I had this framework in my mind around how to present something better than the oh-so-popular VWAP and so I came up with making some fun of Chew-ee-wap, the hairy, Wet-Ass Wookiee.

I think what I was trying to say is that it wasn’t the future.

It is my personal opinion that everything you will ever need for trading was already said in a pop song from the eighties.

The PSB was certainly onto something with the Two Divided By Zero, but Michael Cretu, the smoking samurai was a step ahead with his “Return to Zero” vocal insert.

So, what is the zero that a return is made to?

A zero can be 2 things. The E-44 or an opposing high / low.

The opposing high / low is a stick-out high low or a doji’s high / low.

Returning to zero is brought on by 2 things.

3 hourly closes with neither of them more than 7.5 pips from the other (magenta boxes) or a break of the most recent pressure wick that is in excess of 3.6 pips (red and green squares).

The numbers are the hours of separation counted from the 8EMA on opens.

The vertical lines are take-off failures, meaning no follow though on the following candle. If the separation is to the upside and the second candle closes lower than the first, that means that the landing gear could not be pulled in.

The indicator’s name identical to the blog entry’s title.

In a Cool Combination with Doctor Alban the Keltinger Chaos & the 15-min ATR Targets.

LYRICS:
I think it’s about time that I walk away, walk away
So I turn around to walk away but then I look back
Sad lady make me turn and walk away again

Even though it looks like it’s the future
It’s really a long, long, time ago
When there were knights
And they got into fights
Using sabers of light
Please remember
Even though some things look so familiar
They’re not really on Earth
Yeah, it’s a galaxy far, far away
Alien DNA walking ‘round every day
And no one notices

Well, I messed up
Yeah, I made a mistake
I can’t sleep
Have to find your place soon
My tailor’s awesome
All the people looking
Rolling like I’m platinum
You know I’ve gone a long way to
change my mind about us since I seen you
But I’m talking at my robot as you mill about the city
And I’m on my way
Girl, there’s something that you need to know

Even though it looks like it’s the future
It’s really a long, long, time ago
When there were knights
And they got into fights
Using sabers of light
Just remember
Even though some things look so familiar
They’re not really on Earth
Yeah, it’s a galaxy far, far away
Alien DNA walking ‘round every day
And no one notices

Ahhhh, space station blown away
(It’s not the future)
Ahhhh, floating in the diaper tank
(It’s not the future)
Ahhhh, space leprechaun fade away
(It’s not the future)
Ahhhh, cyborg with no big boy words to say
(It’s not the future)

Get turnt
Get real turnt
Get turnt
Get, get real turnt

Well I’m a jaywalker
Got a lot of fresh damage, oh no
I can’t always be around to
Explore foreign love
Overflowing for your love
At night I’m sure that when we argue
makes me dream about those demon fishies
It’s not the way that it’s meant to be and
I bless your outfit
Mmmm, that’s a good choice
What is he saying? I don’t understand
Listen girl
I hope the heartbreak leaves me on the weekend

Even though it looks like it’s the future
It’s really a long, long, time ago
When there were knights
And they got into fights
Using sabers of light
Just remember
Even though some things look so familiar
They’re not really on Earth
Yeah, it’s a galaxy far, far away
Alien DNA walking ‘round every day

It’s a place where
Little furry creatures dance but they’re not teddy bears
They’re an alien equivalent
And they may rage in familiar trees
But it’s not the Redwoods you see
Alien trees on an alien moon, oh-oh
It’s something else indeed
Alien trees on an alien moon, oh-oh
Time to break it down
Break it down, down, down, down

Yeah, I was big in Japan
I was king of Ping Pong
Yeah I was bad at tuba
And I’m sure you’d like me to bounce
Master, I need one of these
Do they come in threes?
‘cause I need to squeeze them
Yeahhh
Yeah, I was big in Japan
I was king of Ping Pong
Yeah I was bad at tuba
And I’m sure you’d like me to bounce

Sometimes that moment when you wish you could run and hide
Is when you find you need a new hyperdrive
We all sometimes wish we could get away
And if you try
Then you gotta just make sure if you hide in a cave that it’s
Really not some giant space snake

Even though it looks like it’s the future
It’s really a long, long, time ago
When there were knights
And they got into fights
Using sabers of light
Just remember
Even though some things look so familiar
They’re not really on Earth
Yeah, it’s a galaxy far, far away
Alien DNA walking ‘round every day
And no one notices

Even though it looks like it’s the future
It’s really a long, long, time ago
When there were knights
And they got into fights
Using sabers of light
Just remember
Even though some things look so familiar
They’re not really on Earth
Yeah, it’s a galaxy far, far away
Alien DNA walking ‘round every day
And no one notices

