A free mini-seminar on the TC Cycle...(a diary of the discovery process)
and...How to "do" actual technical analysis - - - - Let the chart take you where it leads. Long term perspective narrowing to present action. This is not picking parameter sets and slapping Fibonacci on it using preset formulae and predetermined "counts". That's "applying" technical analysis that has already been done. Nothing new can come from it. It's technical, but not analysis per se....any more than the GFS weather model is analysis.
Below is analysis that leads to the process of discovery...it's more like playing with an erector set and tool shop rather than a nintendo gamebox and joystick.
First...bare-bones look at what a 3d RSI trick is.
On a daily chart, the 3 dRSI rises above 95 and stays there for AT LEAST 3 days. The 3 dRSI is then said to have been "pasted to the ceiling"...or "pasted".
There are also volume rules for those 3 days.
THEN price will dip and so will the 3 dRSI.
THEN price will bump up then dip again...it happens nearly EVERY TIME a paste occurs.
That action sets what is called a "hitch" on the indicator.
From the end of the paste to that hitch...AND BEYOND...is drawn the "Trigger Line".
Once the hitch is set, the indicator must necessarily be below the trigger line. At that point, any break of the indicator over the trigger line is known as a 3dRSI trick signal.
Message 31676710
As you can see for an individual stock on a daily basis, a "trick signal" is good for a 3 day move.
This same dynamic is directly applicable on the monthly chart of the SPX with a much stronger influence.
AND on the SPX, the additional benefit of the trigger line providing a key, unknown, dynamic point - ie temporal clearance - makes this approach especially useful.
Message 32259422
7/29/2019 1:05:52 AM
It looks like things are about to get real interesting.
SPX 3mRSI is working on an 8 month long paste with a hitch and a downward reset hitch.
In fact...this technical situation is unprecedented in at least the last 30 years.
If the market wants to start taking out these lines...first the reset line...then the trigger line...........and the Fed doesn't get in the way.
Yikes.
If the market can't take out these lines.....
Yikes. They do represent a build of negative divergence.
This is quite the point in time. If the Fed wants it to go....it'll go. It's teed up to break the negative divergence trendline...or not.
Personally, I think the Fed has no choice but to avoid even a normal correction much less a deep correction. Worldwide and solar systemwide events are too close to overtaking things.
It's hard to say when they will...but they will. And I'm sure the Fed knows it. But this would be a bad time for them to do something stupid.
Message 32259442
7/29/2019 1:48:12 AM
OOOPS - I don't know how I missed it but this situation DID occur once before in the last 30 yrs.
The SPX went through the lines and ran from 800 to over 1100 in a year.
The paste went from 11/95 to 6/96 and both the reset and trigger lines were broken in May/June 1997 at S&P 800.
August 1998 had a normal correction after the move and those same two lines were broken to the upside again on the move up out of the correction that went from 1100 to 1500.
Back to back 30% moves on the S&P on a monthly trick signal.
Then the bursting tech bubble didn't begin to recover until after the trigger line cleared from the chart.
So....the formation has a history...an interesting one. Should be interesting again.
What's a Fed to do? heheh.
Message 32264082
7/31/2019 11:56:18 PM
And I'm sure the Fed knows it. But this would be a bad time for them to do something stupid."Japanese, "doji" means blunder or mistake, referring to the rarity of having the open and close price be exactly the same."
So what does the market think of the Fed's performance in July?
It's like someone climbed a mountain and planted a gravestone.
Now we get to see how seriously monthly candlesticks are taken in 2019.
Message 32264940
8/1/2019 1:48:24 PM
RUBI is another one that had price go higher on the hitch than it was at paste peak.
These prices blowing up out of the pattern seem to be becoming a "thing".
Nice grab RWS.
Message 32264957
/1/2019 1:57:30 PM
From: RWS
Didn't notice that violation....fortunately
Message 32264968
8/1/2019 2:03:40 PM
It's not a violation.
It creates a rising, sometimes widening pennant on the price chart.
It's a profile chartists drool over cuz when they go.........
Message 32265300
8/1/2019 4:44:00 PM
It won't be an easy thing to obliterate that paste on the SPX 3mRSI.
The battle is getting interesting though.
Since price blew up out of the pattern on the hitch (a la RUBI et al), that could explain all the other blow-ups recently.
(blowups and widening flags/pennants)
Message 32265350
8/1/2019 5:24:09 PM
Market geometry. Chart curiosities.
Message 32265460
8/1/2019 6:58:32 PM
Pay no attention to all that banging and squeaking coming from the sub-basement....it's just me down in the lab.
Message 32265552
8/1/2019 7:47:05 PM
If I take this any further I'm going to have to invent a new terminology for it.
I hate it when that happens.
