So, there are two types of markets.
E-16 I have had a long lasting fascination with. I used to call it the “Water Line” and plot it in blue accordingly. Waters can have current, but this white blog paper is about the electric current that E-16 gets to be charged with in order to act as a magnet that repels or attracts.
The two types of markets this causes are the Smooth Sailing (Surfing) market and the Fading market.
Try to picture for a second, that the price has a positive charge, and our Electromagnet, E-16 has a negative charge.
The when the point of know return gets tripped, the electromagnetic current changes direction causing the E16 to start acting as a repellant.
The characteristic of the positive (price) – positive (E16) market is that supports and resistances get surpassed with ease, and ultimately count for naught. I mentioned in the previous article, that what you have to work with instead is the degree of stretch and time.
You can witness on the following image how all resistance levels accounted for nothing until the mean reversion was complete, and then the momentum (polarity) carried price further.
The next thing to talk about here is the point of going too far. This time not in relation to the rubber band, but in relation to pushing the positively charged particle (the price) to the other side of the positively charged E16. Of course, the rubber band stretch helped. Remember, that the flip happened in Bear Zone 1: between 1x and 3x from the mean.
What happened on the upside is that we ran out of current. The interrupted line is what I call the “computer buy”, and even that changed its mind before price got to it.
The characteristic of the positive (price) – negative (E16) market is that the price keeps on falling back to the the attractor current.
Due to the wrapping around the E-16, you cannot expect any move to exceed a full fluctuation size (until a point of known return shows up), and if you want to make money, aim for 1/2 fluctuation size bites (i.e. from the green and the orange stripes).
Boogie mans have the potential to turn into something more, yes.
I use the arranged LEMA fan (30min, 1H and 2H) plus the 30MA (hourly) to detect for “charged market”, and based on this, it would not take much to re-instate the positive current, the orange line would have to go back below the Green River, is all.
I wanted to insert here a video from the Powerpuff Girls Series (the old one) where Mojo Jojo rambles about
“Magnetically inducing magnetism, thus creating a Total Meltdown” – but I could not find any trace of it, so you would have to entertain yourself with some of the cartoon scenes I worked on instead.
…would be testing for the rest of the weekend…