Get turnt
Get real turnt
Get turnout
Get, get real turnt
It’s not the future
Get turnt
Get real turnt
Get turnt
Get, get real turnt
It’s not the future

Don’t Cry (The Breakup of the World)

Sandra

people crowd together
why don’t you take it
wait a little longer
an’ see how they make it

twinin’ with time
why can’t you see me
risk of eclipse
if you can’t forgive me
return to zero

the breakup of the world
don’t cry
we’re gonna save our lives
an’ time is on my side
don’t cry
i’m gonna realize
the breakup of the world
baby please don’t cry
we can forgive
we’re gonna try
baby please don’t cry
i wanna live
i fear the breakup of the world

world is torn an’ tattered
why can’t you take it
hope a little longer
an’ see how we’ll make it

swallow your pride
why can’t you see me
risk of eclipse
if you can’t forgive me
return to zero

the breakup of the world
don’t cry
we’re gonna save our lives
an’ time is on my side
don’t cry
i’m gonna realize
the breakup of the world
baby please don’t cry
we can forgive
we’re gonna try
i wanna live
i fear the breakup of the world

Zero / Delerium

It’s your touch
Against the whiteout
Blind as a blizzard
I have been
Take me to zero
I, I, I’m a traitor
For your love
Cold as the ice-flow
I, I, I’m a failure
For your trust
Keeping me hollow
Take me to zero
It’s enough to sink
A lighthouse
It’s an masterminding sea
Your wave over-turns me
I, I, I’m a traitor
For your love
Cold as the ice-flow
I, I, I’m a failure
For your trust
Leaving me hollow
Take me to zero
I’m a traitor for your love
Cold as the ice-flow
I, I, I’m a failure
For your trust
Leaving me hollow
Take me to zero
And I never wanted to
Survive that wave
I never wanted
I never wanted
To be saved
And I never wanted to
Survive that we I never
Wanted to be saved
No, take me to zero
I, I, I’m a failure for your
Trust Leaving me hollow
Oh, Oh, take me to zero
I never wanted

There is a scene in the Asterix the Gladiator, where they invent a new, less bloody game.

The rules are simple, you are not allowed to say black, white, yes and no. If you do, you lose.

My intention with this blog entry to call attention on a self-imposed imprisonment that comes with drawing too many trendlines.

See the world is not black and white, it isn’t left or right and trading isn’t merely buying or selling.

When people draw a correction, this is what they always seem to do uniformly.

There are a lot of problems with this, even if you are conscious of the possibility that wave C does not always make a high beyond Wave A.

Here’s the recent ABC up.

Not only that the end of A did not coincide with the swing high, B, that was “supposed to be” a counter move, went completely sideways, it took out the high made by A, it ended more than half way up of its range, with way higher than the low that it made in the first hour. Some down wave that was.

Wave C made a high, Wave c of Wave C failed that high as well, but Wave C did not end until volatility wore off. Thus the end point and the furthest point did not coincide again.

If you want to count this wave structure up as 5 waves, be my guest.

So yeah, just about everything you think you know of waves is wrong, and I hope you are starting to get the picture that putting trendlines in the way of a corrective wave structure will get you nothing. They will walk back and forth through them like they never existed in the first place.

Does Smart Money understand, that sudden-found volatility will reverse on itself?

Does Smart Money understand that they command the new market direction after volatility dries up and act right after a hourly doji?

Is their favorite song called: Move Any Market?

Could it be that Smart Money is a bunch of opportunistic dudes of similar thinking?

Could it be that Smart Money is reading my blog?

Believing that the market can do anything at any given moment is absolutely the wrong approach.

The market can do a limited number of things and everything is the function of the underlying volatility.

Alright, here’s another one for you. How does a wedge look like?

Like this?

What if I told you that this below was a wedge.

And this.

The price movement does not have to resemble a wedge shape. You know, I hold your chin, you hold my chin, whoever smiles first is gonna get slapped..

A wedge is a period (10 hours plus would take my attention) lacking relative strength extremes, so the first extreme showing up is an instant fade. See there you go again with that narrowed in straight-line-jacket thinking.

Good thing I was here for you to pump you up with lithium.

if ((RSI2[i+11]>88.7 || RSI2[i+11]<9.5) && RSI2[ArrayMaximum(RSI2,10,i)]<88.7 && RSI2[ArrayMinimum(RSI2,10,i)]>9.5 && 
    !((RSI2[i+12]>88.7 || RSI2[i+12]<9.5) && RSI2[ArrayMaximum(RSI2,10,i+1)]<88.7 && RSI2[ArrayMinimum(RSI2,10,i+1)]>9.5)
    )

I haven’t made any adjustments to the weekly settings for a while.

