Keying In On A Vision

Your centralized vision has a dual mandate: to see and to spot.

It is hard to see through a cloud of blur, to peer through a flatu-lenses.

So let’s hone in.

What has changed this week?

The company name… and along with it my trading philosophy.

May 14-20

Let’s cut to the chase.

Bottoms and less tops we’ve been talking of.

The key fractal is a fractal that is outside the pendulum’s body, it jams the hourly RSI2 to the floor for hours and is followed by an RSI2 relief.

if (i>1 && iFractals(symbol,0,MODE_UPPER,i) && High[i]>iMA(symbol,0,44,0,MODE_EMA, PRICE_MEDIAN,i)+350*Point && RSI2[i+2]>96 && RSI2[i+1]>96 && (RSI2[i-1]<90  || RSI2[i-2]<90 )) EU[i]=High[i];
        if (i>1 && iFractals(symbol,0,MODE_LOWER,i) && Low[i]<iMA(symbol,0,44,0,MODE_EMA, PRICE_MEDIAN,i)-350*Point && RSI2[i+2]<4 && RSI2[i+1]<4 && (RSI2[i-1]>10 || RSI2[i-2]>10 )) ED[i]=Low[i];

The one thing nobody seems to be making a study out of is the sequence of events.

You are not going to know if you have seen the key fractal until the ink dries on the RSI 2 hours later, hence price needs to be taken back to it for a dump.

What is the question mark called? Low key.

The fractal has 4 values, such as OHLC. In case of a measuring leg you can expect all of those values to be beaten if not briefly settled nearby with a handful of pips to show for at most.

In case of a divergent leg, the re-visit may choke at the second closest level of the OHLC.

Some Florida Keys for you.

What now?

We are headed to the 50EMA. Momentum is up, the temporary weakness was relieved by the daily candle being connected back to the 20EMA, closed right at the break-out level of the prior leg.

1.0682-1.0748

Didn’t I say that a Key is where the turn is?

Well, the pendulum band starts at around 1.0515. It is possible that this correction is not over yet, we merely saw the max volatility move and now the continuation divergence would print above the S30.

Without further consolidation, these are the statistical probability moves from here:

The previous leg down fell shy of the orange line by 40 pips when it was making a run for it. A similar magnitude move would equate to 1.0485.

Ideally there would be a third row print, i.e. close(s) below the shadow line (at 1.0521 currently), but we also need to consider that things are becoming more and more bullish on the way up and less and less may just be enough from here on.

Based on the stochastic bars, a head may be missing still.

All in all, keep shorts on a short leash (trail stop) & hold on tight…

Make or Wake?

Do or Why?

The subject is evaluation of the success of an impulse bottom.

First, an example of a successful Impulse bottom.

The maximum volatility move (first cube) is followed by the first pullback (#1 fractal) below the Hourly S30 moving average. The second fractal (#2) with the corresponding lower RSI2 print (second cube) is meant to be the higher low, and should not be violated.

The second example is of a not successful impulse bottom.

#2 was undercut a number of times. There was still a C leg taking price above the maximum volatility leg by 50 pips, but in terms of the impulse bottom, it did not prompt a reversal, the sideways action was a pause within the larger move,

Now, try to explain what went wrong with this impulse bottom:

…and what is right with this current one so far?

Opposites retract.

The Full Bounty

Do yourself a favor and plot some Bollinger Bands and a 9-day EMA (on medians) on your daily chart.

Try to identify out of the last 67 trading days, how many candles do not touch any one of the 4 lines.

I found these.

First thing to draw as a conclusion, is less than 1 out of 6 candles were left hanging (levitating with high libido). Or rather, they were not left alone: this “highly unstable” condition is a high ball for a slam dunk. Usually they get pushed onto one of the lines the very next day. The market prefers to be in a low energy condition.

Now, if we pay attention to the color, the ones that seemed to be in favor of bouncing up were those with a positive charge (pink candle) or a doji at the end of a cascade.

The black ones with their negative charges were either connected to the lower line or left alone hurdling in space until the space jam arm reached in, but by then the negative charge got reversed.

The sample size is not enormous, I am citing these things as curiosities and I fully expect the 9-day EMA to be re-connected on Monday, is all.

