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Bill:
Great questions and thanks for the comments.
If you look at the posted chart on the web site, bonds opened this morning
[2/27] at the area that will be key in determining the rest of this move.
The Action/Reaction lines have really done a great job containing
price--think of them as channels if that helps.
That price has gapped higher above the Median or center line of the Andrews
Median lines has implications of its own. First, expect price to fill the
gap back to the Median line [not always fill the gap entirely] within three
periods--so on my chart, roughly 100 minutes. IF this gap stays open past
the close today, that is a powerful show of strength. IF price were not in
that possible pivot area, this show of strength is pretty clear: Once price
breaches the Median line, there's roughly an 80 percent likelihood that it
will make it to the outside median line now.
Also, take a peek at what I marked as pivot [6]. As you know, the markets
aren't "pristine," meaning that turns don't always happen as neat and clear
as we'd like, especially in these market conditions. So price can overshoot
by a few ticks and I would say you'd expect it to overshoot about as much
as it did on pivot 6 before you'd negate the possibility of a turn.
Simply put: A close outside the Action/Reactions lines would be another
bullish signal, and a close back within those lines would lead you to
believe we are still in a wide range, as indicated by the lines on the chart.
Thanks for the question. I hope the answers are interesting. I've attached
the chart below.
Tim Morge
www.medianline.com
At 01:07 PM 2/27/01 +0000, you wrote:
>Tim, I much enjoyed looking at your site and I thought it might be
>interesting to see how things worked out on the bonds. Attached is the
>way things are looking twenty minutes before opening. Obviously, we
>cannot predict exactly where it is going to open, but let us say it is
>somewhere in the vicinity of the high. Under my particular rules, that
>would indicate prices going higher with what I call a Gap to
>Follow. What would it tell you in relation to the pitchfork? What
>would you expect prices to do in relation to the median lines?
>
>If you could post a comment, it would be very interesting to see how
>things develop. I can see exactly how one arrives at producing the lines
>(although this was purely computer generated!) but it is the reading of
>the picture which is the important bit, of course.
>
>Anyway, congratulations on all your research and thinking behind is
>phenomenon. Could be some very interesting lessons to learn here, for
>everyone.
>
>Best of trading
>
>Bill Eykyn
>PS Apologies for the typo on chart. Seen but not changed!
>
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