So taking the current SPX chart situation...as a whole...back to the previous 3mRSI paste situation...as a whole...
the recent blow-off top prevention tactics with the tag-teaming of Fed/Trump tweet (shades of Alan G's "irrational exuberance") could result in a considerable waiting period for market direction to reassert itself.
(If the civilized world can hang on for another year and a half)
Message 32265587
8/1/2019 8:14:05 PM
Ok...last tweak for the day. This one's a print.
[edit] heheh.
Message 32265939
8/2/2019 1:48:42 AM
This one has some details that add some more technical/pattern depth.
(Who caught the textbook MIMBO on the SPX that ran from 2007 to 2013??)
Message 32266581
8/2/2019 12:26:00 PM
Final, final version...
(remember to break the sto into it's components down the Fib. spiral for a read on the 233, 34, 13)
Questions, comments, criticisms ???
Message 32266796
8/2/2019 2:23:25 PM
It's all there.
The underlying structure of the chart is anchored to all that "stuff".
The stuff tells a story and the market is following that story.
When the 3mRSI gets outta hand, there's the "threat" of a large, bubble-like run up building.
Everybody loves a market run but on the other side of a bubble, there's lots and lots of carnage.
Where you see that first 3mRSI trigger line reach zero is when the carnage from the dotcom bubble was over. New channel lines start from that point. The upper line first.
At the moment it "just so happens" to coincide with the top of the expanding pennant created off this most recent 3mRSI paste.
So, basically, the market was threatening a bubble/crash. Whatever way TPTB use to see this, they're seeing it too and they don't want the crash on the other side. So, we wait until the market is allowed to go again from lower down in the channel... like responsible children who do not run in the hallways.
Some of the lines are resistance/support that can be an indication of timing in the story.
Message 32266837
8/2/2019 2:43:53 PM
And the MIMBO shows exactly when the band struck up a rousing rendition of , "Happy Days Are Here Again". The MIM peak is exactly at the mid-point between now and when the upper channel line began.
This is also the same point where another channel line intersects the current one. That intersecting channel line was broken through during the current 3mRSI pasting so there's a lot of significance to all the "stuff" on the chart as far as market dynamics on multiple time scales.
So the arrival of multiple lines intersecting in July 2019 which is exactly when a gravestone doji was put in...kinda says something.
The doji shows there was significant money all teed up for the blowoff...but they got it wrong because the adults peeked out of their offices and yelled, "NO RUNNING IN THE HALLWAYS!"
"...and Woody, PUT DOWN those scissors!"
Message 32267027
8/2/2019 4:54:31 PM
Forgot to mention, that timing marker where the 3mRSI trigger line runs from 1996 to 2003 where it clears from the chart when the dot-com carnage is over and a new upper channel line begins, already has a term. It's from way back so probably forgotten about by anyone still here from back then.
...forgot to mention Temporal ClearanceMessage 12021401
Message 32267465
8/3/2019 2:25:05 AM
So we see what happened at the low of the busted dot-com bubble.
The trigger line cleared and the next top marked the onset of the "credit crisis".
So the trigger line was pivotal in both the run up of the (historically significant) dot-com bubble (1, 2, 3, 4)), the top, and the timing of the bottom on the other side.
Every break above the trigger line brought the next leg up until the 233, 34, 13 sto was no longer supportive.
Then the market didn't start to recover until after the trigger line cleared.
When the trigger line did clear, the 3 mRSI went on to its next past. A 3 month long paste...and the next new alltime high was born and set up by Neg Div to die.
Message 32267469
8/3/2019 3:50:40 AM
So...in 2007, the trigger line remained unbroken and the market, for reasons of underlying fundamental "credit adjustment" and the transition involved, sorta, kinda "cratered".
BUT......BUT.....the bottom of that crater set the anchor for the lower line of the current channel as well as the starting point for the first reference high of the SPX MIMBO which is intricately tied into the 3mRSI activity and current situation.
Next post addresses how the 3mRSI paste trigger line from 1/1/2007 temporally cleared the shit out of everything after Sept 2012.
 This is about 4 charts of the series rolled into one....
I could easily develop a two day, 20 hour, stupidly intricate seminar presentation on this approach. It's damn flawless when understood. |
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Message 32267474
8/3/2019 5:25:38 AM
Take note that 3mRSI pastes only occur AFTER the trigger line from the previous paste clears.
Message 32268210
8/3/2019 6:35:12 PM
So the market can be accurately described with cycles of 3mRSI paste/TC (temporal clearance).
Each cycle having easily identifiable periods for being long/short.
Right now, that first step down from the trigger line was the first sell signal.
The second step down more like a sell shout with a gravestone doji for an exclamation point.
Next up to the podium:
Woody - with his further look into the methodology.
Take it away Dr. W. |
