop in dominant traverses. Therefore, if you see a flaw before the next dominant traverse in the current channel, that means there has been a change in sentiment and the dominant switched. Again: If flaws ONLY happen in dominant traverses, then a flaw in a non-dom must mean the OLD dominant channel is no longer operating.
Yes, indeed. This seems to be a very nice hint when looking for change in dominant sentiment. The problem is: for me, I find it very difficult to recognize 'Stalls' (or 'Hitches') in Real Time, the reason of course is because I fail to understand the 'particularities' of each of them 'Dips' seemed ok, as they have a very peculiar shape (very low volume, small bar), HVS can be found sometimes by paying attention to decr red and black volume in a lateral move. Now 'Stalls' (and 'Hitches') are very hard to understand even in hindsight. I tried to do some research about flaws this weekend, and I found among several information, a hand drawn image in this thread (it is at page 149 of pr0crast Volume 1) that shows an example of each flaw. This is referred as a 'temporary pause' being two small bars in different directions...it seems to me like an 'extension' of a dip. I also found a quote from Jack about Stalls, that as I understand it, is contrary to the above explanation, as it says 'Stall are ends of trends where you can exit ...' Also, when I analyze 'Stalls' in Spyder's charts I can't find any major characteristic that relates them, for instance: - Itâs not a low volume bar (some of them are >20K) - Itâs not a trend contrary bar - Itâs not a small volatility bar What I found was this: - It is a one bar flaw - Sometimes YM is near the SMA20 when 'Stalls' happened in ES. Due to Jackâs quote, I am now curious in find out if STR/SQU can be a used as a Stall finder, or at least be of some help to provide some more clues to this. 'Hitches' are even more mysterious, as are rarely seen. 'Seeing' flaws in YM also seems very difficult as there are a huge amount of 'potential' candidates I hope this can add some help to this discussion... Best Regards,
The attached .pdf file is a compilation of some discussion on flaws from the ET Chat last week. I edited it for my own use and reference but it should be useful to others.
Here's an index I recently started for quickly linking to Spyder's daily ES chart posts. This has helped me to quickly pull up charts for review since I don't print them out. Hope others find this useful also. I use Open Office instead of MS Office. Hope this Excel conversion worked ok.
I thank CFerret for engaging Spyder in the conversations and creating the discussion. edit: its a given that I also thank Spyder for his generousity!