This is how Action/Reaction roughly works:
1) take the center of a major swing
2) mesure back and
3) project it forward.
Observe how price is acting/reaction at the R-Lines.
This is the same principle like: "If you push to a wall, the wall is pushing back."
On my new Blog-Post for registered FreeFTG members, I'm going into details about this technique that...
Just look, study and begin to see.
If you know the rules about Action/Reaction, about the Forks, you have a better sense what potentially could happen when price reaches the centerline, or breaks out of the U-MLH and comes back ("overshoot" - "back to centerline" in pink).
Follow each bar, from left to right...slowly...think about what's going on bevor going to...
Here we have the really important parts of the SPY.
The touchdown (twice) at the Big CL (fat frey) is a great indication that we are going potentially higher.
The black resistance where we are now, is also a CL from High-Low extremes.
The orange sliding is the Shift in frequency and can be used as a confirmation too, for either long or short.
The Trend Barrier...
Even it looks very magical how the lines catch price - there is and never will be any magic in trading.
But the lines have their reasons, time and place!
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Not just because it ran up like hell, but because
it has physically reached the extreme at the
U-MLH (black).
Don't get me wrong!
Markets can run to 10ths of extremese. But in
most of the time we deal with the standards.
What else do we have:
- resistance zone
- Action/Reaction reached
- reversal Bar
...and all in all: Confluence, created by the facts.
Let's...
What i see in the RUT is a potential resistance.
Alltough it could be that price is advancing to the upper CL (green), my
opinion (which i should not have) is that we see the end of this up move.
The blue Fork's CL got broken up, then broken down again and now we
are in the test/retest mode of it, actually exactly at the blue CL again.
Price fluctuate. And...
After the BRK of the small A/R set's U-MLH, price rocket higher, up to the EP
where the blue and green CL's meet.
It's very possible to me, we see price above 47.
If so, price then is above the blue CL again - the biggy would be re- broken.
Facts:
- BRK the slanted coil (orange...to bring poublic short and holding the bag open?)
- back to start (bag full....
P5 is reached...at least it looks like.
The tiny lower close is very suspicious...
At least price broke out of the "creative" downsloping Fork and reached the CL.
From here price either zooms through the CL, or comes down to the L-MLH.
Chance for the walk to the south are 80% - same as going to the CL!
And why NOW?...well, as i said, price reached the CL. So it's...
I see 5 major possiblities:
1. Price turns at this (red) centerline where it is now, and go's for a test/retest to the upper CL (blue)
2. Price stops a the mesured move line, the one in the green zone
3. The lower (grenn) A/R line holds for a massive move to the upside. If this holds, we would have a huge hagopian which means, price is going further back then...
What i kow about my one stats with the
Forks, the Action/Reaction is, that price
REALLY reaches the Centerline over
80% of time.
My rules to keep me grounded are simple, but powerful:
- know what you can't know
- use what you know
- use your tools - don't let them use you!
- don't overtrade
- lean on your one stats
- do the work you have to do
- never trade...
This Company was mentioned in my options group
and it looked very interesting to me. So i got my
hands on it and found a nice potential trade.
The fast run down seems to have a end.
Frequency catched up bevor, then shifted and now
we find price at the WL (Warning Line), where the
shifted Frequency meets Action/Reaction.
Potential for a long with a nice stopp...
Everytime i see such coils, i think of somebody who has a "job" to do...
The projected upside explosion would meet exactly the BRK point.
I only think about long when price is closing above the Centerline.
P!
The 2011 pattern looks very similar to the one we have now.
Even the priceaction from the Bars look nearly the same to me.
Facts for Long
- similar pattern as in 2011
- support at the L-MLH is pointing North.
- no real LT low is broken!
- so far a wide distance from the open to the actual (potential) close
Facts for Short
- the frequency shift (red slidings)...
Alltough the ST Trend is up, i see what i see: Multiple rejections from the orange/red zones.
This kind of Trade is exactly what i like when i say, look for a good stop.
Following the law of Action/Reaction, the target is the Center Line.
Hint: A turn seldom comes on a dime. Price needs to eat up time (going sideways) to create space, to go in the other direction.
