Do you ever consider the possibility that when is the price may be more important than where is the price?
By when, of course I mean the wave structure.
This morning’s wave 5 was a short one and it made a divergent double top with wave 3. I can’t draw from here, but I’ll walk you through it.
See the RSI2 peak in the middle reaching above 85? That was the measuring leg of wave 1up that was followed by a lower peak making the wave complete. Wave 3 kicked in upon taking out the pullback low of wave 1. Wave 3 made its measuring leg above 93 followed by the divergent higher high / equal RSI2 read. Wave 4 was the pullback to E16 (in blue), and wave 5 had a no strength push for a first leg and the second – that set up the double top, deepened the RSI2 divergence further.
What the market is doing now is setting up the first measuring leg of wave 1 (whoop) down.
The following applies in Fading Market
Bam can be faded: on the way back it would take out the back swing of Whoop.
Close it out beyond whoop upon an RSI2 divergence or upon the RSI2 swing surpassing the previous reference.
The WBB count starts from an outer stretch beyond E16.
Fade the struggle
Boogie has to make a measuring leg first and then beat it with a divergence, thus you should load up for the counter move on Boogie when it is applying pressure on its thrust peak failing to get something stick beyond.
Good going on this tiny account with 40%+ gains both days this week since the funding.
My best daily gain in September was 92.5% on a different account.
I did want to mention about how ominous the looks of the triple resistance above is on EUR (the Moat in Red, the median in white and the sample high in red – never seen this looks before, EUR may get creamed in the near future.
Price may be at a stretch here for a fading market (brownie points) but we at Whoop Bam Boogie Trading cannot advocate fading an opening move while the measuring leg is still printing. If short, consider a partial cover.
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.
For the trading in bear zone 1 different set of rules apply. The zone itself is between 1x and 3x fluctuation maximum distance away from the Mean, the Green River.
Supports and resistances have secondary to no importance, what you must resort to is the degree of the stretch and time. A range bound market – if a definition can be given at all, fluctuates between bear-zone-1 and bull-zone-1, since the bears are at disadvantage in bear zone 1 and of course the opposite applies at the other end. If someone makes a statement like “the bears are in control here” they do not know what they are talking about. In bear zone 1, the strong handed bears not only have to counter balance and exceed buying, but they also have to be put up with weak handed bears covering in droves (meaning they are also buying). The only weapon strong handed bears have is orchestrated effort, which entails waiting the right conditions to develop for a power move.
To act, which is dipping their paws into the short-honey jar, they must wait patiently. They must sit on their furry butt until Whoop, Bam and Boogie finished with making sandwiches in the kitchen.
Only then they can make an effort in stretching the rubber band further.
Market type – embedded oversold (3 daily closes or more in long term oversold – comfort levels 4H) – this tells you, that the direction is down, play counter trend only during exceptions, in a short window
LEMA configuration – Bearish: 30 min LEMA below 1h LEMA below 2h LEMA – plenty of resistance overhead
Daily fuel limits 1.0991-1.0975 remark: daily fuel limit was reached yesterday, so today may only be a no break extension – upside limits: 1.1096-1.1112
Last root (RSI2 divergence / beyond 30MA / Boogie man): ~1.1086 – remark: new root may be in the making with the current no break extension thrust
Is there a valid SOS (Sign Of Strength) / SOW (Sign Of Weakness) in place – meaning from the last RSI2 divergence; an SOS is only valid if it arrives on the first move (whoop), it has to stay on the same side of the 30MA, the disqualified ones, on Bam and on Boogie take on opposite meaning; if there is a valid SOS, look to cover your short below 15 on RSI2 and go long to the other side of the 30MA or to an RSI2 divergence
Daily energy bands range (from the middle to the MOAT): 1.1155-1.0956
Last line of defense: last support is at 1.1042, 1.1037
Point out the confirmation tail if there is one (a 2-4 candle sequence)
Where would you be wrong about your directional call?
Verdict: counter trend move may be almost here, cover shorts near 1.1037, go long for 2 legs up. Aim for the other side of MR. Maroon at 1.1077
So, where were you wrong about the upside? 5 pips below the last line of defense = 1.1032 – this should had been your plan B.
Where did price go to? Daily fuel limit highlighted above.
What was wrong with the trifecta of the three pushes?
The second one did not make a higher high (it had an RSI2 divergence of its own), and whilst the RSI2 peaks went ever higher, the 3rd run up ended up falling short of the 1st.
This was a bear flag, with a Boogie Man: the sign of strength came on the 3rd push and at the border of the neutral zone and bear zone 1, where bears reload. Incidentally the E16 was in the same location, which is a starting point for a wave 5.
Purple Haze just got hit
The daily fuel limits got modified a bit as the day progressed and another consolidation weight appeared slightly lower.
The Boogie man is a sign of strength at the wrong place and the wrong time.
The wrong place is: in the overbought measured by 30 sample stochastic D over low/high with 3 slowing (green oscillator), and the wrong time is at the end of a cycle.
The upside attempts can be grouped as a trifecta, with the individual attempts as Whoop, Bam and Boogie.
The sign of strength means a spike on the RSI2 HL2 to above 80.
You should be interested in the upside if the SOS comes on the first strike, and should be turned off is it arrives (barely eeks out the score) late in the game.
To add some extra content to this so far small blog entry, I should mention that with the reprise of Focal Candle I finally have returned to plotting hourly charts which brought along its 30SMA, so now I officially have 2 moving averages along with the standard E16.
The 30MA acts as a mediator, serves as a mean, and there are negotiations around it continue with the direction of the approach or reverse.
I don’t think I have discussed the 4H wave 2 finder routine so far, so here it is:
The idea is that the 4H Mr. Maroon (135E High & 135E Low) has been crossed for the first time in twenty-some samples and now we need to look up the second 4H doji in the past and have it faked out for a wave 2 / wave B.
Here it is:
…SOS attempt in the making
…now this was a tricky one. They utilized the bull vulnerability to the maximum possible extent. An SOS is a scratch if it spikes above the 30MA.
No sign of strength still since the last upper divergence. It is working on it now.
This was the ballpark target for the day based on the daily fuel:
1.1042 seems to fall between those two numbers.
…one more thing, remember the steep rally a few days back?
After the SOS print, the RSI2<15 is your long entry.