It's a long story and I have not figured out if these charts make sense or not. I started the thread to organize the evidence.
The basic premise is that some charts have preferred rates of change - even though they jump levels.
The charts are constructed by looking for (roughly) equal spaced parallel lines on log charts that interact with lots of well-known, significant candle features - gaps and hammers in particular, but also opens, closes, mid-candles, HODs, and LODs. I pick the "most significant" trendline and clone it to see where it fits in the chart. If it seems to make sense, I track it further.
This leads to a slanted grid of support/resistance levels that may have significance in both price and time domain.
The best result I have had so far with this technique is with RMBS. I drew the top five lines in mid-Nov and the bottom three lines early in the morning of the big Feb drop. During that day, that big red candle spent a lot of time stuck on the line that is currently ~30 and didn't drop to the next line until the closing action. It never hit the bottom line.
stockcharts.com[w,a]dhclyiay[pd20,2!b20!b50!b200!f][vc60][iut!lb5!la12,26,9!ll14][J26896766,Y]&listNum=9
All of the lines on that chart were drawn before the big gap up in Feb. and I think that the price action since that time is highly correlated to the slants. |