The Name of Game

Why don’t you talk to me… Won’t you come, won’t you come right now.

Music used to be so important. For instance, if you told me that your childhood was Crockett’s Theme, Paninaro and Maniacs of Noise, I would know exactly where you grew up: in Europe, a little to the south east (in the reception area of Croatia), grew up in the 80s and had an Amiga computer.

Mother, do you think they’ll try to break my bones?

Chartreuse = lower guard rail. Yesterday’s low was undercut by 22.5 pips.

Every tick you take, every pip you make, I’ll be watching you.

This pain is just too real.

Oooh-oooh-ooh the tide is turning.

I’m not saying the battle is won…

Bare Naked Notes

In a Bare market below Envelope 1 only Impulsive bottoms can trigger a counter directional rally that would last multiple days and would achieve in excess of a 100 pips from the recent low.

I use 3.5 and 5.55 for the other two displacements.

The first, red bottom example managed to start a rally that had multiple legs (3), of which the first one performed 320+ pips in order to carry out a kiss goodbye move to the dashed line.

Red bottom = 216 sample hourly lower low trigger leg.

On a close up, this is what went down.

The initial Max Vol move off of the divergent leg of the impulse bottom the RSI2 made only 1 dip below 12.5 for a continuation divergence.

The next counter move came off of a yellow impulse bottom.

The yellow bottom is an “inside bottom” the trigger leg was not a 216-sample hourly lower low itself.

It had a clear, 5-wave looks with RSI2 only dipping below 12.5 at the end of Wave 2 and Wave 4.

Interestingly, the top itself was a correction / continuation high. The rally length was 176 pips.

The current complex bottom had a red impulse low that was itself an inside leg, but the trigger leg had 216 empty hours before it.

There was a re-embedding of the 18-sample stochastic for another move down that made another inside impulse low. Blowing past the cover low would mean a capitulation. 171 pips.

This 153-pip move up was a serious labor. RSI2 goes too deep on this timeframe. By S20 I meant S30.

On the 4-Hour the RSI2 picture looks clean, but the pattern seems to be a broadening formation where the #2 low is lower than the trigger low and the #4 is lower still.

Based on this, leg 5 is proposed to be disappointing in length, yet it could also trigger a break-out at the white-out. Or it could be the place to pull on the toilet-chain.

Bare Market Ladies

If you had to ask, this was another inside, yellow impulse bottom. My routines did not pick it up because the close below exceeded 2 pips (7) and I’m looking for a range of 14 not 15 by standard.

(with those two temporary changes the plot would appear)

The likelihood is that the 1.0470 low is gonna get undercut as well if the lower trendline gets violated. Not sure by how much, could be anything from 1.0444 (projeced distance on the left in green) to almost 1.04.

The easiest market can be for you the hardest when you don’t know what the rules are.

Breaking The CAP

What is a CAP?

Pendulum inner band in blue, Pendulum outer in purple.

A CAP is short for a capsize attempt. An hourly separation from the 8EMA of Hourly Opens that ends up closing in opposition to the opening direction.

I use the second pendulum band (E-44 +-45 pips) as a filter to stay away from the trending mode.

The low / high would have to be inside the pendulum (E-44 +-35 pips) for the “Sell” plot to be displayed by an additional 2 pips.

The trap range mentioned is between the half of the candle and its end point plus 2 pips slack. The sell is yet another pip out.

For the remainder of this page we’re gonna take a look at the Impulse Top that was indeed a Vostroff Deccumulation.

An impulse move trails off with an RSI divergence. Not an impulse bottom does not mean not a corrective bottom, it just rules out one possibility due to strength.

The pattern was valid for the 13th hour did not get away from the trigger high by 50+ pips. The Entry was on the 14th candle anywhere above the 13th’s close.

Forgot to mention, the next candle has to confirm the capsize attempt.

The Vostroff-Accumulation

Sponsored by Craig &

An impulse bottom is formed with a breach of the Hourly 216-sample 2.5 std HL2 Hourly Bollinger Band and with a fractal print that is a 216-sample lower low that does not get closed under by more than 2 pips in the coming 14 hours despite of being challenged and briefly surpassed.

The middle of the text lines up with the trigger low.

