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Lesson 3 Energized Lines

Posted: Wed Oct 08, 2008 9:40 am
by Trader ???
In the exercises at the end of lesson 3, starting on screen 6 about points A-D on a monthly, weekly and daily chart of soybeans, in the correct answer for point A (screen 8) you state that "the weekly 1-1 high is 'taken' or 'energized' by the daily 6/1 down..." I'm not sure what you mean be this.

This seems correct to me:
Point A is the same point wherever it appear; it is identical and has the same "reality" in all three charts. It only appears different, configured with different shaped bars, because it is being viewed from different time perspectives. Any evidence of energy which develops at point A, and manifests as support or resistance, would first be seen on the lowest (daily) timeframe. However, similar to the argument above, it's still the same energy, the same "reality," in whichever timeframe you see evidence of it (as support or resistance). Both point A and any energy evident there are unitary concepts, existing as single realities, not three different realities (daily, weekly and monthly). They don't change depending on how they are being viewed. It is only our perspective of them that changes when we look at them in different timeframe charts.

If the above it correct (a big "if"), then is this what you mean by daily resistance (6/1 down) "energizing" weekly resistance (1-1 high), since according to my argument they are not different entities? That the energy begins to build in intensity until it is evident as resistance (6/1 down) on the daily (or lowest timeframe) chart. If it intensifies sufficiently, this energy will then become evident on the next higher timeframe--same energy, just obvious now on a higher timeframe as weekly resistance (1-1 high). If the energy really continues to intensify (that is, "energize"), it will even become evident as resistance on the highest timeframe. Correct or not?

I find the conceptual material most challenging. But it's all very interesting. I'm enjoying myself immensely.
M.M.

Re: Lesson 3 Energized Lines

Posted: Wed Oct 08, 2008 9:41 am
by pldot
Yes, you're getting it.

We sometimes (and sometimes more often than sometimes) get all tangled up in terminology and metaphor.

Maybe here is a simpler statement: we can identify projected resistance on a weekly chart (e.g. a 5-2 down) . If that resistance is valid then we are going to see price react to that level when we get there. That reaction will manifest itself first on the lowest timeframe, then on the next lowest, etc etc, and can indeed possibly extend up to the yearly or higher price bar. If it does extend higher, then we will most likely see corresponding HTP resistance flags at or near this level as well.

You will see extended discussions of what things look like when these levels hold or when convresely when they break in Lessons 8 and 9 .

We sometimes speak of this resistance as "energy" as indeed it is... the latent willingness of sellers at that level to take action, the latent emotions of market participants that will be triggered at that price level, etc.