When Volatility Is Back

Volatility is above all, speed. It has to be an optimal one at that to be able to cover large grounds.

Too fast is counter-productive. Too slow and everyone went to sleep already.

As for the duration of the pitching tremor I find the golden ratio of the sweet spot to be 3-6 hours long and in length 25+, all the way up to 34 pips. If 32 pips is a fluctuation length, then 25 pips is just over 78% of that.

When you are trending down, and the optimal speed of volatility (distance/time) is back, it is a no brainer to go short even at market and add on the rise and ride the waterfall all the way to a 67-sample momentum reversal divergence.

Now, when you are trending upwards, it is a lot harder to cope with the presence of the “right speed”, for it can turn on itself from the get go. For instance on the example below the Waterfall landed on a 14-sample momentum divergence (green vertical and trend line combo). Not a jolly start. From then on the fall happened upwards. to the effect of 75+ pips. (I introduced these white projection bars with red and green tails and number plots – see the 1.1339 in red over the red tail.)

On the next example there is optimal volatility down for starters, but the trend is up (higher heads / the yellow confirmation line is stair-stepping up) and to make matters worse, the up move also qualifies with its instant 75+ pips projection to the upside from the swing low.

Now what? Who’s got the upper hand over the ultimate direction? The previous example showed that the last word logic does not necessarily stand. How about concentrating on where the first deep M gets printed and deeming it the wrong direction?

The reality is that currently there is no direction of any sort, due to the volume being put on mute (no sultans of swing with their invisible touch/pull), the Pendulum is currently idling. This is the period when moves don’t play out.

If you scroll down, you can see the last “full” swing was between the two P letters. I actually had to give a few pips of discount for the plot to even appear for the last one for it was already starting to fall short. Ever since the 2.8 and 0.28 safety lines were safe from any attack. The Money Flow reversal displacements and even the deep M fresh support / resistance lines made the pendulum turn with ease.

The final point of what this minisquelity report is trying to get across is the displacement I use for the MFI break out levels (spelled out in blue letters and plotted with orange moratorium lines with 18 pips of a shift) are corresponding to the fractals highlighted by the orange diamonds – the last MFI reversal-divergent legs. They would have to put in some effort to swing hard towards one of these moratorium lines, which would most likely result in a counter-swing of a similar magnitude.

The Deep M is was talking about. The Wedge reminders help me stay on cue.

A couple of Sultans are back now.

P/NR = point of no return.
/////partial up
      if (i>0 && High[i]>AxelU[i]-20*Point  && Close[i]<AxelU[i] && High[i-1]<High[i] && High[i+1]<AxelU[i+1] && !( High[i+1]>AxelU[i+1]-20*Point && Close[i+1]<AxelU[i+1] && High[i]<High[i+1] && High[i+2]<AxelU[i+2])
         && !(High[i+2]>AxelU[i+2]-20*Point  && Close[i+2]<AxelU[i+2] && High[i+1]<High[i+2] && High[i+3]<AxelU[i+3]) && !(High[i+3]>AxelU[i+3]-20*Point  && Close[i+3]<AxelU[i+3] && High[i+2]<High[i+3] && High[i+4]<AxelU[i+4])
                      ObjectCreate("Talz"+IntegerToString(i), OBJ_TEXT, 0, Time[i], High[i]+50*Point); 
                      if (High[i]-iMA(NULL,0,32,0,MODE_EMA, PRICE_MEDIAN,i)>300*Point) ObjectSetText("Talz"+IntegerToString(i), "P/NR", 26, "Impact", PowderBlue);
                     else ObjectSetText("Talz"+IntegerToString(i), "P"+DoubleToStr(NormalizeDouble(High[i]-200*Point,4),4), 26, "Impact", PowderBlue);
     /////partial down
          if (i>0 && Low[i]<AxelL[i]+20*Point && Close[i]>AxelL[i]+10*Point && Low[i-1]>Low[i] && Low[i]<Low[i+2] && Low[i+2]>AxelL[i+1] && Low[i]>AxelL[i]-100*Point)
                            ObjectCreate("Talz"+IntegerToString(i), OBJ_TEXT, 0, Time[i], Low[i]+20*Point);
                            if (iMA(NULL,0,32,0,MODE_EMA, PRICE_MEDIAN,i)-Low[i]>330*Point) ObjectSetText("Talz"+IntegerToString(i), "P/NR", 26, "Impact", PowderBlue);
                     else ObjectSetText("Talz"+IntegerToString(i), "P"+DoubleToStr(NormalizeDouble(Low[i]+220*Point,4),4), 26, "Impact", PowderBlue);