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gassah
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Try this: The business of trading in stocks - Google eBookstore
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I think I've read everything Wyckoff has put out. Of the Wyckoff material I only read the original course annually.
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Apparently Wyckoff came up with what is SMI's Force and Momentum indicators but called them by something else (I can't remember what). Bob Evans added the Technometer and OP Index. I don't see a similarity with the OP and OBV. The OP, and all the other SMI indicators, break the intraday chart into 5m swings and tally the up and down swing volumes. Using EOD volume, as OBV does, isn't similar, IMO.
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The one bar on the 9th isn't enough to say there is significant distribution. He states that the preceding days are more likely a lessening of demand at the top of a rally, which doesn't concern him too much. Because he isn't looking to only trade the swings. He wants to hold through reactions trying to capture the larger moves, and unless there are signs of significant distribution he will hold.
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Wyckoff is talking in probabilities. He isn't concluding at the moment of the SC bar that it is, in fact, a SC. As he states, he needs more evidence. Given the background decline and the heavy volume and bar he believes that odds favor the probability of a climax and suggests buying only if you see the demand intraday. If selling re-commences then the buying was only temporary, but you can't know this in advance. Following an extensive decline it's far more likely that sellers are exhausted. In general, buyers are exhausted after a prolonged advance. The context of the bars has to be taken into consideration.
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Hi Mikew, I'll have more to say later but I'll post this chart of the DJIA from the same period to provide a broader perspective of that selling climax. gassah WOC SC-AR-ST.pdf
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To Gassah,
There is a problem with the link to the P and F page that I receive as an update notice by email. I have not been able to access any P and F updates for over 1 week. If I access the P and F through the homepage route, I get the P and F forum, but none of the updates for at least the last week. Kindly, fix this problem or let me know if something else is wrong or if I am doing something wrong let me know.
Much Appreciated,
George
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I'll try again. I asked Ray for assistance because sideways vs. corrective was throwing me a loop. Here's his response: A sideways correction is one form of a complex correction. Your question raises two issues: 1) when do we relabel a new extreme as being part of sideways structure? A: when the market retraces at least 78.6% of the boundaries of congestion. 2) when the market creates a new extreme (in your case when the market goes above (A) and returns to congestion, at what point do we say the BC leg is corrective and not impulsive? A: when the market accepts beyond the Primary Zone. Note that the two conditions are not mutually exclusive - e.g. you can accept below the Primary Sell Zone (D) without reaching the 78.6% retracement. This would make the structure a Running Correction rather than an extended SW structure. Hope this helps ray
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I replied last week but I don't see the response now. Did I not? I stopped drinking a few weeks ago.
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I’m using the Nasdaq 8/09 as an example. Take the 38.2, 50, 61.8% fibos between AB and BC. Look for where there’s a confluence of zones. In this case I erased the top 38.2 and 50%. Take the lower 61.8% and change it to 67%. After you buy a bull bar off these levels place the stop below the 67%. The RC can be thought of as a sideways correction that is too strong to make it closer to B and should lead to a strong impulse move. It’s stronger than a single line, zig-zag or sideways correction, and not as strong as an irregular correction or R0.
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The webinar is over a year old now and about 20 sessions. He might offer a discount. I'd ask his assistant Kwok @ oikwok@gmail.com. Rob
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I need to make a correction. CD does not need to come down to 78.6% of AB in order to label it a sideways market and to make changes to the ME. All it has to do is have a one bar acceptance below the PSZ of AB (like an upthrust). If it turns up to challenge C then I'd change the boundaries from AB to BC. It doesn't matter how it goes up. What I said about changing the boundaries if it continues lower still applies. If it comes down to 78.6% of BC but stays above the PSZ of AB then you just have a continuation of the uptrend. The BC measurement does come into play with running corrections and R0 patterns. I don't think running corrections are in the book. I can try to explain them from Ray's webinar if you are interested.
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I'll address the first chart with different labeling. If it comes down to D at 78.6% AB and turns up and you want to see how price behaves around the PSZ and upper ME then I would change the boundaries to BC. If, instead, it continues down toward B then I wouldn't change it yet because you want to use the old PBZ and lower ME. If it then comes back up above the PBZ then I would change it to BC at that point.
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To Gassah,
I would like to purchase the indicators or add-on indicators or the code for Tradestation that will plot waves across bar charts and that will plot the total volume for each up wave and each down wave. Like the indicators on the chart posted by "Tape Reader" on Page 4 of your P & F thread. You seem to know the "Wyckoff Method" and "Tradestation". I have been doing these things manually and I have been trying to find these types of indicators, but haven't found exactly what I'm looking for. I've tried the ZZ Fib indicator from TS and paid a programmer to total volume for me, but the volume totals in the ZZ Fib are not accurate. If you know where I could purchase these indicators or if you know a programming business that does this type of programming, I would be very grateful to you and again I would like to pay you something for you help, if it would be alright with you.
Much Appreciated,
George Rally
