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Now as for this chart.

 

That first little line at the very beginning of the day could be considered a demand line since there's no real trend in place yet.

 

However, price quickly departs from this area, and focusing on any extension of that first 5 or 6m line would be of no help whatsoever in either entering or managing a trade. The only line that's going to help you trade price action is one which closely follows the price action.

 

Therefore, the first line is drawn, as steep as it may seem. When it's broken (and it will be broken), that tells you that momentum has changed. You can either exit one contract , exit all, or you can wait to see what happens.

 

Here price makes only a ret, then makes a new high, at which point you can fan out your original line or draw a new one from that point. Your choice. Either will also be broken. When it is broken, again you have a number of choices, but it's important to note that price finds S at the last swing low. This is good.

 

So price makes a new high and the line is fanned out again. Or you can start a new one to track just this segment. Doesn't matter. What does matter is that when price breaks whatever line again, it again finds S at the last swing low. It then stalls at the old high and makes a new one, enabling you to fan your line again.

 

This time, however, the new high fails to hold, and that now becomes R. This is important stuff to know whether you're in a long trade or looking for a short trade. But much of it will likely escape your attention if all you have is that first line drawn during the first few minutes, or any lines that do not closely track the progress of price.

 

Your explanation makes sense. Now I have to get used to keeping better demand lines. I didn't realize you'd have to make higher highs also (although I know I read that many times). Thanks for the post.

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Your explanation makes sense. Now I have to get used to keeping better demand lines. I didn't realize you'd have to make higher highs also (although I know I read that many times). Thanks for the post.

 

Keep in mind, tho, that there's nothing special about these lines. Their primary function is to tell you something about momentum. You may find pretty quickly that you don't need them at all, any more than you need them to tell you whether price is going up or down.

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I pointed this out in chat today and am not sure how much significance it has but NQ is currently exactly at the midpoint of the swing high started from February 10, 2009 (1284.25) to the swing low on March 9, 2009 (1038.50), which is approximately 1161.

 

Here's what Wyckoff had to say about it: "...when a stock declines 10 points, a normal rally would be approximately one-half, or about 5 points. A smaller rally would indicate technical weakness and a rally greater than one-half would indicate technical strength."

 

The chart has been adjusted for the June contract.

 

5aa70eb8ba165_NQ06-093_13_2009(60Min).thumb.png.dc68561e7e5863bf98734fbb25eb35c7.png

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So what you would be looking for tomorrow is the 75-80 area. If it breaks we can assume some strength and possibly head back above 1200. Don't know if buyers are strong enough to punch that through in one shot though. Personally, I'm looking at this area is a R, maybe for a small short. 67.75 was the high for yesterday and it looks like overnight is having trouble getting higher than 65. We'll see later in the AM I suppose.

 

 

NOTE: I guess you have to subtract 2-3 from the values above since we want to focus on the June contract now.

Edited by wjrusnak
June Contract?!

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The chart has been adjusted for the June contract.

 

Fortunately there's only a small discrepancy between the NQ March & June contract (max 1.50 pts).

 

This is what I'm looking for today based on your chart. Lines are roughly drawn, because this is a H1 timeframe, and I would zoom in to have a better look at the important price levels.

nqlines.thumb.JPG.49e0a64c1275004e6aaceaf2196bc8a7.JPG

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May also be worth noting that while volume was the same or slightly higher on the Naz than on Tuesday, the volume of advancers was not.

 

Edit: And don't overlook the midpoint of the high to low the first three weeks of November: 1200.

Edited by DbPhoenix

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[20:39:28] firewalker: ok Friday night, who takes a bet at the closing price

[20:39:37] cowseathay: 1161

[20:39:41] firewalker: 1169

 

36 minutes later the NQ closed at... 1168.75 :cool:

 

A little bit of magic on Friday the 13th and TOG's buying the drinks+dinner :)

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I pointed this out in chat today and am not sure how much significance it has but NQ is currently exactly at the midpoint of the swing high started from February 10, 2009 (1284.25) to the swing low on March 9, 2009 (1038.50), which is approximately 1161.

 

 

1161 turned out to be +/- today's midpoint, and the lines I added to your chart identified today's high and low boundaries (give or take 2 points). Good work :)

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Hey guys. Db, I got your email, and there's no need to worry about anything. Thanks for the thought, and apologies for not saying anything here. I've been extremely busy as of late, and needed to take a break from chat. I'll try to drop into chat on Monday and say hi. My schedule should be freeing up soon, so you'll see more of me :). Hope all of you are doing well and have been trading well in the volatility. If anyone needs anything from me, PM's probably the best option.

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Hope all of you are doing well and have been trading well in the volatility.

 

 

To this atto, the only way I can explain how I have been doing is this....

 

 

 

[ame=http://www.youtube.com/watch?v=HuGIgf-ICHM]YouTube - The Office - I declare bankruptcy! Michael Scott[/ame]

 

Glad to see you back

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Hey guys. Db, I got your email, and there's no need to worry about anything. Thanks for the thought, and apologies for not saying anything here. I've been extremely busy as of late, and needed to take a break from chat. I'll try to drop into chat on Monday and say hi. My schedule should be freeing up soon, so you'll see more of me :). Hope all of you are doing well and have been trading well in the volatility. If anyone needs anything from me, PM's probably the best option.

 

Glad to hear that. Oh yeah, we need something from you, we want to see some of that live mini hinge trading stuff ;)

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To add, I suppose, the DOW seems to have broken above the top of your box, which seems to be strength, but I have this channel drawn and it is right at the edge of the top trend line. This should make 7500 a fairly interesting level tomorrow.

 

dowmarch2009.jpg

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To add, I suppose, the DOW seems to have broken above the top of your box, which seems to be strength, but I have this channel drawn and it is right at the edge of the top trend line. This should make 7500 a fairly interesting level tomorrow.

 

Yes, only one of major indices still below the November lows.

And 800 could provide serious issues on the ES.

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Don't cringe if this is horrible, but this is what I have from today's session for tomorrow. Keeping in mind 60, 30, and 05 due to the past few days and also 45 being that midpint from the 24th and the reactions after.

 

march25levelsedit.jpg

Edited by wjrusnak
Fixed chart as DB requested.

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Thanks for the chart, but in future could you include the bottom line with the dates (or hours, if it's only one or two days)?

 

Also, I'm sure you noticed that the top of your first box provided the midpoint for the second. Maybe a coincidence, maybe not.

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Incidentally, wj, and anyone else who uses this "box" approach, there is no one right way, particularly with regard to the tails, and one person's charts needn't exactly match another's. The point is to locate the consolidations which, since these are CVB charts, by definition will also locate the volume. The boundaries aren't going to be much different, much less the midpoints, and one is always free to locate potential S/R within a box, such as when a series of swing points line up inside a broader consolidation.

 

All of which is to say that no one who is interested in this should avoid posting a chart just because it doesn't look like somebody else's. It's just a matter of locating those areas where price stops advancing or declining and begins retracing its steps, back and forth, treading water, running in place.

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