Early March peak. RSI2 floored, then a V top with a 6-pip beat before a 220-pip decline. 2 days down, 3 back up.
The impulse wave structure does not end in strength. A divergence is there to take away the edge (orange line connecting the magenta with the green box on Nick Rhodes).
At least 4 pips, but probably less than 16 for the beat. Wave 5 is still on for a day or two longer. A bow back that will eek out a higher high with the momentum lost on the way.
The mapping market starts with a steep change in futures contracts holdings, a sudden imbalance due to fair value concerns.
The blast-off move is going beyond the red line and consolidating there.
They hijacked the bombing weekend’s sudden found excess volatility with the gap down.
The red line is still a 10-sample low plus 90 pips
ninup[i-1]=iLow(symbol,0,iLowest(symbol,0,MODE_LOW,10,i-1))+900*Point;
My standard way of measuring how stretched the market becomes is by plotting the distance from the 9-day EMA band. This value can be utilized in the future when wanting to spot the challenge and shortfall from this first move.
The rotating out part is there to show that the core holdings have just become 5% less, which makes the turn of the tide possible.
Think of it like this: two checkpoints, the price is a lot higher, but there are significantly less long holders -> the price should reverse.
This Wave 5 came with a 4.75 stretch on the first move up.
Today’s maximum stretch was at 4.57 which would make for a 4% loss.
The Wave up seems to be up.
Now, notice that every time the price tested outside the house on the upside, then failed back inside, it has ultimately made it to home: beyond the E-32, and another leg perhaps below the E-44.
The same movie over and over again.
The reason why it could be different this time, is the divergence between the measuring points.
I want to release these notes, so I won’t start on the horizontal arrows and the upside break 16-pip trade this time.
Things are in motion. There still haven’t been any closes below the Server (E-44 HL2), but that may occur next. A right shoulder up to the last established level is still a possibility for a kiss goodbye around 1.1813, but this is no longer a safe buy.
So you should get excited if you see a Maroon, downwards tilted arrow after a green one.
However, you would need to legs to stand on. X and Y were in this case 3 hours apart, the maximum time allowed is 8 hours. Y does not have to make a beat, it has to come within 4 pips from the X.
//downside
if (
i>0 && Low[i+1]==iLow(symbol,0,iLowest(symbol,0,MODE_LOW,6,i+1)) &&
iFractals(symbol,0,MODE_LOWER,i+1)
) {counterd=1;
if (i>0) {
j=i-1;
while (j>0){
if (MathAbs(Low[j]-Low[i+1])<40*Point && iFractals(symbol,0,MODE_LOWER,j)) break;
j--;
}
if (i>0 && j>0 && j>i-8){
ObjectCreate("KAROLYII"+DoubleToStr(i), OBJ_RECTANGLE, 0, Time[i+1], Low[i+1]+40*Point , Time[j], Low[i+1]);
ObjectSetInteger(0,"KAROLYII"+DoubleToStr(i),OBJPROP_COLOR,clrLimeGreen);}
}
}
So the one example was the same thing 5 hours apart (green rectangle on the right with brown arrows in front).
This little dip lower is the volatility boost necessary for a good start.
In the next one, the first green rectangle did not produce a new high. I’m telling you, the extra volatility is necessary.
There were 8 hours between the X and the Y before the last run up.
Now you have the volatility boost, but the Y leg has not yet printed. Does this mean inability to make a higher high? In my opinion, yes. The trick would be if the price would go below the fractal low by more than 5 pips. That would mean canceled.
There was a powerful punch line in my head for this post, saying, dude, where is the imbalance at, what fair value crap?
But the way I churned things out wasn’t snappy enough to make it funny.
There are two kinds of markets based on volatility. Tracking and mapping.
The tracking market fails to make a break at the yellow line, the mapping market manages to sustain it. You can see on the image a agents Map! print, which was a Tide (“t-“), but the draft would overwhelm the tide crash and keep on going 25+ pips later.
See the yellow line? The thrust did not make it beyond (thus I colored it purple – the downside version is trickier). The direction’s color changed, but there is an incubation period where a couple more higher highs could be printed.
Historical example:
There were 3 more legs up, two higher highs made, and the total distance put beyond the initial high was 18 pips. The total duration was 14 hours.
This market is in between configurations (outside from the 200-hour low and from the 200-hour high by more than 80 pips both), currently girating between the upper and the lower guard rails (within 1 fluctuation maximum from the 9-day EMA band).
A swing high is in the making.
This requires the week to close down by 91 pips after a new high was made during the prior week.
