Riding the Wyckoff Wave

[DbPhoenix]

As a follow-on post, we've weathered the consolidation and have made a higher high into multiple zones of resistance. However, there's still no climactic action.

[DbPhoenix]

Now approaching what had been support prior to the 65pt plunge on the 11th. Still no buying climax.

[zeon]

	Quote:	DbPhoenix
	Now approaching what had been support prior to the 65pt plunge on the 11th. Still no buying climax.

	Quote:	DbPhoenix
	As a follow-on post, we've weathered the consolidation and have made a higher high into multiple zones of resistance. However, there's still no climactic action.

If I'm correct, price opened at resistance and hovered a long time below 1825 while the volume steadily declined. Is this absorption? From my point of view, one would be looking to the short side given the market rallied after news premarket up to resistance where it stalled. Also, the ES was going up while the NQ was on a standstill. 45 minutes after the open we broke higher on huge volume.

I take it this would be the entry signal for some, but as has been mentioned in this thread Wyckoff himself wasn't particularly fond of this type of trades. Perhaps, in the context of this thread, it would be interesting to point out which other entries were possible today. Personally, I can see none... I can understand there's no reason to exit longs, but that's assuming one is in nice and early.

[DbPhoenix]

	Quote:	zeon
	If I'm correct, price opened at resistance and hovered a long time below 1825 while the volume steadily declined. Is this absorption? From my point of view, one would be looking to the short side given the market rallied after news premarket up to resistance where it stalled. Also, the ES was going up while the NQ was on a standstill. 45 minutes after the open we broke higher on huge volume. I take it this would be the entry signal for some, but as has been mentioned in this thread Wyckoff himself wasn't particularly fond of this type of trades. Perhaps, in the context of this thread, it would be interesting to point out which other entries were possible today. Personally, I can see none... I can understand there's no reason to exit longs, but that's assuming one is in nice and early.

As to absorption, possibly. You'll note that that was the bottom of the range for the 9th. As to looking to the short side, there's no reason to do so as there was no buying climax.

As for W, I assume he would have entered off yesterday's selling climax, though he might pyramid off the "stall" that you refer to. You'll notice that it forms a hinge, a type of springboard.

Incidentally, W would most likely move his stop up below 1840. Nic?

[treadstone]

I notice there was over 3000 contracts traded up at 1854 with no upwards progress, Db. (1min bar)

Would you call that a buying climax?

[zeon]

	Quote:	DbPhoenix
	As to absorption, possibly. You'll note that that was the bottom of the range for the 9th. As to looking to the short side, there's no reason to do so as there was no buying climax.

Yes, the 9th is basically the reason why I had that level as resistance. Also in part because of the action on the 25th and 26th of March.

	Quote:	DbPhoenix
	Incidentally, W would likely move his stop to below 1840. Nic?

I take it he moves his stop up below the last swing low in an uptrend and vice versa in a downtrend.

	Quote:	DbPhoenix
	As for W, I assume he would have entered off yesterday's selling climax, though he might pyramid off the "stall" that you refer to. You'll notice that it forms a hinge, a type of springboard.

Allright, but let's assume he's not holding overnight. So he can't be long from yesterday. I remember reading this in the day traders' bible: "A pure tape reading day trader does not care to carry over night. The tape is then silent, and he only knows what to do when it tells him. Something may occur at midnight which may crumple up his diagram of the next day's market. He leaves nothing to chance; hence he prefers a clean sheet when the market gong strikes."- Wyckoff

So if you are not long on the break of 1825, there's not much to do except for stand aside and wait another day?

[DbPhoenix]

If you're not long on the break of the hinge at 1825, I'd say there's not much for you to do except wait for a buying climax.

[DbPhoenix]

	Quote:	treadstone
	I notice there was over 3000 contracts traded up at 1854 with no upwards progress, Db. (1min bar) Would you call that a buying climax?

Personally, no. But waves don't always crest with a bang. They sometimes end with a whimper. Therefore, one has to have something else to look at in addition to climactic volume, which is why I incorporate demand/support lines, trendlines, and swing highs/lows. If price violates all of that, regardless of what's happening with volume, then you're very likely done.

[zeon]

	Quote:	DbPhoenix
	If you're not long on the break of the hinge at 1825, I'd say there's not much for you to do except wait for a buying climax.

Thanks, at least my bias was right to be looking for long entries. I justed wanted to know if the reason I couldn't find any was my lack of knowledge or the fact that there just weren't any high probability entries.

[zeon]

	Quote:	DbPhoenix
	Personally, no. But waves don't always crest with a bang. They sometimes end with a whimper. Therefore, one has to have something else to look at in addition to climactic volume, which is why I incorporate demand/support lines, trendlines, and swing highs/lows. If price violates all of that, regardless of what's happening with volume, then you're very likely done.

In the absence of demand and trendlines, what else would Wyckoff consider an exit signal? I mean, I can't see much of a demandline other than one drawn after the break of the hinge, but that one is very steep. So would Wyckoff wait for a breach of the last swing low? Price is at 1855 meanwhile, so would he wait to see his stop taken out (now around 1840 like you said) or have some other means of determining to exit?