Just as I could define the bear and bull market switch off on the daily chart as “3 constructive closes above / below God”, on the Weekly I have the E-55 HL2 as the line in the sand, and what I was missing is this being uniform. Now, the smileys (Market Mode) are prompted by well defined lines (E-59 is a factor as well). No more dual standards.

      ////3 closes above E-55
              if (Close[i]>iMA(symbol,0,55,0,MODE_EMA, PRICE_MEDIAN,i) && Close[i+1]>iMA(symbol,0,55,0,MODE_EMA, PRICE_MEDIAN,i+1) && Close[i+2]>iMA(symbol,0,55,0,MODE_EMA, PRICE_MEDIAN,i+2) && Low[i+3]<iMA(symbol,0,59,0,MODE_EMA, PRICE_MEDIAN,i+3)  && Close[i+4]<iMA(symbol,0,59,0,MODE_EMA, PRICE_HIGH,i+4)  ){
         ObjectCreate("TitusTFxx"+DoubleToStr(i), OBJ_TEXT, 0, Time[i+1], Close[i+1]+270*Point); 
            ObjectSetText("TitusTFxx"+DoubleToStr(i), CharToStr(74), 39, "Wingdings", clrDarkGreen);
            }  
      
      
            ////3 closes below E-55
              if (Close[i]<iMA(symbol,0,55,0,MODE_EMA, PRICE_MEDIAN,i) && Close[i+1]<iMA(symbol,0,55,0,MODE_EMA, PRICE_MEDIAN,i+1) && Close[i+2]<iMA(symbol,0,55,0,MODE_EMA, PRICE_MEDIAN,i+2) && High[i+3]>iMA(symbol,0,55,0,MODE_EMA, PRICE_MEDIAN,i+3)   && Close[i+4]>iMA(symbol,0,59,0,MODE_EMA, PRICE_MEDIAN,i+4)    ){
         ObjectCreate("TitusTFxx"+DoubleToStr(i), OBJ_TEXT, 0, Time[i+1], Close[i+1]+290*Point); 
            ObjectSetText("TitusTFxx"+DoubleToStr(i), CharToStr(74), 39, "Wingdings", clrFireBrick);

The Oscillator got some adjustments as well as the losing embedding limits.

In the end my true self won out. Screw everyone who are plotting oscillators and moving averages on closing prices.

///embedding definitions

if (iStochastic(symbol,10080,18,3,3,MODE_SMA,1,MODE_SIGNAL,i+2)<22 && iStochastic(symbol,10080,18,3,3,MODE_SMA,1,MODE_SIGNAL,i+1)<22 && iStochastic(symbol,10080,18,3,3,MODE_SMA,1,MODE_SIGNAL,i)<22 ){
 
                     ObjectCreate("Fracabbb"+IntegerToString(i), OBJ_RECTANGLE, 1,  Time[i+1], 24, Time[i], 0);
                     ObjectSetInteger(0,"Fracabbb"+IntegerToString(i),OBJPROP_COLOR,clrSalmon);
                     ObjectSet("Fracabbb"+IntegerToString(i),OBJPROP_BACK,1);
                     ObjectSet("Fracabbb"+IntegerToString(i),OBJPROP_WIDTH,5);   
                     embedded[i]=true;
}

if (iStochastic(symbol,10080,18,3,3,MODE_SMA,1,MODE_SIGNAL,i+2)>78 && iStochastic(symbol,10080,18,3,3,MODE_SMA,1,MODE_SIGNAL,i+1)>78 && iStochastic(symbol,10080,18,3,3,MODE_SMA,1,MODE_SIGNAL,i)>78){
                      ObjectCreate("Fracabbbb"+IntegerToString(i), OBJ_RECTANGLE, 1,  Time[i+1], 76, Time[i], 100);
                     ObjectSetInteger(0,"Fracabbbb"+IntegerToString(i),OBJPROP_COLOR,clrChartreuse);
                     ObjectSet("Fracabbbb"+IntegerToString(i),OBJPROP_BACK,1);
                     ObjectSet("Fracabbbb"+IntegerToString(i),OBJPROP_WIDTH,5);   
                     embedded[i]=true;
}

