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> What is the three-line (blue) indicator on your chart? A Raff
> Channel?
Mere Horizontal Trend Channels, based on LRC. The clear trading range plus its Top
breakout entering new (record) territory, requires to draw(put) another Channel on top
of the former, now lower Channel. Constructing it this way will also provide for the Median
line in the middle, eg former Resitance and supposebly now "strong" Support.
All, including the long term UpTrend, are Linnear Regression Channels(LRC). Using the
Linear Median in the middle and the bouncing-off Linear Extremes on the outside, eg
the Point of Return (or Turn Arounds) where the Price faced its barriers and here than
made its ultimate <but temporarily> Highs and Lows, eg the ultimate (Extreme) directional
reversal points, strong support or resitance barriers setup by humans where Price clearly
returns (directional changes) to its previous levels and where these barriers now function
as the in time made Linear Regression Extremes, eg lines drawn along or bordering
these reversal points creates the Linnear Regression Channel, eg the Upper Channel, the
splitting Median line in the middle and the Lower Channel, and in which the Channels
will construct themselves, each having the same (parallel) width.
Unfortunatly, in MetaStock you still have to manualy draw the LRC channels unlike the
button-ised and by you suggested Raff Channel, which is only a very doubtfull LRC spin-off
(on charts they are dynamic and as such give incorrect directions, eg channels float (drift)
on the charts and are constructed without ever using the Extremes(highs and lows).
Also, in Normal mode, manualy drawing channels is possible (but also very huge labour+
time consuming) and in Semi-Log logarithmic-mode(relational relative) drawing the LRC's
or any channel for that matter, is near enough impossible.
A workaround is then to manualy draw the Extreme bottoms' line first(using Extreme Lows),
eg also since we are currently in a longer term UpTrend and have outbroken a previous
resistance, then to manualy draw a parallel Extreme top line, parallel in the same direction
over the Highs and for size (and from left to right) to construct this rising channel to be exact
the same width (top to bottom), by using a ruler placed on or in front of the screen.
Contrairy, when we are in a downtrend or broke down support, draw the Extreme tops' line
first, but now using the Extreme Highs and paralel draw the opposite bottom line.
> One difference I see is that you draw your channel back farther than
> mine, resulting in a steeper channel.
There are more differences(see above). Tho, there is nothing wrong with the way you have
contructed an inner support & resistance channel, eg it is a longer term chart after all.
> Just goes to show that TA is art, not science. I can't tell, yet,
> which channel is better.
TA itselves is science, not art. TA stems from scientificaly proven and worked out theories.
To find out a future (price) development is an art, i.e. for yourself to imagining this and help
in this can be provided for when falling back on the scientifically proven or worked out theories.
Then to put your order in, is also an art (i.e. picking up the phone, giving the order etc. etc.)
and don't necessarally require any scientifical statistics to be prooven right or statistical
measurements to be succesfull, eg it is a human act.
Have attached another Short Term daily view as to why the 11896 will be veasable within
the next 6 months. Note that the in time made LRC's are all consequtively bowing (down)
to the right, eg progressing as a parabole, indicating that a very long term Top is in progress.
The RSI is already confirming the outbreak and the CMO is about to (and the notes on the
left are now irrelivant).
Regards,
Ton Maas
ms-irb@xxxxxx
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