Post-Market Discussion For Friday June 8, 2007

[TinGull]

Dogpile and alleyb, this is really great stuff. I love this discussion about using IBx2 or 3 for price targets. I had never come across this in my studies before, alleyb. Is there a place where I might read more about this? By plotting those on my MP charts, they do seem to be nice places for targets.

Thanks again

Chris

[Dogpile]

ok alleyb, I see your point.

you effectively say that traditional MP practicioners underestimate the upside potential after a wide initial balance due to a bit of a change due to more electronic markets, especially for Normal Variation Days. (fyi, Normal Variation Days are days that essentially see 1 push, followed by some acceptance of that price --- and then higher timeframe players extend the range later in the day).

Traditionally, 'normal variation days' (NVD) do not have as wide an 'initial balance' as normal days. A normal day is swift early entry by other timeframe players, creating a wide initial balance, followed by little directional movement. Thus, 'normal days' and 'normal variation days' look similar until the point of the range extension later in the day.

so Alleyb, you are saying that if you do get a NVD, it can often extend 2x to 3x the width of the initial balance. so either:
(2-3x opening 60-min Range) + (low of day)

Thus the real issue is distinguishing a NVD from a normal day quickly as they will both look the same before the afternoon range extension.