Wherever the new week opens, typically you would get a move back up before proceeding lower.
The move can be anywhere from 25 to 54 pips, but 51 seems to be a frequent answer. How do you short that? You go neutral if you are long at 25 pips from the low, and start adding shorts as it moves higher. Every 4, 5, 10 pips. You decide on a maximum size and divide it by 5. Or securing the bulk first.
I could picture a small gap down, mostly because of the spread expansion, but still missing or barely touching the back of the house (Gainsboro). Next move would be another failure at the front of the house (higher Gainsboro), but this time it could scrape/pierce the 80-pip brown line above. Just like on the downside (see cyan candle down) , that would make for an excellent point to fail at.
What do you know, that’s 50 pips up from last week’s pivot.
If there would be another “M”, miss at the back of the house, at the next visit on the way down, that would make for a good point to add to a short.
The move back up came from a deeply oversold condition, after a couple of false starts to the downside (the stochastic wasn’t ready to give much).
The holding up / peg was most likely an opex-optimized robbery.
Lastly, for all the Euro (&GBP) news, the bar is raised (making it easier to miss) and the Dollar news has discounted targets on Monday, nurturing a Dollar rally environment.
Tid means Time. Also, a way to shorten, Tide Turning.
The circled numbers are settled ones. They change at the top of the hour with a new settlement. The first number is the maximum distance achieved from the 10-sample low/high, and the second is the 200-sample one.
Volatility measurements that can help you figure out the point when the counter-directional volatility can no longer be compressed and it steps outside the trench.
I monitor for a 1:8 ratio on the upside and a 1:10 ratio on the downside. It is the start of a 3-point or even larger turn, so the low/high is by no means untouchable, but likely isn’t gonna get exceeded by much. 10 pips would be a lot already, 1-4 pips is typical. Only when the skew is steep would you not be able to match the low/high.
if (High[i+2]>iMA(symbol,0,32,0,MODE_EMA,PRICE_MEDIAN,i+2) && ExtATRBuffer[i]<25 && ExtATRBuffer[i+1]<ExtATRBufferf[i+1]/8 && ExtATRBuffer[i]>ExtATRBufferf[i]/8)
if (ExtATRBuffer2[i]<22 && ExtATRBuffer2[i+1]<ExtATRBuffer2f[i+1]/10 && ExtATRBuffer2[i]>ExtATRBuffer2f[i]/10)
There are not a lot of market models that can keep you in the picture and on the right side during a Powell press conference. So, let’s see what happened in the house.
For the show a Leg2 ended in a tide turn.
Inside the house, there were 3 Failures of trying to leave at the front of the house, 2 misses at the back of the house and then you got a the first leg out. After that the market was either going to come back to the E-32 or fail to re-enter the house.
The first leg ultimately made it to the yellow, maximum effort line (professional volume appeared) and a tide turn printed.
What are we looking for? After Wave 1, the E-32 is behaving as a resistance. If this were to go out at the rear end of the house, you would have a 2nd leg that you should not be fading at least until you see a ride change.
No one really has the upper hand while inside the house. A failure or a miss by the front end may still be in the cards first, since a tide print hasn’t been made so far.
Overall, this is going lower, as there has not yet ben a thust on the downside, but this does not mean short at market.
Glossary.
if (ExtATRBuffer[0]>24 && ExtATRBuffer[0]<32 && ExtATRBuffer[1]<28 && ExtATRBuffer[2]<28) ObjectSet("PENELOPED"+6,OBJPROP_COLOR,clrYellow);
ObjectSetText("PENELOPED"+6,"Short Comp: "+DoubleToStr(NormalizeDouble(ExtATRBuffer[0],2),1)+" "+DoubleToStr(NormalizeDouble(ExtATRBuffer[ArrayMaximum(ExtATRBuffer,10,0)],2),1),19,"Arial Black");
if (ExtATRBuffer[0]<(ExtATRBufferf[0]/8)) ObjectSet("PENELOPED"+6,OBJPROP_COLOR,clrMediumSpringGreen);
The main difference between an open top/bottom and a closed one is the thrust distance from the 6-hour low/high exceeding 84 pips. Those are the green and the red lines.
Open means that one or more higher highs / lower lows are of high likelihood.
If it does not say closed, it is open.
Now, a bit about the house where it all happens.
The house must be upright, meaning the 12-sample low plus 46 pips has to be above the 12-sample high minus 46 pips. In other instances, I dim the line.
F is a failure at or just outside the front or the back door.
32 is the 32 EMA. This is where they would step up with aggression to try for a slam dunk.
The Trap was a move that was a second time out and fell shy of the 84-pip line.
