Riding the Wyckoff Wave

[DbPhoenix]

For those who are interested, there are fourth and fifth editions of Technical Analysis of Stock Trends up for bid on eBay. These are the last editions that Magee updated himself, before "editors" got hold of the material.

[brownsfan019]

	Quote:	Bearbull
	Yes I know that, I wanted to bring to your attention the ideal setups as per the VSA tutors, now you can ask them why it did not work that time, same to the candlesticks folks, am sure they will all come up with some justification.

As the resident Candlestick guy, I'll tell you that just finding a shape and calling it a reason to trade is exactly why candlestick analysis does not work for some. B/c that's a completely inaccurate way of using them.

Candlestick analysis is not play find a shape even though the majority here who think they know something about them do just that. Context. That's all there is to it.

Back to your regularly scheduled program from DB and boys.

[DbPhoenix]

	Quote:	brownsfan019
	Context. That's all there is to it.

Indeed....

[DbPhoenix]

A couple more points regarding the series of posts I made earlier.

1. The purpose behind drawing these lines is not to make the chart look pretty but to draw the trader's attention to those areas, zones, points, levels, whatever where price action is most likely to provide trading opportunities. Whether one draws lines, boxes, circles, arrows, or big, pointy fingers is irrelevant.

2. Once those areas, zones, points, etc are identified, volume becomes largely a non-event, i.e., one pays attention to it only at those areas, etc where it is most likely to mean something. That this point is so often overlooked is probably why so many people think volume is useless.

For example, using the 1m time bar chart I posted earlier, I've blown up the shaded area:

Until price reaches an area where a trading opportunity is most likely to occur, there's no reason to obsess over the minor ebbs and flows in volume. However, once trading opportunities are on the horizon, what might be considered directionless activity elsewhere suddenly becomes important.

Here, for example, when price comes back to 1966 the second time, the fact of the test is interesting enough. That it cannot make a lower low even with all the volume is even more interesting. The bullish boost at 1329-30 becomes more important because of what has come before, as does the volume recession when price pulls back to 1975. When another bullish boost occurs, beginning at 1352, it is significant, again, because of what has come before. And when price makes an attempt at a higher high at 1401 and volume isn't there, that again becomes significant because of what has become before and provides the "classic" double-top price-volume divergence setup for the short. Without the context, none of this matters, and volume is little more than traders going about their business. With the context, it becomes a high-probability short trade.

[Bearbull]

	Quote:	brownsfan019
	As the resident Candlestick guy, I'll tell you that just finding a shape and calling it a reason to trade is exactly why candlestick analysis does not work for some. B/c that's a completely inaccurate way of using them. Candlestick analysis is not play find a shape even though the majority here who think they know something about them do just that. Context. That's all there is to it. Back to your regularly scheduled program from DB and boys.

Once again I was merely trying to point out to Zeon that the argument he put forward previously on a trendline example which worked on one occasion and not on the other, similar charts can be presented for any indicator, VSA or RSI , CCI, candlestick patterns etc., Even the dragonfly in my example would work at other times as it is actual on a support level (congestion to the left) in which case somebody can point out : look this validates the signal, here is does not simply because the selling is overpowering demand, as simple as that.

I know a thing or two about context and the rest, same with VSA concepts, Wyckoff and Candlestick charting, have been in the business for over 15yrs
Back to you regularly scheduled program on candlestick thread

[DbPhoenix]

An update to the SPX "forest" chart I posted last week (336 and 344). Whether we go up or down from here is a separate concern from gathering data. The permabulls will miss out on the shorts, the permabears will miss out on the longs.

[DbPhoenix]

Regarding the above chart and the others like it, Wyckoff stresses that, in addition to trend and whatever channels may be formed by apparent consistency in the intrusion of demand and supply, one must also look to previous areas of support and resistance, which is what we're doing now. Yesterday there was an upthrust in the Nasdaq and the Dow. There was also an upthrust of sorts in the SPX, but there've been so many over the past few weeks that they are forming their own base .

Whatever these thrusts mean in and of themselves does not matter as much as where they are occurring, i.e., against important, previous support. Therefore, both intraday and EOD traders would do well to concentrate on how price behaves at this particular juncture.

[Tannism]

Db...

	Quote:	DbPhoenix
	Whatever these thrusts mean in and of themselves does not matter as much as where they are occurring, i.e., against important, previous support. ........

It reminds me of the way you developed/refined pulling out the Mamis variables at the edges. The edges being defined by prior convention of the specific index.

Another principle?

TannisM

[DbPhoenix]

	Quote:	Tannism
	Db... It reminds me of the way you developed/refined pulling out the Mamis variables at the edges. The edges being defined by prior convention of the specific index. Another principle? TannisM

Probably not. I was going to post the new high/volume of advancers stuff a couple of days ago, but there's a danger in viewing that kind of data as a "signal". There's an important difference between commentary and "making calls". There's also an important difference between "gathering evidence", as Wyckoff put it, and making "recommendations".

I don't recommend going short or long because I really couldn't care less whether anyone does either or neither. It's not my money. But it's important to note that a lower high has been made. Or volume is crap. Or new highs in the underlying aren't keeping up with new highs in the index. Translating "note" into "act", however, takes some doing, and one must have some justification for doing so other than "it seems like a good idea".

In any case, stockcharts.com is available to everybody for free, and everyone who's interested ought to know by now what to chart and what to look for. If anyone doesn't, I can look for the posts later and provide links, unless somebody knows where they are and can save me the time.

[Tannism]

I don't know where the links are, but here is my quick key for NZ variables (begin na) after the chart you posted recently. Note: the histogram lines have different scales.

The NY variables begin with ny.