Correct. Nothing subjective at all. Now, what is different about this particular situation described above compared to all the other situations where one does not fan on increasing Volume? Your two guesses didn't catch the big difference. Your Pink highlights broke in the same differection as the orginal moves on the FBO's No. These are not the three possibilties to which I refer. Think. What could happen with a BO. Begin with the open, and finish with the close of a bar forming after a Pennant which begins to break out. What can happen next. Three possibilities exist. Not at all, but what you describe does represent an option. However, if one knows what can happen, and has a plan in place to handle what does happen, then no need for freak out exists. I didn't say I 'knew' the lateral would break up. I said one can see the dominos falling. Just becuase the dominos begin to fall, doesn't mean the sequence will unfold exactly as one plans. At some point when things do not unfold as one expects, one says, "What wasn't that?" In this particular case, no such question needed asking. Now, does anything on the chart indicate Price was preparing to head down? Of course not. This requires no additional toolset other than Price to determine continuation or change in this particular area (based on one's resolution). The 'change' sequence never materialized, and what do we call a lack of change? Continuation. You've seen the examples many times, but simply do not realize it. In fact, the same question had been asked in this Journal once before (or possibly in a chat conversation posted to the Journal). Again, what differences exist in this example compared to other examples where one would never think of fanning? When first learning to use the YM, I recommend only heading over to use it as a tool when ES sits on or near the extremes (RTL or LTL). As one obtains more experience, one can add additional points of change (such as formation BO's). - Spydertrader
What about that 4 point outside ftt bar on increasing red volume? That usually tells me that the dominant is now down. The only way I could imagine seeing the "dominoes" fall towards an upwards lat BO is the fact that the same sequence of events just so happened to unfold on the 1300-1315 bars.
Three possibilities: 1) BO 2) BO, then return to formation 3) BO, then return to formation, then BO opposite side The difference in this example is, although the 13:35 bar BO on increasing volume, price closed back inside the channel. You then had a three bar formation which BO to the upside. I think that was enough to anticipate price going higher
Spyder, thank you for your answer. 13.35 goes down near 4 pnts but it closes at bar middle. This may suggest that the down move will not continue. Next bar (13:40) didn't make any LL and actually closed at his high. At 13.50 we had a small B2B, which reinforces our "assumption" that Up move is still in control. 14:00 bar BO lateral up. Could you tell me if I am now near the right answer? Thank you in advance,
I encourage you to look closer. How many sentiment changes occur in this bar? Look at the bar itself and 'see' what had to have taken place. Note also where Price closed compared to the previous bar. Clearly, the bar shows Intra-Bar change (several of them), but it also shows much more. You are correct, sir. Very close, and certainly close enough for you to 'see' this unfold in real time. Nicely Done. - Spydertrader
Hi guys - interesting discussion - I'm glad these questions are being asked. Unencumbered as I am by seeing that price sequence unfold in real time, I am able to make the following comments with the benefit of hindsight. (How I would have acted in real-time is another question entirely.) 1. cnms's very clear analysis shows you could have put in a short channel and switched back over to the right side when the shorts were overpowered by the longs 2. Spyder's chart implies he discounted this short and instead fanned when he saw the behaviour of the outside bar which formed the NP3. The things I notice that would hopefully lead me to the same conclusion in real-time: i) the prevailing dominant and the behaviour of price around the 20SMA (Hint: why did Spyder choose to make this channel blue?) ii) the behaviour of volume as it crosses the green RTL (was it increasing R at this point, or did the apparent R2R only come later in the bar formation?). Perhaps Spyder already was preparing to fan because it did not look like R2R at the BO of the green channel. iii) the behaviour of the 13:35 outside bar itself - intrabar reversal at the NP3, 20 SMA bounce, FBO of green channel and therefore resumption of dominant long. iv) the outside bar casts a shadow (lateral) and BO is up at 14:00. The lateral was "entered" from below. What didn't you see? There was no continuation of price short. I think that there is enough real time evidence to tell you that long is dominant and if you could not see that directly then you should be able to see that short was NOT dominant and await the lateral BO for confirmation. I know these comments can infuriate those who are really working on the detail but from my perspective it does not pay to over-analyse - make some mental notes and move on - price did what it did because it could not have done anything else.
Here is a video of Friday, October 26. It is a continuation of a tick replay I had posted. The ES and prv starts at 1:30 pm and continues until 2:20 pm. It is consolidated to 5 minutes. The chart is annotated up until the time of 1:30 pm. After that the price and volume will play out without annotations. This is so you can see through your own eyes, what is taking place at this time. Maybe you will see something different, or exactly what you annotated on Friday. Hope this helps in reviewing the time in question. Have a good evening. video link : http://www.screencast.com/t/wC4nQaW5c
Sorry for off topic, very quick . . . Latest videos were recorded in wmv file format ( microsoft video ) if anyone has trouble opening, download the codec for that format and you should be fine. Back to the program. . .
In the interest of clarity, everyone should recognize the above definition as an Outside Bar. - Spydertrader