The goal is to score beyond the yellow line (see the very first image), which I call the max effort zone. It is 84 pips from the 10-sample low/high with a 6-hour delay.
All these dumb f*cks, with trading, is reactive and react, don’t predict. God forbid having a trading plan. Better yet, never even open a trade. I hate one-size-fits-all all people, even the monochrome meant more colors.
Trading should be event-based, and you should have flow charts about how the next events could /should play out.
Name the event.
Big Blast Thrust.
(The Brown Markers are the first “Established” levels and their back tests. The best entry locations by far.)
Find more of these. I have 1 recent example.
Because of the overt, excessive size (125+ pips), the next weak point would be a buy.
E=Escrow, A=Adjustment, T=Thrust
The crucial things are the back test / bow back. As the guy with the more than 190 reputation points calls it, the completion of the M pattern.
Realize how clean and unobstructed the move is to the escrow & adjustment low.
The next event is the whip-tail. 4 hours of a lift up before a one hour quick flush (thrust).
By the way, you are not gonna find true knowledge or deep understanding on YouTube. The default is the grifter-scammer. They always have something to sell you. Let it be a lifetime membership at 90% discount ot an indicator for.TradingView for $1500 a pop from Mr “Don’t Call Me A Scammer,” inside curviture-outside curviture guy who is clearly trading demos with max leverage to make you drool.
Remember Spongebob in front of the dryer asking, Do you want another spin? I’m buying!
So, think about this for a second, does the market ever turn around without making a thrust first?
The largest beat after a thrust caps out at about 18 pips. The Gray ones are meaningless by themselves; on the upside, 57 pips seems to be the minimum needed.
True knowledge is knowing what to look for, and the exercise to finding it is called filtering.
Lyrics of Croc Dundee's Dinner Date from the album Rocking Under
Croc Dundee, G' Day mate, you're on this track Outback where stories turn and never look back The moon will guide us, lighting up our way Where the wild meets the mild in this outback ballet Getting closer now, to the flickering flame The dinner date awaits, let's play this game [Pre-Chorus] A touch of excitement, a pinch of fate Underneath the skies, you illuminate So much to see, so much to share In this land of dreams, we'll truly declare Croc Dundee, G' Day mate, you just got scheduled a dinner date Outback Stake house, by the million stars hotel, if all goes well, all is well, if it's a flop, oh, well. What are you in the market in a Kangaroo-style market?What was your favorite stock again? (Microsoft?!) If there will be showing on the date? Would she be a 9 or a 10? React, don't predict. Come over here, come here a minute... I was only kidding, disappear! Snake jacket and crocodile hat, Tarantulla armpit goes just fine with that. Not much taste, but you can always put more pepper on the steak, Harry Cherry-popper. Everyone's ancestors were prison guards in this vast land.
You can divide the market in two categories based on daily volatility. Mapping is a high & expanding volatility market, whilst a low volatility market is usually a tracking market, going nowhere fast.
My proxy for the volatility is the width of the daily 30-sample BB (HL2), when below 380 pips, that’s the Tracking zone.
The tracking market is producing spike highs and lows and when finding nothing better to do, it retests these spikes (a re-test is a hit within 4 pips, and the timer starts 1 hour later). The yellow lines are being carried over asking for a test.
This lead-up is just for a smirk at an imbecile YouTuber, who is calling these missing backtests “imbalances.” What exactly is not in balance here?
The second thing to talk about is gauging strength.
This is my contribution here. 11-sample high and lows on the hourly displaced by 82 pips and delayed by 6 hours.
The Karma of the market is that strength becomes weakness, weakness becomes strength. This clearly explains “The Shape”.
Now, the main course is that within the Tracking market, the boss thrusts tend to be 90 pips long. Let’s call them a blast, or “turning point” (life investment).
The sequence is Acceleration, Higher High – even if it was 1 pip, then the thrust that went outside the strength contraption.
This blast is virtually the mirror image of this one below.
The Lower Low was 11 pips out. 10-16 is the normal beat.
Make note that they both made a run for the opposite yellow and had virtually no counter moves on the first leg.
By the way, during the Mapping market, the Boss Blast is 169 pips measured from the consolidation mean.
Based on the earlier image, there would be a miss of the opposite yellow line next (perhaps with an Escrow, Adjustment high, and a Thrust sequence to underline the event).
If I had to guess, I would think the low would receive a back test (at least the previous one did, and made a 5-pips beat prior), but the same time, you have made 3 fractals already, so I think it is a matter of how we open that gets to decide over going back down first or not.
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