SPY Daily Composite

[gassah]

The attached shows the daily composites for the two ranges using Market Analyst. The blue zones are value and the green and red are the 2nd and 3rd standard deviations, respectively. Barros likes to look at the red zones as the extremes of the ranges and it's interesting how they overlap for the top and lower ranges.

If price gets turned down from the extreme of the lower range then it might represent a good shorting opportunity. If it can return above the pink line with conviction, back into the upper range, then the old highs as a target seem probable, imo.

nic

[DbPhoenix]

This in essence is what I've been doing to find support and resistance, though I've been using plain ol' volume at price and eyeballs. The utility of it is that price will reverse at extremes and return to the "value area" (or POC, or midpoint, or whatever), i.e., that "big money" traders will find few trades at the extremes and return to those areas where they will be able to do business. For anyone looking to ride the wave, they generally begin at those extremes.

Good to see you back

[gassah]

	Quote:	DbPhoenix
	Good to see you back

Thanks. I'm lovin' MP. I haven't been this turned on by TA since you introduced me to Wyckoff eight years ago!

nic

[DbPhoenix]

I did? Apparently some of my past has leaked out in order to make room for new stuff.

[heretodaygone...]

gassah,

How does standard deviations help you with your trading? I can possibly see them as profittaking areas but haven't put any time into their usefullness.

[gassah]

	Quote:	heretodaygone...
	gassah, How does standard deviations help you with your trading? I can possibly see them as profittaking areas but haven't put any time into their usefullness.

They are just one way to delineate the extremes of a range, to take profits or to initiate a position.

nic

[heretodaygone...]

Ok, after looking some more, I can see what your looking at. Would you happen to have an intraday chart of possibly a few days worth of data?

thanks

[gassah]

	Quote:	heretodaygone...
	Ok, after looking some more, I can see what your looking at. Would you happen to have an intraday chart of possibly a few days worth of data? thanks

Sorry, I'm only setup in Market Analyst with Forex for intraday data.

nic

[heretodaygone...]

thanks anyway...good stuff

[DbPhoenix]

	Quote:	gassah
	They are just one way to delineate the extremes of a range, to take profits or to initiate a position. nic

I'm not a student of MP, but I understand that it considers the value area to include 70% of the trading activity. Since the center portion of the bell curve represents 68%, I assume that this is what they have in mind. Given that, the tails on either side would represent the same as the bell curve, 13% and 2% on one end and the same on the other.

I learned the same support and resistance dogma as everybody else, and it made sense, as far as it went, so that's what I've worked with all these years. But auction market theory fleshed it out and deepened my understanding of just what is going on with regard to S/R.

Someone wrote that if you combine the principles of Wyckoff with the principles of auction market theory, you have about as close to a grail as you're going to get. He may be right.