The Vostroff-Accumulation starts with a volatility breach (i.e. price going above the 30-sample 2 std HL2 Upper Bollinger Band).

A crucial make or break point is the 13th hour’s close relative to the trigger low: the fire serpent cannot be get further away than 50 pips, otherwise the whole pattern would get invalidated (bogus with techno jargon).

After the volatility breach there are 3 selling legs to a support level. After the second leg down this level would become more apparent as some of the closes would start marking this level up quite clearly.

The third sell off would be a little shorter than the previous ones, making a higher low above the second low and it would merely touch it before receiving a stronger rejection.

The pattern may take 4 days to play out and would rake up 300+ pips from the low.

The bird signals? Left in from previous ventures. I now refer to them as E44 fountain switches and can’t quite remember why I did what I did with them, but they are sort of a confirmation of the new direction.

   ///E44 fountain switch
    
    if (i>0 && iFractals(symbol,0,MODE_LOWER,i) && (iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,5,i))-Low[i])>240*Point && Low[i]<iMA(NULL,0,44,0,MODE_EMA, PRICE_MEDIAN,i)+30*Point
          && RSI2[i]>5.5 && RSI2[i-1]>5.5 && Low[i]<(Low[i+3]-30*Point)
          && (Low[i]-iLow(symbol,0,iLowest(symbol,0,MODE_LOW,11,i)))<360*Point 
          ){
         j=i+3;
         while (iFractals(symbol,0,MODE_LOWER,j)==false)
         j++;
         if (Low[j]<Low[i]+30*Point){   
          ObjectCreate("VALIy"+IntegerToString(i), OBJ_TEXT, 0, Time[i], High[i]-50*Point); 
            ObjectSetText("VALIy"+IntegerToString(i), CharToStr(94), 66, "Wingdings", Black); 
            ObjectCreate("VALIx"+IntegerToString(i), OBJ_TEXT, 0, Time[i], High[i]-50*Point); 
            ObjectSetText("VALIx"+IntegerToString(i), CharToStr(94), 56, "Wingdings", SpringGreen); 
         }
      }

I believe this pattern to be a Vostroff-Accumulation suspect:

The level seems to be 1.0520

This time siphoning got carried on until the US close.

You can see the higher support level that was made with the last 2 hours of selling right into the daily Bollinger Band. Things are happening slower this time, but this does not mean that they are not happening.

Fondant

Some newer plays.

A fondant is one or two candles with a total length of a 1000 points with wicks both on top and bottom in excess of 24 pips. A fondant defines a trading range. A look above / below and fail would be targeting the other side of the range.

The circled areas are look above / look below and fails. There was only one instance out of the 4 where the next candle took out the terminal point and drew a new fondant. Where was this exactly?

I realize I have not covered all possible sequences just yet, but this is where this starts.

   ////szaloncukor
 
   if (High[i]-Low[i]>1000*Point && High[i]-Open[i]>270*Point && Close[i]-Low[i]>270*Point && i<30){
   ObjectCreate(0,"Bing;"+IntegerToString(i),OBJ_RECTANGLE,0,Time[i],iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,1,i)),Time[0],iLow(symbol,0,iLowest(symbol,0,MODE_LOW,1,i)));
ObjectSet("Bing;"+IntegerToString(i),OBJPROP_COLOR,clrGray);
ObjectSet("Bing;"+IntegerToString(i),OBJPROP_BACK,1); 
ObjectSet("Bing;"+IntegerToString(i),OBJPROP_STYLE,2); 
ObjectSet("Bing;"+IntegerToString(i),OBJPROP_WIDTH,2); 
   }
   
      ////szaloncukor kombo
 
   if (High[i+1]-Low[i]>1000*Point && High[i+1]-Open[i+1]>240*Point && Close[i]-Low[i]>240*Point && i<30){
   ObjectCreate(0,"Bing;"+IntegerToString(i),OBJ_RECTANGLE,0,Time[i+1],iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,2,i)),Time[0],iLow(symbol,0,iLowest(symbol,0,MODE_LOW,2,i)));
ObjectSet("Bing;"+IntegerToString(i),OBJPROP_COLOR,clrGray);
ObjectSet("Bing;"+IntegerToString(i),OBJPROP_BACK,1); 
ObjectSet("Bing;"+IntegerToString(i),OBJPROP_STYLE,2); 
ObjectSet("Bing;"+IntegerToString(i),OBJPROP_WIDTH,2); 
   }

The CHIGH is a Continuation Divergence High. The explanation has to do with the fact of stochastic embedding.

