Analysis based on Dow Theory.
Price
A sequence of LLs and LHs is called downtrend. A decline from Relative High to Relative Low is called a major phase (impulse). A rally from Relative Low to Relative High is called a corrective phase (reaction, pullback, recovery). Major phase + corrective phase form full cycle. In other words a cycle in a downtrend is a movement started from Relative High going through consequent Relative Low and to consequent Relative High. The downtrend is considered broke when instead of installing a LH price goes to HH. In this case the movement from the most recent Low to a new Higher High will be the first major phase of a potential uptrend. As you see the last major phase of the downtrend is not followed by a corrective phase but is followed by the major phase on an uptrend. This means that the last downtrend cycle stays incomplete. That's why it is called half-cycle. ALL trends end in half-cycles.
Volume.
Volume expands in the major phases of a trend and contracts in corrective phases. If price installs a major phase but volume doesn't expand this indicates that we potentially have the last half-cycle of the trend. If volume expands in the major phase and then it expands even further during the corrective phase this indicates that this corrective phase will most likely turn into a major phase of an opposite trend.
Time
The major phases of two adjucent cycles tend to show harmony both in amplitude and in time. AB=CD , Three Drives Pattern based on this phenomena. But corrective phases also tend to be equal in price and time. Reciprocal AB=CD or 5-0 Patterns exploit this phenomena. In the majority of cases major phases are steeper than corrective phases. This means that less bars required for a major phase to travel its amplitude than for a corrective phase to recover even the part of it.
Price
A sequence of LLs and LHs is called downtrend. A decline from Relative High to Relative Low is called a major phase (impulse). A rally from Relative Low to Relative High is called a corrective phase (reaction, pullback, recovery). Major phase + corrective phase form full cycle. In other words a cycle in a downtrend is a movement started from Relative High going through consequent Relative Low and to consequent Relative High. The downtrend is considered broke when instead of installing a LH price goes to HH. In this case the movement from the most recent Low to a new Higher High will be the first major phase of a potential uptrend. As you see the last major phase of the downtrend is not followed by a corrective phase but is followed by the major phase on an uptrend. This means that the last downtrend cycle stays incomplete. That's why it is called half-cycle. ALL trends end in half-cycles.
Volume.
Volume expands in the major phases of a trend and contracts in corrective phases. If price installs a major phase but volume doesn't expand this indicates that we potentially have the last half-cycle of the trend. If volume expands in the major phase and then it expands even further during the corrective phase this indicates that this corrective phase will most likely turn into a major phase of an opposite trend.
Time
The major phases of two adjucent cycles tend to show harmony both in amplitude and in time. AB=CD , Three Drives Pattern based on this phenomena. But corrective phases also tend to be equal in price and time. Reciprocal AB=CD or 5-0 Patterns exploit this phenomena. In the majority of cases major phases are steeper than corrective phases. This means that less bars required for a major phase to travel its amplitude than for a corrective phase to recover even the part of it.
Komen:
Here's the entry technique that can be executed to enter short:
Komen:
a price started to decline earlier and the bat didn't complete here's another pullback trading opportunity. Wait for price to enter the sell zone to have at leas 1-to-1 risk to reward. Essentially the higher you execute your trades the greater is your profit and the less is your risk.
Komen:
perfect prediction pinpointed the top:)
Idea Berkaitan
hi, very good work!
what do you think about the 5 - waves - cycle down?
if I see right, then all waves (1-5) could be finished next week, which would mean april will be positive.
what do you think about the 5 - waves - cycle down?
if I see right, then all waves (1-5) could be finished next week, which would mean april will be positive.
Balas
@Acel, H.M Gartley "Profits in the Stock Market", Scott Carney "Harmonic Tariding, Vol1"
Balas
@Alexander_Nikitin, damn that first one is so old! I will start with the second one and maybe read the original sometime. Thanks !
Balas
Really interesting to see new way to see things, I don't understand the 10700 sell zone (short) if it's gonna come down further? You mean that it will go back up to 10700 before reaching a new low? Seems unlikely as of right now, enlighten me! Thank for your analysis.
Balas