DOW

A quick look at the DOW at 2.19%  ( what is with the .19% ,  :-)  )
Interesting to compare to the XAO

RESOLUTE ?
BULLISH ?
STABLE ?

Such formation can be HARD to DERAIL

BUT Stability eventually leads to INSTABILITY ( remember the Wrecking BALL )

Again The 45 degree lines
Which PROJECT FORWARD
and are OBJECTIVE  ==> defining a probability Distribution

A FORECASTING LINE in INTRINSIC TIME

This is just a quick look

If you did nothing else but
Keep in harmony with those lines ?

How would you be travelling ?





Motorway

XAO

Reading some great stuff  on what makes trends. It is  the slow pushing of the wrecking ball to an extreme (POSITION )
and then the trend starting in the other direction ( when the whole pivot moves with  POSITIVE FEEDBACK BECOMING SELF SUSTAINING )

http://arxiv.org/ftp/arxiv/papers/0907/0907.4290.pdf

Consider HOW , in what ways THIS can MOVE...

If we saw the XAO  GET back to  ~~  4300 , It could set up for a good blast off north.

The congestion NOW is at a juncture and the extension across on three scales Looks like an ominous TOP ( looks can KILL you though ;-) )  With a downward bias ( that clear  rejection of higher prices )

However  Move past the diagonal and then a bullish view will have to take over.  INTRINSIC TIME.

If it moves past that line IT REALLY HAS MOVED ( SOMETHING HAS MOVED )


We have an intersection of lines and VOLUME here  ( Wyckoff SMI ==>  ICE )

If it is a BULL market there often is at least three UPWARD  legs ,4 or 5 even.

How well do the 45 Degree  Lines define the  phases of action ?

The quote below  makes the 2.19% chart important ,

WHY ? Because of  the ( motorway ) fractal information density ratio..

This is one degree Up from a MAX  IDR chart which is the 1.09% over a whole cycle ==> But the .54% rules in this phase.

The 2.19% chart  is still a BULLISH chart.


THE IDR must migrate back to the 1.09% and 2.19%  for a trend to initiate



http://knackeredhack.com/2007/05/21/caveman-lunch-with-taleb-part-2/#more-183

The foundation of the problem with information is the confirmation bias. The problem is that if I give you a lot of data points, you are going to produce a lot of theories along the way. So your idea of the process is going to be much more distorted than if you have a smaller amount of data. There I use the image of the dog, where you increase the resolution of the dog, slowly 10 steps, people don’t see a dog. If you increase the same amount five steps, they see a dog. The difference between these two is the confirmation bias. In the one you have nine theories, in the other you have four theories. Every time you produce a theory you start looking for confirmation. What can you do against confirmation? You can do a lot of things. The beauty of a blog is that you don’t have to present facts according to shelf space or number of pages (like a newspaper). You can make your blog the length to accommodate the nature of the information. You can have fewer posts. What happens is that the significance of events is not linear. Some events — look at history, look at how many events are discussed in newspapers, and how much history books retain. Look at Sarajevo, the significance is a billion times that of other events that occurred on the same day.

All is FLUX and CHANGE   When nothing is happening   EVERYTHING IS HAPPENING

So when it does not move  ,  is IMPORTANT.


It gets there bit by bit ( POSITION BUILT )   BUT HAPPENS ALL AT ONCE ( TREND )


According to this theory, a crash occurs because
the market has entered an unstable phase and any
small disturbance or process may have triggered the
instability.
Think of a ruler held up vertically on your finger:
this very unstable position will lead eventually to its
collapse, as a result of a small (or absence of adequate)
motion of your hand or due to any tiny whiff of air.
The collapse is fundamentally due to the unstable
position; the instantaneous cause of the collapse is
secondary. In the same vein, the growth of the
sensitivity and the growing instability of the market
close to such a critical point might explain why
attempts to unravel the local origin of the crash have
been so diverse. Essentially, anything would work
once the system is ripe.




Now think of the SAME DYNAMICS for a MOVE UP  ==>  POSITION  => Then anything can be trigger .

Motorway

XAO

We certainly had congestion

a move up  EVENT and a move back EVENT

Because of the fractal nature of markets, the impact of events cannot be determined by measuring the absolute price move, but has to take into account the full price trajectory. With  a straight price move having a smaller impact than a zigzagging price move of equal size occurring within the same time period. 
Also a  slow price move having a smaller impact than a fast move of the same amplitude. R Olsen

Ok RDW would say the same thing

RDW would also  then say

Volume and the intensity of action  . 

+ factors of Support or  Pressure  (The points at  the ends of the columns )

PRICE , VOLUME  & TIME in the context of POSITION 

Ok the move down was quicker and on higher volume

( The move up was on low volume  not much demand came in ... Supply entered at the top )

atm would put the index in a bearish postion

much depends on the strength of the next rally ( good short ? )

and what happens on any move lower ( it is already  below the main pivot of that congestion zone fallen back through where most of the longs were established  obvious cascade zone or a bear trap zone  ... )

We could get a correction back to the 50% level set up a very good buy zone ~   4350 ( a correction back there still leave the longer trend UP )

Things to watch out for is a poor demand rally

with contracting volume

and what happens if the price tries to move lower

If you look at the earlier XAO chart on the blog I marked the  congestion (the activity at the top ) as a cause for a move down and asked would the count down be exceeded. It has and as a result it  now brings in to play  larger counts

TEST <===> RESPONSE

EVENTS

we measure EVENTS

The immediate trend is WHAT PRICE WOULD YOU GET IF YOU HAD TO SELL in 1 min !

This atm is DOWN-----> need some work to make the chart bullish here 

But price action is and was bearish up till this point

But plenty of room for correction back to halfway point and still be  BULL MARKET

COUNTS are measuring tools

stop look and listen points

If a count is negated that is significant too

We measure the cause of SUPPORT AND PRESSURE  as it brings about changes in the active time horizons

If the price moves UP we then will get upside targets

every time  a series of  EVENTS is NEGATED by the NEXT  It makes a stronger case

We FORECAST not PREDICT

IF that congestion at the top was ACCUMULATION

why are we down HERE

below even the small COUNT DOWN ----Test Response     it went sideways TEST... and went down RESPONSE  ..... Now test for next column

HIGHER VOLUME LAST DAY  was that  demand ? But it closed on low and lost ground ?  No SUPPLY WAS IN CONTROL

WHAT IS THE BEST TREND INDICATOR ?

A POINT AND FIGURE CHART !

WHAT IS THE BEST OSCILLATOR ?

A POINT AND FIGURE CHART !  One with a smaller Box Size...

But they can both move the same or different or NOT AT ALL

So much more than just trend and reversion being revealed...

Motorway