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Harold
Very interesting...will have to read very carefully just to digest
this Wycoff method....as I know nothing about it...although have
heard it mentioned before...but few initial observations on P & F
Horizontal count = intermediate price objective
Vertical count = ultimate or final price - rather than intermediate
projection.
Horizontal count depends on the base/top formation. For price
objective one must locate the lines with 'most recordings (lines
with least no unoccupied) where count may be taken...
So if I am right interpreting the red box on your P & F chart then
that is your chosen location for horizontal count??....Could you
have taken the horizontal count objective at 36 perhaps...then all
the boxes are occupied...???...a question...
In P & F you can I think just scroll thru all the charts scanning
for a pattern..if found then seek confirmation etc..with RSI MACD
and many others...
In P & F charts volume plays no part at all....!!!
Also the trenlines are always at 45 degrees (although there are
exceptions) must be plotted at precise locations...and these are
your guidelines..
regards
anil
--- In Metastockusers@xxxx, "hcour" <hcourtney@xxxx> wrote:
> Auto Group:
>
>
http://photos.yahoo.com/bc/hcour/vwp?.dir=/&.dnm=Auto+Manufacturing.G
I
> F&.src=ph&.view=t&.hires=t
>
> GM Daily:
>
>
http://photos.yahoo.com/bc/hcour/vwp?.dir=/&.dnm=GM+Daily.GIF&.src=ph
&
> .view=t&.hires=t
>
> GM PnF:
>
>
http://photos.yahoo.com/bc/hcour/vwp?.dir=/&.dnm=GM+PnF.GIF&.src=ph&;.
v
> iew=t&.hires=t
>
>
> Much interest has been expressed about PnF charts here lately. I'm
> fairly new to PnF. I use the Wyckoff method which is a little
> different than other methods. For instance, Wyckoff uses a
horizontal
> count, you can have X's and O's in the same column, and a column
must
> have at least 2 entries. It is also used in conjunction w/other
> Wyckoff principles, such as the Selling/Buying Climax, the
Secondary
> Test, Upthrusts and Shakeouts and so on. I'll explain some of
these
> concepts using a current trade.
>
> Wyckoff is a bottom/top feeder. Using the scan I talked about in
an
> earlier post which finds groups that are gathering positive upside
> momentum in both price and relative strength, I look for stocks
w/in
> those groups that are exhibiting good Wyckoff price/volume
behavior
> after a possible selling climax. In this instance the Auto - Major
> Manufacturer group was positive. Chart included.
>
> Looking at the GM daily chart. Preceeding a SC is usually
Preliminary
> Support (PS). The PS may later act as important support/resistance
in
> the subsequent range, as it does here. A SC usually occurs on
> excessive volume after a prolonged decline. Note the extremely
high
> down vol in GM on 10/8 & 10/9, the very sharp down move, and the
long
> spreads closing on the lows. A classic possible SC. I
say "possible"
> because a SC must first be confirmed by a test to validate it.
>
> The SC is followed by the Automatic Reaction, AR, which is a sharp
> rally usually lasting a week or two. The SC and AR define the
trading
> range and everything that happen afterwards is measured against
the
> low and high of this range. The AR occurs because supply has been
(at
> least temporarily) exhausted during the SC and the question now
> becomes: Will the pro's step in to support the low or will selling
> continue? Note the very high down vol on 10/16 (circled). This is
> actually a very positive sign because there is no immediate follow-
> thru to the downside. In fact price holds above the 50% level of
the
> range for the following 9 bars. The 50% level is familiar to many
> traders and is a crucial level of any rally/reaction.
>
> On 10/30 & 10/31 we have the Secondary Test. Again, classic
Wyckoff,
> occuring on much lower vol than the SC (the selling is drying up)
and
> support comes in at a much higher level than the SC (price cannot
be
> pushed down further). Note also the narrow spread on 10/30
compared
> to the wider spreads of the SC and the positive close the
following
> day.
>
> Price now recovers back into the top half of the range and
proceeds
> to form a symmetrical triangle, while remaining w/in the top half
of
> the range. Several things happen here: Volatility winds down as
the
> daily spreads and price movement narrow (compare these last
spreads
> to those at the beginning of the range); volume contracts toward
the
> apex of the triangle; the 20d ema (blue line) flattens out and
> becomes support where it was once resistance; price hugs the both
the
> upper triangle trendline and the longer-term down trendline
(purple
> line). And finally, 11/13 is a test of the ST, again positive on
even
> lower vol and a very shallow retracement. Note the close at 50%R
and
> way off the low of the day. This is a Shakeout, which does just
what
> it sounds like: Shakes out traders looking to sell/short at an
> important support/resistance level. Wyckoff refers to this
confluence
> of events as "on the hinge", his version of the triangle pattern,
and
> is often a prelude to a sharp breakout or breakdown. The positive
> price/vol behavior at this point suggests a bo. The indices were
also
> on the hinge at this point, especially the NYSE and S&P 500. So I
> went long. I practice very strict reward/risk and money management
> and this was a good one in those respects.
>
> Now for the price objective (PO) and PnF. One can clearly see the
> SC/AR/ST and final test (last reaction low) on the PnF chart. This
is
> a great advantage, as the
>
>
> positive support and resistance w/in the range are quite obvious
> here. As for the count, there are several ways to go about it. I
> always choose a conservative count. From the 11/13 last reaction
low
> (that test of the test) horizontally across to the SC there is a
> count of 13 or 14 from the line at 33, which is 46 or 47. This is
> where PnF helps me. Looking to the left of any bar chart there is
s/r
> of varying degrees everywhere. The PO gives one a target that is
both
> reasonable and somewhat daring. One can clearly see on the daily
> chart the nearest important resistance at whole number 40-ish, but
> the PnF count goes beyond that. So in this situation I choose the
50%
> level between the two as the most conservative for me. In this
case
> about 43. And if/when I hit my r/r ratio, I become even more
> conservative.
>
> Harold
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