    if (iStochastic(symbol,0,18,3,3,MODE_SMA,1,MODE_MAIN,i+1)>72 && iStochastic(symbol,0,18,3,3     if (iStochastic(symbol,0,18,3,3,MODE_SMA,1,MODE_SIGNAL,i+1)>80 && iStochastic(symbol,0,18,3,3,MODE_SMA,1,MODE_SIGNAL,i)<80){
       ObjectCreate("Claim"+DoubleToStr(i), OBJ_TEXT, 1, Time[i], 84); 
                      ObjectSetText("Claim"+DoubleToStr(i), "!", 48, "Impact", clrCrimson);
                      ObjectSet("Claim"+DoubleToStr(i), OBJPROP_BACK,0);
                      ObjectCreate("Claims"+DoubleToStr(i), OBJ_TEXT, 1, Time[i], 80); 
                      ObjectSetText("Claims"+DoubleToStr(i), "!", 42, "Impact", clrYellow);
                      ObjectSet("Claims"+DoubleToStr(i), OBJPROP_BACK,0);
                       }
   if (iStochastic(symbol,0,18,3,3,MODE_SMA,1,MODE_SIGNAL,i+1)<20 && iStochastic(symbol,0,18,3,3,MODE_SMA,1,MODE_SIGNAL,i)>20){
       ObjectCreate("Claim"+DoubleToStr(i), OBJ_TEXT, 1, Time[i], 44); 
                      ObjectSetText("Claim"+DoubleToStr(i), "!", 48, "Impact", clrGreen);
                      ObjectSet("Claim"+DoubleToStr(i), OBJPROP_BACK,0);
                      ObjectCreate("Claims"+DoubleToStr(i), OBJ_TEXT, 1, Time[i], 40); 
                      ObjectSetText("Claims"+DoubleToStr(i), "!", 42, "Impact", clrYellow);
                      ObjectSet("Claims"+DoubleToStr(i), OBJPROP_BACK,0);
                       }

Just as using Median prices, using Stochastic D over the K remains my signature.

Now, the hands. There has not been a manual for them yet.

The “PUSH” in a direction is either the ending point or the following week the turn will complete – unless there is an embedding in the push’s direction.

What is important about the push is the close. When not embedded, anything beyond that particular close is a good entry for a fade, but 36 pips beyond are certainly not likely to occur.

When embedded, catching the falling knife goes like this: you take the furthest point made by the push (not the closing price), you place a 1/2 size fade at 30 pips out, a 1/2 size fade at 40 pips out, close all of your directional holdings 50 pips out and reverse / hedge 70 pips out. Rinse and repeat.

You can see that the embedding was lost on the next push up, so the push down fell under the “not embedded push” scrutiny.

Last modification was to incorporate the 14-sample Window Envelopes, for the histogram plots would always get priority and cover them out otherwise. From now on they are Bollinger Blue.

  env_u[i]=iEnvelopes(symbol,0,14,0,0,0,2,MODE_UPPER,i);
   env_d[i]=iEnvelopes(symbol,0,14,0,0,0,2,MODE_LOWER,i);  

Re-vitalizing the comfort levels helps you to understand that this dip into the oversold (blue marker) is a back test of the oversold and the time spent down there would likely be limited both in time and in distance. A right shoulder matching the left shoulders depth would be at 1.1182 or so, but there is no sacred script stating where the down move would have to be bought.

The 1st rule of God Day is that we don’t speak of God Day.

The second rule of God Day is that you don’t fade normally it.

Image 1 shows a Typical encounter with God, a non-typical and a KissGoodBye

The Typical encounter starts with Murena Williams ultimately dropping the ball at the fence, leaving God defenseless.

Concentrate on the fish-eye optic here. God’s weapon of choice is words, he tries to talk you out of crossing to the other side. His odds of succeeding are slim to none.

What I’m trying to call attention to here is that fading a Typical God Day 1 may have a risk of no return, and even a 280-pip one way ticket that would likely blow up your account, if not in the coming days, then perhaps 1,100 pips later. The Typical encounter should not be faded until 2 more days later.

I know, this is Friday, right before the close, and the downside crosses – apart from the one above are usually Non-typical ones. So, there shall be a KGB. Just remember to Save A Prayer for the Morning After.

God = Daily 20 SMA of 44 EMA HL2

In conclusion the Not Typical encounter Typically comes with a drop-away on day 1 or day 2 and a KGB on day 3.

Why Go?

Faithless

Don’t go
I didn’t know you’d be here
and I wasn’t meant to come
I’d be sitting watching TV
If there was anything decent on

If I’d missed the taxi
Or found nothing good to wear
But for some uncertain reason
Some strange uncertain reason
This is how it all
It all began

Why go?
Why go?
When you could stay a while

If I made some coffee
Would you sit and talk some more?
I know words are usually pointless
When you’ve used them all before

The way you smile fills the room
Stay a while kick off your shoes
Don’t go
Please stay
It always happens this way

Why go?
Why go?
When you could stay a while

The way you smile fills the room
Stay a while
What’s there to lose?
Thea way you laugh
When I say
Don’t go
Please stay

Why go?
Why go?
When you could stay a while

---

The Same Deep Water as You

The Cure

Kiss me goodbye
Pushing out before I sleep
Can’t you see I try?
Swimming the same deep water as you is hard

The shallow drowned lose less than we
The strangest twist upon your lips
And we shall be together
And we shall be together

