[DbPhoenix]

Very nice.

We aren't going to go over this wave by wave. But even if one is using only demand lines, there are messages being sent. You have answered this to some extent, coming at it from a different direction. But what new, if anything, does the behavior of price, at or near these lines, tell you, keeping in mind that you're not even sure you have a hinge until around 1030?

What about these points in particular?

[Head2k]

Looking at sloping demand and supply lines I would notice that the angle of the demand line is more acute. Bulls seem to be more aggressive than bears. The first thing that would draw my attention would be the quick rejection below the lsl and the congestion after it. That would tell me that 1.3030 is somewhat important, since price was sharply rejected below and bulls then absorbed all there was to sell during that congestion after. Yet price didn't make a new high, so I would be curious if 1.3030 holds again. The first red arrow marks this test. Not only the level holds, but price is not even able to get to the bottom of the congestion and the rejection is again quite sharp. Price bounces above that congestion zone and then tests it from above (not the second arrow but the shallow pullback before). This whole action confirms the importance of 1.3030 and suggests strength. Yet another failure to make a new high. At this point I would probably notice the hinge. Price than falls again but it finds support on the top of that congestion again (and now also at demand line). It bounces slightly and tests downside again, finding support even higher. This contraction of price action would suggest that the hinge is probably coming to its end. And having observed the importance of 1.3030 and the manner of lifting of levels where bulls engage (and having the advantage of hindsight ) I would bet on the bulls. From the test marked by the last arrow price advances rapidly, showing bulls' conviction. That confirms the analysis made before and suggests the upside breakout.

[DbPhoenix]

So going back to the Wyckoff quoted in the original post ("Some people regard a stock [or the market] in this [springboard] position only when it breaks through an old line of resistance or support into a higher or lower field. I claim that the beginning of the springboard move is at the bottom of a range of accumulation, or in the upper levels of a range of distribution."), where might one enter, and what would be the risks involved in each possibility?

[Head2k]

1. The most aggressive entry (IMHO). Given the data available on this chart I wouldn't use this entry. But if 1.3030 was a former S/R level and not only a swing point, nr.1 would be a perfect entry because of its distance from support. Stop loss could be placed either below 1.3015, or even below 1.3030 (but that's a bit risky).

2. Provides more confirmation. I wait for a result of that congestion. But then I am entering in the middle between support and supply line and stop must be the same as in case of nr.1. And what is even worse, I can't hope to move the stop to BE until the supply line is broken. And again, unless 1.3030 is former S/R level I don't see a justification for this entry.

3. Even more confirmation. Entry after a successfull test of 1.3030. Nr. 3 could be as well right on the break above the congestion. This entry is probably better than nr.2, because now the support is confirmed and stop can be safely placed right below the congestion. And even the entry price is the same as in case of nr.2, the risk is smaller.

4. Entry in anticipation of breakout. Given the successfull tests of the top of that congestion, a contraction of price action and the higher supporting point of the last test, I could enter here. But I probably shouldn't, because it is too high and before the actual breakout. So if the breakout fails, at least for the time being, I am left holding the bag. And where should I place my stop? One option is below 1.3045, which is a midpoint of the hinge and also a top of that congestion. Another option is to put it below 1.3030 again. In the former case there is higher probability of being stopped if the breakout fails (since the stop is only below midpoint and not below support), and in the latter case the stop is quite wide.

5. Breakout above supply line and the last swing high. The most confirmation and the worst price. In this case I would place my stop below the midpoint of the hinge, that is below 1.3045. Again a wider stop, but maybe justified by probability of the desired outcome.

6. Retracement after breakout. Same price, same stop, a bit more confirmation.

7. Re-break. So much confirmation that it implies a very wide stop. Too late entry IMHO.

There is probably more opportunities to enter, but these are the ones I would be thinking about.

[DbPhoenix]

Thanks to you both. Anyone who takes the time to make his way thru this 20-post arc will learn a great deal.

[innovation]

Db: Thank you for your time and effort in helping me and others understand the thought process and salient events to watch out for in the formation and culmination of a hinge, you are a credit to TL.

Head2k: cheers for stepping up, I was preparing a reply but you have said it all and more

Originally Posted by DbPhoenix »

... I could in one post explain what's going on in this hinge and how to enter at just the right time and trade the correct direction, and you'd learn exactly how to play this hinge. But so what? You can't play this hinge. It's gone. And there'll never be another quite like it. You can, however, get behind the hinge and learn why price is doing what it's doing. Knowing that, you can then play any hinge you find.

Could you make that post? Whenever I have learnt any complex subject I have started with the specific/special case and then ultimately moved on to the general case.

Even if you think it would serve no purpose it might just trigger some light bulb in someone's head that results in several loose threads being tied together into a firmer braid.

Thanks again

If I have any other questions/misunderstandings (specifically with the Sect 14M Vol Studies) shall I post them here?

[DbPhoenix]

Originally Posted by innovation »

Could you make that post?

The two of you already made it.

If I have any other questions/misunderstandings (specifically with the Sect 14M Vol Studies) shall I post them here?

I suggest using the Volume thread for that.

[cowseathay]

I think I see a potential hinge/coil in the DAX Future in the one hour chart. Volume seems to be diminishing, the hinge seems to be "filled with price" and the ranges are getting smaller and smaller. Seems like it is poised for a breakout.