John,
Bingo on the chart. That's it. The concept is that each subsequent trading day or trading period (you can search for it on a weekly and a monthly basis as well, as well as an hourly basis) is trading inside the range of the prior period, for a total of at least three and no more than four total periods, including the starting period range.
The ratio of high-lo divided by volume, compared to the prior 2 to 4 trading days, when there is a reversal in direction, here the Thursday, will show again an expression of power...lots of trading in a very tight trading range. It's been 15+ years since I looked closely at this phenomenon. It was one of two chart patterns that I learned had meaning. The other is the dynamite triangle. I've also studied every move that's been 2% and greater, prior to '92, for the then available S&P data. That's most of what I know.
I'm much pleased that you'll perl this to see what you see and then show me. I yet think this window of time is explosive, and I can tell you it is explosive typically to 3 times the length of the first, starting bar, from high to low, in total points. If the starting bar is 315, as an example, then multiply that by 3 and expect a move from the high or low of that bar equal to 945 points.
There are bulls bears and pigs. At 900 points, it's time to remove 1/2 the position and put in a stop loss at some number below that. If there is a round number near the goal, then stop out at that number or right before it.
If the market goes down, in this case, the drop will be 5 times that example number of 315. And based on the reversal, the market would in fact descend dramatically beyond the 945 points down.
- Join Date
- Aug 2007
- Posts
- 33
Originally Posted by GaudiaRay
