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I have studied more times than I care to rmember, the 12 months up to the DJIA top on 3 September 1929, and down through the initial crash in 1929, and then down to the ultimate bottom after the Great depression period ended for the stock market at least in June 1932. At the latter date the DJIA was averaging only 10% of its value back on 3 September 1929. Imagine that a 90% Stock Market Average Reversal?
That paid scorn on any Dow Theory hypothesis that a major reversal was a 20% decline. I mentioned in an earlier post Hamilton's Big Mistake in 1926, according to Gartley, which Gann subsequently suggested was a pullback in a Bull market. That 1926 pullback on the DJIA only declined 17% before the average took off again. Normally a reversal under DOW Theory is a change of 20% from a peak or trough but the percentages are really arbitrary space measurements, until proven wrong.
Another reason why I believe Hamilton could not read the charts was that whilst he alerted the WSJ reading public that he had concerns about decline in the DJIA after the 3 September 1929 top, it was only, by my calculations 4 days before the bottom of the initial crash in 1929, that he suggested the US Stock Market was in a major reversal. That was after the Vice-President of the US Stock exchange tried to intervene in the market to buy stocks, and keep prices up, on behalf of major bankers syndicating their capital. It was too late to protect many investors. Hamilton, or the bankers were ignoring a major tenet of Dow Theory (that man alone, cannot manipulate the major Stock Market trend).
Looking at many different perspectives, using a computer and adapting various Trading masters approaches, to identify changes in supply & demand, or developing new ways to measure the forces of supply & demand, I have only found one approach that identifies what I call "hidden distribution" on the DJIA in the period from June 1929 and prior to the 3 September 1929, top. It predicts well before the top and the subsequent initial crash that the Smart Money were unloading, but covering up their tracks before the top, and hence many traders, the public, and even many famous Trading Masters could not pick up, what was going on in 1929.
cmacdon
Can you help answer these questions from other members on NexusFi?
Friday's measured move style upswing shows that the 1:1 type swing geometry dominates the outcome versus the calculated Square of 9 spoke levels. The spoke levels produce reversal bars on the 4 min chart but these are themselves reversed so would be the best long entry points for getting in on the larger move. Downward wicks at 1/2 prior bar on the range chart to the left are an easy way to arrange a trailing entry limit order. This addresses the bar identification problem (without really solving it analytically). The 60 min chart shows the ML capping the upswing. This study has a lot of benefit vs very little effort to execute.
I thought the topic was a reversal bar signaling a pullback or trend reversal.
With a breakout to a 1:1 and Median line target in play the reversal bar on
a Gann spoke only gives a pullback instead of a reversal. With no big move
in play a small reversal was what we got.
There is no way to really know other than with experience. All that I can say is I find no value in candles and that is after watching charts for more than 10 years. Others might disagree so I wish them all the best. Understand that much trading has been automated. Machines most often need reference points and targets. Understanding where these are helps you decide what is a pull back or a turning point. Because we are making new lows or highs does not infer a turning point. If it is bouncing of a support or resistance level then that will have more meaning. Most markets that I have watched level shift to some degree. If you are trading 10 min charts, look for hook turns on the 2's. They can be a good indication of something is happening. They do not happen all the time but when they do, you should pay attention. Work out where your levels are and that will put things into context. I do not trade what you trade but pulled up a chart and it more or less looks the same as what I am doing now. Good luck!
I realize that it is a 1597 Tick chart . .. I apologize for not being more clear . . there was a 1597 chart posted of 6E by another member, and I started to try to mark on it, and realized that it would be very messy.
My vague point, to me at least, is that one timeframe's pullback is another timeframe's reversal, based on price levels alone. My chart and reply was more of just an exercise for my own benefit, and if it made any sense top anyone else, that would be good . . but I do apologize again for not having better communicated.
As I tried to say, I have found that I have better success finding fib extensions after a reversal to find A) Targets and/or B) places to try countertrend trades. Here is the same chart, a little later in time than shown in my previous example, and on a 4181 Tick chart.
I based the X points to draw the fib extensions based on something to do with broken stairsteps. I do not take trades from the 4181, but mainly to find levels. I usually try to use the 610 tick to take trades on CL,
That, again, is probably as clear as mud. I am just attempting to join in on the conversation =)
