Riding the Wyckoff Wave

[Upthrust86]

	Quote:	DbPhoenix
	Wyckoff, however, didn't base his approach on geometry but on behavior ... For the purposes of this thread, the only "pattern" per se is the hinge, which, again, is the result of specific trader behavior, and therefore exists outside the trader himself.

Surely Wyckoff identified more patterns than the hinge in his work, no? The climax is a pattern just as much as the hinge, and probably more so. The climax has a certain set of characteristics that form a pattern in volume, spread and close, and it is based on trader behavior. The same can be said of the secondary test.

[gassah]

Good looking bounce off the top of the lower range for the SP500 today. It appears the upper range is back in control for now.

[That One Guy]

Am I, on the right path to reading price and volume. Saw a hard push down, at 11:26 leading to a bit of a light demand push up. Then, we see buyers putting in effort getting decent results to take price back up to the median level. As soon as price finds this area, I see no effort and no results to get back above it, which would show potential for more demand. Sure enough price falls off a cliff making new lows. Just how I read that in real time, no trade was taken, since I'm concentrating on listening to the market not trading it currently.

[DbPhoenix]

On a day like today, i.e., a trend day, it's easy to come up the wrong conclusions regarding volume since the smaller waves are pretty much irrelevant to the larger.

The key here is shorting resistance at 2005. After that, all you have to do is follow the line of least resistance by means of trend lines and swing points. Typically, price will move sideways during lunch on days like this, and it did so today. Since it rose above a prior swing point only once, at 1300 (ET), you needn't do anything more than just wait and watch your profits increase.

[Bearbull]

JWhite
That is pretty good assessment of price/volume action, Get hold of Dbphoenix's e-book, there are very informative sections on this aspect.

[gassah]

	Quote:	gassah
	Good looking bounce off the top of the lower range for the SP500 today. It appears the upper range is back in control for now.

Then again, perhaps not.

[zeon]

	Quote:	DbPhoenix
	On a day like today, i.e., a trend day, it's easy to come up the wrong conclusions regarding volume since the smaller waves are pretty much irrelevant to the larger. The key here is shorting resistance at 2005. After that, all you have to do is follow the line of least resistance by means of trend lines and swing points. Typically, price will move sideways during lunch on days like this, and it did so today. Since it rose above a prior swing point only once, at 1300 (ET), you needn't do anything more than just wait and watch your profits increase.

Hindsight is 20/20... if price had gone up all day, you prob'ly would've said 'the key here is buying support at 1990'. After all, price opened around support, the trend from yesterday was up. There's a very similar example in your blog. So why not do it today? After all, price traveled all the way to resistance next. You can even draw a demandline next to it.

[DbPhoenix]

	Quote:	gassah
	Then again, perhaps not.

The key words were -- correctly -- "for now", which is an aspect of this that the pundit wannabees continue to miss. While they may pay lip service to the idea of taking it all "day by day", they are also compelled to "make calls" in order to demonstrate how much they know. Or, actually, don't know. And thus get it wrong yet again.

We are now back where we started at the "selling climax", and those who bought here and stopped thinking have now watched all their profits evaporate. Or at least ES and YM (NQ has given back only 75%). What will be interesting now is how they react.

[DbPhoenix]

	Quote:	zeon
	Hindsight is 20/20... if price had gone up all day, you prob'ly would've said 'the key here is buying support at 1990'. After all, price opened around support, the trend from yesterday was up. There's a very similar example in your blog. So why not do it today? After all, price traveled all the way to resistance next. You can even draw a demandline next to it.

No reason not to buy the midpoint at 1990, if that's a part of one's strategy. However, doing so would not be "key" to playing the trend day, and the trend day provided the sideways midday movement that I referred to and that I've noted several times in previous posts on the subject.

Or one could stubborly hold to a bullish bias, ignore the test of resistance, and stand by while watching most or all of his long profits evaporate. But that's the difference between trading reality rather than dreams.

An update to the ES chart I posted last week:

[zeon]

	Quote:	DbPhoenix
	Or one could stubborly hold to a bullish bias, ignore the test of resistance, and stand by while watching most or all of his long profits evaporate. But that's the difference between trading reality rather than dreams.

The same could be said of yesterday. There was a 'test' at 1990, high volume and the initial reaction pushed price lower, just like today. The difference is that price continued higher while today it reversed. So one should have reversed longs too yesterday than?