2nd post for 4-19-2007
Lets look at an intraday chart so we can zoom in on the action for today. I have attached a 1 hour chart. Bar 1 is where the market was during my last post 10:20 pm est. That's why I have drawn the fibonacci lines to the low of this bar. This other bars had not printed yet.
Looking at bar B you can see that price subsequently bounced back up to the 61% retracement before heading back down. Once the first move had been missed this was the safest place to enter. See my earlier post this week for clarification.
Okay, if you received the book update last night you now have an idea about 3 bar equilibrium so look at bars A and B. These are inside bars. When you are doing your 3 bar count do not include inside bars. Bar Z would be the 1st bar to include in the count and bar X is the second. The bounce back up to 61% occurred of the bottom of bar X, which is 3 bar equilibrium for this downswing. Three bar is the first place to look to take profits or expect a bounce. A close below three bar is expected to go down 2 more bars. Just remember, don't count inside bars.
Looking at bar B you can see that price subsequently bounced back up to the 61% retracement before heading back down. Once the first move had been missed this was the safest place to enter. See my earlier post this week for clarification.
Okay, if you received the book update last night you now have an idea about 3 bar equilibrium so look at bars A and B. These are inside bars. When you are doing your 3 bar count do not include inside bars. Bar Z would be the 1st bar to include in the count and bar X is the second. The bounce back up to 61% occurred of the bottom of bar X, which is 3 bar equilibrium for this downswing. Three bar is the first place to look to take profits or expect a bounce. A close below three bar is expected to go down 2 more bars. Just remember, don't count inside bars.
Jerry.
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