Going Out With a Spank

My definition of a capitulation currently is starting out with a non CAP print: a daily candle that closes outside the 19-sample bollinger and the 44 sample EMA (HL2), but does not settle back from its end more than 27 pips.

Close[i-1]<Open[i] && Close[i-1]<Low[i]+270*Point && Close[i-1]<iMA(symbol,0,44,0,MODE_EMA, PRICE_MEDIAN,i-1)-100*Point
        && Low[i]<iBands(symbol,0,19,2,0,PRICE_CLOSE,MODE_LOWER,i)

What is the point of this if you don’t know where the end of the capitulation would be?

The point is to bring attention to yesterday’s close that was aggressive enough that all the re-balancing got tapped into for a continuation. This could mean having to hedge if you are wrong footed.

What is most important is how the current day would play out. A small bodied doji would be a major exclamation mark. A good sized body would be a major win for the bears especially if they could again afford to sell more at the close.

So a Capitulation is a form of an end game, where the stakes are high.

The next one had a Back & Fill for 2 days, then the Pros decided to cover (Cyan),

There is not a single outcome as you can see.

I ended up putting back a filter that at first looked like a double down on a condition, yet it eliminated a whole bunch of prints.

 && Close[i-1]-Low[i-1]<270*Point

Yes, that’s more like how I always intended it to be.

A fluctuation maximum extra would be my guidance for the reversal, up to 45 pips beyond yesterday’s low. If 50 pips gets exceeded, look for another 100 after that.

This was unusual to see the Green Cap to be broken like that, there may be a slight beat at times, but I have no example of pros doubling down and an overrun like that. At least not on the downside.