If the market makes a Cover high inside the oversold field, that is the start of a divergent leg down.
///////4-candle high closing back down 27-pips cover
if (iStochastic(symbol,0,18,3,3,MODE_SMA,0,MODE_MAIN,i)<18)   ObjectSetText("Bingi"+IntegerToString(i), "CHIGH", 26, "Impact", Red); 

Let’s toy around with the new boxes a little more for the remaining time.

Where would be price headed and where could it potentially fail in doing so?

Making it into the bottom half of blue box and reversing would mean failing to leave this last gray field. Making it into the upper half would make the failure even more severe: that would be a failed break out as well a failed re-entry. If you look left, you would see a cover low “C” at the same area, that wick is where I would expect the aggression to set in.

This of course if the the last C77 low does not get taken out – remember the exception shown above

or a new 2-candle combo does not come up with a new range of their own on the way up.

If you want your mind to be blown, plot some Bollingers on the hourly with 216 sample and 2.5 std dev over HL2.

Just look at how far this could go with the BB mount opening wide.

Homework: How do you grab an impulse bottom?

   if (iFractals(symbol,0,MODE_LOWER,i) && iLow(symbol,0,iLowest(symbol,0,MODE_LOW,120,i))==Low[i] && i>0){
      j=i-1;
      lowerlows=0;
      while (j>0){
            if (Low[j]<Low[i]) lowerlows++;
            if (Low[j]<Low[i] && Close[j]+20*Point<Low[i]) break;
            j--;
      }
      if (j==0 && lowerlows>0){
            ObjectCreate("DELIxx"+IntegerToString(i), OBJ_TEXT, 0, Time[i], Low[i]-50*Point); 
            ObjectSetText("DELIxx"+IntegerToString(i), "IMPULSE BOTTOM", 19, "Impact", Crimson);
      }      
    }

Hello, ooh-oh, Vienna Calling

Lift up the yellow receiver, I’ll make you a believer. The vertigenta plot was courtesy of Nick Rhodes.

 ////////lower vertigenta
      if (((score[i]==0 && score[i+1]==-3 && (score[i+2]==-2 || score[i+2]==-1))  || (score[i]==0 && score[i+1]==-3 && score[i+2]==-3 && (score[i+3]==-2 || score[i+3]==-1)))
         && Low[i+1]<iMA(symbol,0,207,0,MODE_EMA,PRICE_HIGH,i+1)

End of M leg – same plot, just on the lower indicator

Participation & Progress

What is that you’re always looking at? – someone asked me today.

My response was: this is hell, you are keep on confusing knowledge with being lucky.

No, I am not a promoter of trading.

But if you are damaged goods and happen to be here, let’s make it memorable. It will feel like walking on Strepsils.

Daily chart, candlest├╝cks, in the middle of the boring rain.

One by one.

Candelloni #1: Rejection at the 20 SMA. Long wick on the top for strong selling pressure, much less buying pressure by the close, the body shows progress made by the bears. Suspect of a new leg down (the divergent leg that kicks off with a continuation divergence).

Candelloni #2: Follow through. More daily progress made by the bears, the wick on the bottom shows a bit of increased selling pressure, but less than 27 pips (not an official cover low). Volatility is on the rise.

Candelloni #3: Increasing selling pressure. Much more daily progress made by the bears, we are on our way to the Bollinger Band. Buying pressure wick is getting shorter.

Candelloni #4: Increasing selling pressure. More daily progress made by the bears, the wick on the top shows growing bear aggression (and they show for it too), the wick on the bottom is virtually non-existent at the Bollinger Band, foreshadowing the upcoming push against the Band on the outside.

Candelloni #5: Selling pressure, volatility maintains, even more ground gets covered. There is 27+ pips cover at the end of the day with the 4-sample lower low outside the Bollinger Band. Now the bears are pushing it (borrowed time), price can only stay outside the bands less than 5% of the time.

