Lesson 26 Screen 43

[Trader Question]

On the last bar reasons are given for going short which I can see. However I would have been inclined to anticipate incorectly. There have been several parts of examples that I have puzzled over but this one I'm not clear about. I think there is a more general question lurking behind this (what happens when some geometery says one thing but other geometry says another). I expect experience and research will help alot.

Background
Days low is an exaust around the daily dotted line this shows support is strong.

I can see the 60 min close in weekly and daily resistance - presumed strong unless proven week.

I would anticipate continued action until enough energy for the daily to push out of congestion ultimately causing weekly congestion exit. Question is of course is which direction and more important when. Prolonged action is possible due to the confluence of nearbies and dotted lines and block levels in various time periods.

I include the above to indicate my background understanding (or lack of!).


To cut to the chase the hourly is in a C Wave up (granted closing right at nearby resistance however this moves up tommorow). Support has moved up through the envleope to under the envelope top. The live dot is now pushing the price. In fact the hourly PLDot has pushed the price through the weekly PLDot. As of the close nearby daily support is going to move up to the PLDot. These are the conditions under which a break of daily reistance/block could occur. I would have been inclined to hold long target tomorrows nearby resistance at envelope top/block level.

Of course monitoring the hourly the next day would have shown a no pattern. I just wondered if I had made some fundemental error in analysis. Obviously some situations are more clear cut than others. Lessons on congestion action/exit will be my first revisit I think. Good for understanding to work through the odd contrary scenario.

N.A.

[pldot]

A long starting at the last hour of the day in question would be a dicey move; the hourly was exhausting into a point of projected HTP resistance; the daily (HTP) envelope was trending down; the weekly was itself in resistance at that point. Nevertheless, as you mention, had you gone long the hourly would have quickly told you that you were wrong and you would take corrective action.


If any change in your analysis is warranted, you might consider placing more emphasis on the HTP and 2HTP context, and envelope position and direction, and watch those exhausts into areas of projected, anticipated su/resist.

[Trader Question]

As you succinctly identify emphasis is everything. More often than not things seem plain. Easy enough to stand aside if in doubt. My confidence in P&L and my analysis is growing all the time. I am playing with some ideas for an 'analysis template' just so as I dont overlook stuff in the early days. Something like a pre-flight check list. I think over time that will help deciding where emphasis should be. I figure flow may well be important here too (something else to look forward to).

N.A.

[pldot]

Yes, writing down check-lists, trade plans, and so forth can be very helpful... there is a *lot* of material here and it will take time to assimilate it and assemble it in a way that is optimally useful for your particular style.