gassah

The previous post should have stated 33/67% (not 66%). From the CBOT manual: In order to understand how the distribution process relates to market activity, it's important to see the connection between the Market Profile concept and volume. The volume of everything typically falls one, two or three standard deviations from the mean. We're going to relate trading data to this organization. For our purposes, however, we're just going to relate the high volume first standard deviation and the low volume third standard deviation to market activity. The first standard deviation correlates to the value area. This is a high volume area. It shows price acceptance confirmed by use: a fair price area. The third standard deviation correlates to a price excess. This is a low volume area. It shows price rejection: an unfair price area. These low volume price areas are key reference points because they can contain the range. When the market reaches these potential parameters, it can only do one of two things: trade through or reverse direction. nic

The Market Analyst software isn't required for the standard deviation calculations. Barros states that the 12.5/87.5% fibonaccis make for a good approximation of 3rd STD, as does the 33/66% for value (1st STD). nic

Sorry, I'm only setup in Market Analyst with Forex for intraday data. nic

They are just one way to delineate the extremes of a range, to take profits or to initiate a position. nic

Thanks. I'm lovin' MP. I haven't been this turned on by TA since you introduced me to Wyckoff eight years ago! nic

The attached shows the daily composites for the two ranges using Market Analyst. The blue zones are value and the green and red are the 2nd and 3rd standard deviations, respectively. Barros likes to look at the red zones as the extremes of the ranges and it's interesting how they overlap for the top and lower ranges. If price gets turned down from the extreme of the lower range then it might represent a good shorting opportunity. If it can return above the pink line with conviction, back into the upper range, then the old highs as a target seem probable, imo. nic

I found Tom Alexander's new book "Practical Trading Applications of Market Profile" excellent. http://alexandertrading.com/home/ nic

http://www.market-analyst.com/ has a Market Profile for daily and weekly charts. I'm not sure if it does intraday. Ray Barros uses them. Expensive at $1000 for the charting program and $280 for the Profile. The attached is a daily SPY. nic

Hey PP, Here's SPY's 15m touching the volume POC (yellow line) three days straight. nic

Hi PP, I'm curious as to why you have "accumulation" as it's coming down hard off the top of a daily range? Thanks. nic

Hi, Wyckoff and Dorsey construct and interpret PnF charts very differently. SMI has also modified and built upon how to use the charts. The original Wyckoff course covers the topic and the SMI course has an incredible amount of material, including audio tapes (now mp3) made in the 60's and 70's by Bob Evans who ran SMI during that time. You don't need to worry about knowing how to calculate the charts unless you end up doing them by hand. Stockcharts.com, with special settings, does the charts correctly. Here are my settings: http://tinyurl.com/2qn3fn Bull's-Eye Broker is a program that does them too and has a little explanation on their site. http://www.archeranalysis.com TradeGuider's next release is supposed to do them also. I'll PM you. nic

Hi dandxg, I also use Wyckoff PnF. I use it to find stocks that have enough potential and to estimate price targets for exits. nic

The Vista version of the Boot Camp doesn't seem to have limitations either. nic

Williams took the Wyckoff-SMI course and I think it was 1964. SMI showed me the check he paid with. Quite nostalgic. nic

The point of my posts was to open one's mind to the possibility that demand might be entering the market as it often can with that type of bar, and not be fixated on one direction. In addition, markets can continue down even while demand is trying to come in which we can often see in retrospect. I took Wyckoff's quotes out of context. After yesterday's bar he would still have been in position 3, a bearish position. In the course he only suggested preparing to cancel the bearish position, and only definitively canceling it if there were more positive developments. Even if there were demand coming in on that bar it wasn't a place to go long when looking at the position within the channel, if one adheres to Wyckoff's methodology. nic

It's in the Glossary of Terms under Bag Holding. Mine is page 142. nic

http://wyckoffstockmarketinstitute.com/ nic

On top of the above lettering system (SPY 15m) is 1st-tradingtools.com's Volume at Price Histogram. I haven't been happy with their traditional based letter profile and prefer the free one I attached earlier. The letters and magenta line (value) are from the above free .eld and the histogram is from 1st-tradingtools. The red lines are value and the yellow is the Volume-at-Price POC. It also comes with a touches-at-price POC. nic

Hi, It's from Wyckoff's original course that is also part of SMI's Unit 2. nic

QQQQ did close lower and is at multi-week lows so it fits the above descriptions more neatly. nic

This is what Wyckoff stated for a similar bar: "...although the price makes a new low and the closing is on the bottom, the downward thrust has shortened with volume still comparatively heavy, indicating that on this and the previous day somebody is holding the bag for the sellers -- a large demand is overcoming large supply-- the buying is of better quality than the selling. If the above reasoning is incorrect, that is, if it should later turn out that the increasing volume... should have been interpreted to mean that liquidation is breaking out, we probably will be warned of this by the stock’s inability to rally convincingly from the critical supporting level... We are not likely to be long in doubt. Should it rally poorly...or should the price continue to decline on increasing volume, we must let our 3 Position stand (a bearish position). But if it quiets down and tends to hold, we must conclude that this means the break to a new low is failing to follow through." nic

Williams prefers a down close for today's bar but Wyckoff didn't care. "As they are buying (or absorbing) all of the stock on offer, this prevents substantial down-moves during the day's trading (despite all the frantic selling) and finishes up with a narrow spread on a down-day. If the professional money had not been bullish, they would refuse to buy stocks on offer, which means that the spread would then be wide and down for the day." MTM nic

Today's narrowing spread on higher volume probably represents demand overcoming supply. I think Wyckoff and Williams called it bagholding. With the low to the left and the oversold position relative to the channel it's a logical place for demand to enter. nic

Here's an MP file from the TS forum that doesn't plot the POC. nic TPO Pro5.0b.ELd

Another excellent Wyckoff-Williams type of bar-by-bar volume analysis is provided by the Hutson book, http://www.amazon.com/Charting-Stock-Market-Wyckoff-Method/dp/0938773062/ref=pd_bbs_sr_2?ie=UTF8&s=books&qid=1198724382&sr=8-2 David Weis has a stunning chapter. nic