Kiss me goodbye bow your head and join with me
And face pushed deep, reflections meet
The strangest twist upon your lips
And disappear, the ripples clear

And laughing break against your feet
And laughing break the mirror sweet
So we shall be together

So we shall be together

Kiss me goodbye
Pushing out before I sleep
It’s lower now, and slower now
The strangest twist upon your lips

But I don’t see, and I don’t feel
But tightly hold up silently
My hands before my fading eyes
And in my eyes your smile

The very last thing before I go
The very last thing before I go
The very last thing before I go

I will kiss you, I will kiss you
I will kiss you forever on nights like this
I will kiss you, I will kiss you
And we shall be together

---

Typical & Typical

Typical & Not Typical

Not Typical & Volatility Squeeze (sideways) – last one is a KGB

Not Typical

Hard to be consistent these days…

Parabolic reversal play

Examples of Cover low being violated the next day with no close back beyond 27 pips from the low:

Day 1: violation of C by 20 pips and close back up by 5 pips

Day 2: reflex move back up, 44 pips from the recent low

Day 3: kicking in at the low of the C, for a total swing length of 90 pips – new low remains untouched for 46 trading days.

Likelihood is very low: this occurred in a far, far away galaxy from God.

Day 1: violation of C by 28 pips and close back by 6 pips

Day 2: total annihilation starting

Day 3: low found at 124 pips from the swing high made after taking out C, low is still holding

Likelihood is very low: this occurred in a far, far away galaxy from God.

Example of above God violated at God.

Day 1: violation of C by 41 pips and close back by 20 pips

Day 2: drop starts, total sell off is 106 pips in a jerky manner, low held for 25 days

Likelihood is very low: this occurred with the bands trending higher, turning to a flat phase.

The following examples are not comparable:

Plan: buy for a move back to 1.1380+ before a drop to 1.1280

What the heck was that?

Let’s see what we know.

There was a rising wedge up with E89 providing the lower border.

The Drive (“0”) was ultimately followed by a Thrust. It went 72 pips below the 5-sample high which would mean a deep correction (for exceeding 62 pips) if the market was going up. But it wasn’t. It was putting in the finish for the Wave 4 down.

What about Wave 5 then? Is it over? Can’t say for certain, but there is more time left. If this closes back below the high of Wave 3 (currently below by 10 pips), then in terms of the purpose of making a beat beyond the high was met (10 pips here as well).

I think there should be a hourly doji printed sometime later tonight and there may be a reach for the high again afterwards, but that may be lackluster.

There are a number of problems here.

Today’s outside day is not an outside reversal up, since yesterday was a green candle. The rise in volatility at the same time hints a reversal transpiring.

Today’s sell off did not manage to prevent the Stochastic embedding. In fact, I was looking at them at the lows and never saw a print below 79.50 (K line).

The other problem with the reversal up is that the SuperTramp got reset by the violent up and down moves.

The Volume sequence starts with a strong selling, then professional buying, then an autction getting cut short by no more bets.

The most interesting clue about future prospects here is the God awful closeness of the Green River. The quick dip at the end of the Wave 4 was an actual mean reversion. The way I see this closeness is that another outside day tomorrow would price back below the mean.

I think the increased volatility is Dollar Bullish. I have no longs.

That’s how my daughter used to call the Blue’s Clues.

You probably don’t realize how bullish this setup is about to become:

But let’s make a step back first.

The bull flag becomes quite obvious on the daily chart.

The Stochastic 18,3,3 HL2 SMA’s K and D lines are both above 80, and have been over 80 for the second day in a row. If they both stay overbought, the market would be considered embedded. What does that mean? That breaks are a buy until you see one of the stochastic lines close below 79. By buy I mean a higher high is simply guaranteed. So, tomorrow is the big day to see by how much we can surpass the high (I’m still looking at 1.1528 as the separator between the daily blocks, so I think it is more important than that 1.1484 high, but of course we cannot know before hand.) As you can see, at the previous swing high in the middle of January embedding did not occur, for there was no 3rd day when both the K and the D lines were above 80. There is a good distance to the top, 60 pips from here sounds like a very good deal.

Now, back to the first image. First thing to notice is the purple line, which is the E89 HL2. Who is conscious of this MA? Smart money, professional traders.

Second thing to notice is the absence of lower lows. They are forcing everyone to chase this move up. No discounts would be given.

As good old Dutch used to say, when you have higher lows, the highs will take care of themselves.

Now, the next thing on the bottom indicator (the RSI with the deviation bands) has now a new line on it. I use the 20 SMA of the RSI14 for splitting the Money Flow. I ran a 5 sample average on the 14-sample MFI for an early bird special. As you can see below, this changes before the SuperTramp does.