Candelloni #6: They are making a push yet again from the Bollinger Band, bears are fearless and possibly topless too at this point. Being drunk on success does not help. You better cover with this lower low.

You’ve been candlestruck.

A doji is like a small black hole. Somebody diverted every order into their pocket in that hour.

How does a “the low is in” show up on a chart? Perhaps in a form of a hedge-level break that the market does not manage to get too far from and cannot seem to be able to close below on the hourly.

Two examples:

Notice the 9 pips progress that was made.

Notice the 9 pips progress that was made.
They sold the Bollinger Band. It happened to line up with the last doji. Support and resistance are made by separation (from the 8-EMA of opens) and time, 2-4 hours allotted. If the count goes higher, the touch-and-go lows would represent a poor low (one example on the left with the check mark) that is not going to hold up and is likely going to get challenged in the not too distant future.

You say you don’t believe in separation and counting? What is your religion? Do you feel lucky, cyberpunk?

All that’s left is for me to put on my velvet shoes and show you to the exit.

Some bonus Urban Cookie Digestive for you.

No Audience Special

A confession to make. I had to bend the daily filter to form-fit the latest turn up that made it to the middle BB to be picked up by my pale green highlight. So now here’s the half a step back to the benefit of the few whom kept on coming.

Seriously, there is no point in keeping this up for 6 total visits on an article.

The half a step back is the new blue shading as a reminder for the run-up to be to the middle of the Bollinger – with the same color, but not a final low – too oversold.

There was one example earlier where the C77 low was undercut two folds (130 pips in total). This one went to 140 pips in contrast. What followed the last time was a 560-pip rally.

This one barely missed the BB middle.
/// 3-sample low with stoch reading below 4.5 or 9.5 to 18
   if (i>0 
   && (!(c77[i+1] && Low[i+1]<iBands(symbol,0,20,2,0,PRICE_CLOSE,MODE_LOWER,i+1)))
   
   && iLow(symbol,0,iLowest(symbol,0,MODE_LOW,5,i-1))<=iLow(symbol,0,iLowest(symbol,0,MODE_LOW,6,i-1)) 
   && iLow(symbol,0,i)==iLow(symbol,0,iLowest(symbol,0,MODE_LOW,2,i-1)) 
   && (st18[i]<4.5 || (st18[i]>9.5 && st18[i]<21.5) || (st18[i+1]>9.5 && st18[i+1]<18.5))  
  
    && Low[i]-Low[i+1]<430*Point 
   && (Low[i]-Low[i+2]<430*Point ||  Low[i]-Low[i+2]>1000*Point)
 
   && (High[i]>High[i+1]-80*Point  || (Open[i]<iBands(symbol,0,20,2,0,PRICE_CLOSE,MODE_LOWER,i)+50*Point && Close[i]>iBands(symbol,0,20,2,0,PRICE_CLOSE,MODE_LOWER,i) ) )
       && Open[i]<Close[i] 
     && High[i]<iMA(symbol,0,44,0,MODE_EMA, PRICE_MEDIAN,i)
      && High[i]<iBands(symbol,0,20,2,0,PRICE_CLOSE,MODE_MAIN,i)-290*Point 
      && (MathAbs(iBands(symbol,0,20,2,0,PRICE_CLOSE,MODE_MAIN,i)-iMA(symbol,0,44,0,MODE_EMA, PRICE_MEDIAN,i))>380*Point  ||  High[i]>High[i+1] )
      && Low[i+1]>iBands(symbol,0,20,2,0,PRICE_CLOSE,MODE_LOWER,i+1)-700*Point  
      && Low[i+2]>iBands(symbol,0,20,2,0,PRICE_CLOSE,MODE_LOWER,i+2)-700*Point
 ){
   //&& (st18[i]<4.5 || (st18[i]>9.5 && st18[i]<18))  
   
         ObjectCreate("Bingt"+IntegerToString(i),OBJ_VLINE,0, Time[i], 0);
         ObjectSet("Bingt"+IntegerToString(i),OBJPROP_COLOR,clrBlue);
         if (st18[i]>9) ObjectSet("Bingt"+IntegerToString(i),OBJPROP_COLOR,clrPaleGreen);
The trendline that was started by the double C77 was hit today.