Riding the Wyckoff Wave

[DbPhoenix]

I can't speak for Wyckoff, but absent a buying climax, I assume he'd just hold for his stop.

Edit: Post RTH, price up to 1865.

[DbPhoenix]

To clarify the chart I posted in #102, I said "this is what I'm looking at now on the NQ". However, it should be obvious that I don't trade off BigCharts, nor do I use the QQQQ to give me signals. What I meant was that those were the price and volume clusters I was looking at, and continue to look at. I posted the QQQQ from BigCharts because (a) this is available to everyone and (b) it's close enough, at least for the purpose of illustrating these concepts. Anyone interested in doing this for real, eventually, should get himself a real-time feed and follow his own NQ or ES or whatever charts.

[zeon]

	Quote:	DbPhoenix
	To clarify the chart I posted in #102, I said "this is what I'm looking at now on the NQ". However, it should be obvious that I don't trade off BigCharts, nor do I use the QQQQ to give me signals. What I meant was that those were the price and volume clusters I was looking at, and continue to look at. I posted the QQQQ from BigCharts because (a) this is available to everyone and (b) it's close enough, at least for the purpose of illustrating these concepts. Anyone interested in doing this for real, eventually, should get himself a real-time feed and follow his own NQ or ES or whatever charts.

Do you mean that the charts aren't accurate? I am aware of the differences between the futures and cash market for example. I actually posted the question about the offset between both in another thread. Perhaps you could shed some light on it too.

[DbPhoenix]

BigCharts doesn't provide emini data. It's also delayed. I'm sure they're accurate for what they are.

[gassah]

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

The first chart is the NQ 1m from yesterday which I think is the chart under discussion. Along with a trailing stop I believe W would have drawn the channels and considered exiting at the preliminary supply and/or buying climax (BC) areas. The BC is especially attractive because:

1. Price hit a prior day's congestion
2. It was overbought outside an accelerating channel (position)
3. It reached a point and figure target

I've never tried point and figure on the 1m NQ so I don't know how well it works. Not all stocks/securities work with point and figure and each one would have to be checked historically to confirm.

[zeon]

Within the context of Tuesday's selling climax and re-test, I thought it might be interesting to discuss 'the big picture'. Mainly, because I seem to recognize the same concepts and as they apply on each timeframe,...

From what I can see:
(a) is a selling climax on huge volume, and demand overcomes supply because if you blend the bars, it's a hammer-like formation and price closes well off the lows
(b) a break of the demandline
(c) a higher low
(d) a re-test of the low, and on lower volume
(e) a shake-out and in effect another test, on higher volume but price closes off the lows
(f) a higher high
(g) and a higher low => confirmation of new uptrend
(h) a new (cyan) demand line can be drawn

Forget for a minute that everybody is saying that this is a bear trend and just look at the chart. Or for the sake of the exercise suppose that this is a intraday chart instead of a daily one, doesn't this validate taking a long position? What elements have I interpreted incorrectly?

[gassah]

	Quote:	zeon
	Forget for a minute that everybody is saying that this is a bear trend and just look at the chart. Or for the sake of the exercise suppose that this is a intraday chart instead of a daily one, doesn't this validate taking a long position? What elements have I interpreted incorrectly?

Hi Zeon,

I'm a ST/IT trader and prefer this big picture. Looking at only the daily chart isn't providing the full picture from a W point of view. The weekly has to be taken into account and that trend is down. If the trend were up then making long commitments on the selling climax and subsequent tests would fit the strategy. W does provide examples of making short term long trades in bear market rallies but he didn't take on intermediate longs and didn't advocate trading short term against the longer primary trend, though it's probably fine for an advanced trader, IMO, with a proven track record of trading with the trend first.

[zeon]

	Quote:	gassah
	Hi Zeon, I'm a ST/IT trader and prefer this big picture. Looking at only the daily chart isn't providing the full picture from a W point of view. The weekly has to be taken into account and that trend is down. If the trend were up then making long commitments on the selling climax and subsequent tests would fit the strategy. W does provide examples of making short term long trades in bear market rallies but he didn't take on intermediate longs and didn't advocate trading short term against the longer primary trend, though it's probably fine for an advanced trader, IMO, with a proven track record of trading with the trend first.

I'm sorry, but if I understood correctly you disagree with the example dbphoenix give Tuesday then?

How do you know this 'double bottom' isn't a change of the trend? We've failed to make a lower low and the demand is breached and we've moved up above the last swing high...

(Don't get me wrong, I agree this is a bear market; I'm playing devil's advocate here).

[DbPhoenix]

Going back to post 122 above and what I'm looking at on the NQ, I'm posting a chart of what I actually am looking at (which isn't BigCharts). This may be tangential to the discussion, but without real people making real trades in real markets off real charts, it all becomes the usual hypothetical, philosophical discussions that become interesting but irrelevant and push people toward Miracle Software ("Anybody Can Do It!").

Note that after bouncing off long-term support, price consolidated between the bottom and midpoint of the first range. It then stalled and formed a hinge at the bottom of the next range. It then consolidated again at a line which has served as both support and resistance all month. Then to the midpoint of the range created on the 8th and the bottom of the range which preceded the cascade. Overnite, we reached 1870, the top of this range. Whether we reach 1880 or not remains to be seen. If there's no buying climax, I'll be looking at pretty much what Nic posted, though I'll scale out as usual under these circumstances.

[gassah]

	Quote:	zeon
	I'm sorry, but if I understood correctly you disagree with the example dbphoenix give Tuesday then? How do you know this 'double bottom' isn't a change of the trend? We've failed to make a lower low and the demand is breached and we've moved up above the last swing high...

I'll have to go through Tuesday's posts to find out which one you are referring to. Is it the 1m NQ I already responded to?

I'm curious about the double bottom because McLaren, with 40 years of experience, states that double bottoms rarely end down trends. They are terrific in up trends but usually fail in down trends. The reverse is true of double tops.