SuperTramp is on the slow side, and you need 5 of the new color for the transformation to take place.

Currently we have 8.

Watch how the RSI is diving below the main line (middle of the 5) . In this field the indicator would only prompt buy signals.

The reason you did not get any sell signals is that the incline was not steep: I’m looking for a 2-sample cross over & peak out above the main line or a 3-sample cross outside the 2nd upper line from at least one below.

(RSI[i]>main[i] && RSI[i-1]<RSI[i] && RSI[i+2]<lower[i])

or

(RSI[i]>upper2[i] && RSI[i-1]<RSI[i] && RSI[i+3]<upper[i])

The SuperTrend indicator is available as source / compiled thanks to the works of Osama Mladen.

SEARCH

Settings for the hourly – as proposed

extern int                period       = 10;
extern ENUM_APPLIED_PRICE appliedPrice = PRICE_MEDIAN;
extern double             multiplier   = 3.0;

Now. Rules.

5 ticks is one color = flipping direction. From then on the direction of the trend was picked.

Less than 5 of the color: an episode called correction.

The 4+4 lines are displaced highs and lows by 25, 32, 55 and 62 pips.

Hitting the closer two lines are a pullback whilst the second two count as a correction.

Dojis. Shared the basic version on ForexFactory. The routine now plots the last 2, 3 and 6-doji ranges with increasing displacement as supports and resistances on the right margin with the numbers plotted. It also makes the thick blue, red and green lines depending on if the market has managed to close beyond that particular line for an idea of fake outs / current progression.

Plot E44 HL2 in Light Blue, because that’s always fun.

If price hits the middle of that blue halo, that’s an immediate short.

I was just curious about how far I could possibly push a SuperTramp indicator. Quite far. You cannot change the trending direction in less than 5 hours.

& I didn’t say Donald anywhere. It was quite classy of me.

Momentum means a million and one things for a million people. For me, it is about daily candles closing up / down 27 pips or not on the Euro.

A new Cover low / high is an indication of loss of previous momentum / possible reversal. Until a Cover high/low is printed the momentum shows up in the counter direction, the momentum is considered intact. A Cover low / high has to be a 4-candle low/ high. Inside candles, mere 2, 3 sample highs / lows don’t count.

First, the sensationalist part. A double top target (upon taking) out the low is 1.10752.

Intermission.

Look at all them Cover signals.

The current candle will receive its C on Sunday, it needs another candle to print first (cycle runs till 1 not 0), but you can already say it is a C because it is a 4-sample high that closed back down by more than 27 pips.

First rule of the cover candles: if the following day continues in the original direction of the momentum making a new higher high / lower low, but it does not close back 27 pips, you are looking at a Capitulation in progress.

Second rule: the displacement numbers in white are carefully chosen, 31 pips on the downside and 39 on the upside. Unless these numbers get violated, the Cap is considered intact.

When a cap is further in than the previous one, suspect some kind of a trendline forming.

Of course, if a new Cap gets printed further out in a sequence, that pushes the Cap moratorium out by the increment.

The gray arrows are independent of the C-s, but they often follow them up on the next candle. These serving signals are a 3-canle sequence with the middle candle sticking out and the 27-pip filter is active again. Plus there’s a pro volume filter to avoid crowding. The arrowed candle also surpasses the mid point of the prior candle and displays the color of the new momentum.

 ///////3-candle serving reversal arrows up
   if (Low[i]>Low[i+1] && Low[i+2]>Low[i+1] && Low[i]<((High[i+1]+Low[i+1])/2)  && Close[i]>Open[i] && Close[i]>iLow(symbol,0,iLowest(symbol,0,MODE_LOW,2,i))+270*Point
         && !gr[i]){
      ObjectCreate("Binga"+IntegerToString(i), OBJ_TEXT, 0, Time[i], Low[i]+20*Point); 
       ObjectSetText("Binga"+IntegerToString(i), CharToStr(241), 26, "Wingdings", DimGray);    
   }
      ///////3-candle serving reversal arrows down
   if (High[i]<High[i+1] && High[i+2]<High[i+1] && High[i]>((High[i+1]+Low[i+1])/2)  && Close[i]<Open[i] && Close[i]<iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,2,i))-270*Point
         && Close[i]-Low[i]<270*Point && !gr[i]
         ){
      ObjectCreate("Binga"+IntegerToString(i), OBJ_TEXT, 0, Time[i], High[i]+230*Point); 
       ObjectSetText("Binga"+IntegerToString(i), CharToStr(242), 26, "Wingdings", DimGray);    
   }

Now, let’s talk possible outcomes following a Cap candle up.

As per the image above there on the upside there are no back to back Cs on the upside, only on the downside prior to a Capitulation. This means, that if you get the the Cap extended come Monday, the odds would increase for a capitulation move being in place. Overall this bears very lowest odds.

Even lower odds still is that the new candle would make a higher high and would not close back by 27 pips by the time of the daily re-balancing confirming a Capitulation in progress.

We could say with high likely-hood that the next candle is going to be a black one. We could say that the low is going to be violated, but it may take more than one day. (In case of the rolling pin on the left, it took 5 days to cover the distance of 150 pips from the close to the low). In our case the close to low distance is 40 pips, this could fill in a sneeze. The recoils were 22, 19 and 19 pips on the previous examples. This would mean a lower high, as the current one is 34+ pips away.

Overall, a Cap on the upside (vs. the downside) is foreshadowing a sinister move on the downside in excess of 100 pips from the C’s close and could only be contained with either a momentum reversal (4-sample lower low closing back up 27 pips) or a serving day (gray arrow, discussed earlier). So watch out for a daily candle spiking back up more than 50% and having a Green color or look for a Cap print below the 1.1263 daily swing low, and in the meantime short the living lights out of this sucker.

In case you are curious about what my Energy Bands are thinking of the moves of late.

& here’s how regaining the momentum would look like:

take out the low and close more than half way back up of the previous candle

The structure is called an ‘Expanding” Flat if Wave B retraces between 105% – 138% of wave A, and Wave C ends anywhere beyond the end of wave A. Expanding Flats occur most commonly.

I use 8-pips displacement for the 2 dojis, 10 for the 3 dojis and 16 for the 6 dojis.

double kibecup=0;
double kibecdn=1000;

deletetxt1("Kibec");
i=1;
j=0;
while (i<lookback) {
  if (doji[i]!=EMPTY_VALUE){
      j++;
    if (Close[i]+100*Point>kibecup) kibecup=Close[i]+80*Point;
    if (Close[i]-100*Point<kibecdn) kibecdn=Close[i]-80*Point;
  }
  if (j>1) break;
  i++;    
}

ObjectCreate( "Kibeca", OBJ_HLINE, 0, Time[0], kibecup );
ObjectSet("Kibeca", OBJPROP_COLOR, clrDimGray );
ObjectSet("Kibeca", OBJPROP_WIDTH, 1 );
ObjectSet("Kibeca", OBJPROP_STYLE, 4 );

ObjectCreate( "Kibecb", OBJ_HLINE, 0, Time[0], kibecdn );
ObjectSet("Kibecb", OBJPROP_COLOR, clrDimGray );
ObjectSet("Kibecb", OBJPROP_WIDTH, 1 );
ObjectSet("Kibecb", OBJPROP_STYLE, 3 );

ObjectCreate("Kibec8", OBJ_TEXT, 0, Time[0], kibecup+65*Point);  
      ObjectSetText("Kibec8", "                      "+DoubleToStr(NormalizeDouble(kibecup,4),4)+"-2Res.", 11, "Arial Black", Maroon);  
       ObjectCreate("Kibec7", OBJ_TEXT, 0, Time[0], kibecdn-25*Point);  
      ObjectSetText("Kibec7", "                      "+DoubleToStr(NormalizeDouble(kibecdn,4),4)+"-2Sup.", 11, "Arial Black", Teal);  

This is gonna get steep, so buckle up.

When you are looking for the end of an impulsive wave structure, you are looking for 3 things:

• strength having transpired (Stochastic RSI, blue vertical highlights)
• a doji coming after
• as well as a settled fractal

Where this approach starts to fly against conventional wisdom is where the actual wave terminates – for that’s never a swing high or a low.

Think of this as a confirmation system, where you are finished only when the all stars align. In case of a Wave one, these three items can be on the very same candle. There are no rules for if the fractal or the doji is due first, but you should only start looking after the key vertical signal. And of course you would prefer the doji and the fractal to arrive on an equal or further out end in the direction.

---

In terms of where are we at, that’s not very clear.

The white down move is an ABC move down, would pass for a Wave 5.

The possibilities for this up move:

It could be a Wave 1 if it took out the swing high, which it has not yet.

A Wave 2 cannot retrace 100% of wave 1 says Elliott, but I don’t think that the down leg was a Wave 1.

There is certainly out of whack swinging of the pendulum, to shake everyone off by the time the real move comes. The Effect caused a counter Effect.

Looking at the image above I would say this is an enormous volatility whip, and from a slightly higher low a Wave 1 up could start.

This whip down whip up move steepened the angle of the axis.

Looking at this second image, the move up could be an ABC. This current move up has achieved 4.6x stretch from the mean. A real crash move could achieve a 9-11x stretch, and as the sequence goes, the downside is due for a spin. The counter move would be of similar magnitude, but (say 7-8x) but due to the distance traveled and the distortion of the angles this overall would take price much much lower even at the bounce high. Sorry, Mr. Hunter.

---

Last lesson: an end of a Wave may not mean the end of a Wave structure. Impulsive moves don’t end on strength, but on a reversal divergence. A “0” print on the RSI2 is a clue for you that you have not seen the top.

     if (RSI2[i]<87 && RSI2[i+1]>98){
         ObjectCreate("CTRYv"+DoubleToStr(i), OBJ_TEXT, 1, Time[i+3], 96); 
                     ObjectSetText("CTRYv"+DoubleToStr(i), "NOT A TOP", 16, "Impact", DarkGreen);
      }
      
        if (RSI2[i]>13 && RSI2[i+1]<2){
         ObjectCreate("CTRYv"+DoubleToStr(i), OBJ_TEXT, 1, Time[i+3], 26); 
                     ObjectSetText("CTRYv"+DoubleToStr(i), "NOT A BOTTOM", 16, "Impact", Purple);
      }

If today closes 27 pips below the peak (~1.1457), the reversal will have taken place.

The idea of putting Bollinger Bands at 1 & 2 standard deviations is to get help with finding buyable/sellable pullbacks & corrections. This of course can be a major help with getting the Wave Count right.

On cell phone this is quite easy. Set BBs on the “First Indicator”.

if (RSI[i]<main[i] && RSI[i-1]>RSI[i] && RSI[i+2]>upper[i]){
             ObjectCreate(0,"TLine"+IntegerToString(i),OBJ_TREND,indicator_window,Time[i+2],RSI[i+2],Time[i],RSI[i]);
                   ObjectSetInteger(0,"TLine"+IntegerToString(i),OBJPROP_RAY_RIGHT,false);
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_COLOR,clrWhite);
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_WIDTH,9); 
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_BACK,1); 
                   
                    ObjectCreate("TLiney"+DoubleToStr(i), OBJ_TEXT, indicator_window, Time[i], RSI[i]-30*Point);  
                    ObjectSetText("TLiney"+DoubleToStr(i), "MUST GO LONG", 13, "Impact", Purple); 
                   
      }
       if (RSI[i]<lower2[i] && RSI[i-1]>RSI[i] && RSI[i+3]>lower[i]){
             ObjectCreate(0,"TLine"+IntegerToString(i),OBJ_TREND,indicator_window,Time[i+3],RSI[i+3],Time[i],RSI[i]);
                   ObjectSetInteger(0,"TLine"+IntegerToString(i),OBJPROP_RAY_RIGHT,false);
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_COLOR,clrWhite);
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_WIDTH,9); 
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_BACK,1); 
                   
                   ObjectCreate("TLiney"+DoubleToStr(i), OBJ_TEXT, indicator_window, Time[i], RSI[i]-30*Point);  
                    ObjectSetText("TLiney"+DoubleToStr(i), "MUST GO LONG", 13, "Impact", Green); 
      }
      
     
           if (RSI[i]>main[i] && RSI[i-1]<RSI[i] && RSI[i+2]<lower[i]){
             ObjectCreate(0,"TLine"+IntegerToString(i),OBJ_TREND,indicator_window,Time[i+2],RSI[i+2],Time[i],RSI[i]);
                   ObjectSetInteger(0,"TLine"+IntegerToString(i),OBJPROP_RAY_RIGHT,false);
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_COLOR,clrWhite);
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_WIDTH,9); 
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_BACK,1); 
                   
                    ObjectCreate("TLiney"+DoubleToStr(i), OBJ_TEXT, indicator_window, Time[i], RSI[i]+9);  
                    ObjectSetText("TLiney"+DoubleToStr(i), "MUST GO SHORT", 13, "Impact", Purple); 
     }
     
     
      if (RSI[i]>upper2[i] && RSI[i-1]<RSI[i] && RSI[i+3]<upper[i]){
             ObjectCreate(0,"TLine"+IntegerToString(i),OBJ_TREND,indicator_window,Time[i+3],RSI[i+3],Time[i],RSI[i]);
                   ObjectSetInteger(0,"TLine"+IntegerToString(i),OBJPROP_RAY_RIGHT,false);
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_COLOR,clrWhite);
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_WIDTH,9); 
                   ObjectSet("TLine"+IntegerToString(i),OBJPROP_BACK,1); 
                   
                   ObjectCreate("TLiney"+DoubleToStr(i), OBJ_TEXT, indicator_window, Time[i], RSI[i]+9);  
                    ObjectSetText("TLiney"+DoubleToStr(i), "MUST GO SHORT", 13, "Impact", Crimson); 
      }

Show must go Short…

Check again in the Trading Masterclass #3 What Did I Say were the 3 sequential targets coming out of a capitulation, and see where price landed today.

…