martis's - royal spanking friday, page-77

BD, shame on you for not pointing it out to everyone :))

Last night’s action on the DJIA confirmed the backtest of the top of their Trading Range

I couldn’t speak yesterday morning for various reasons :), but admit to completely missing it anyway, but I thought BD would’ve stepped up and pointed that out

After seeing their SOS (sign of strength) last Friday which popped it’s nose above the TR high,

All we were waiting for was a backtest of the former resistance area or LPS (last point of supply) and that didn’t show on the daily, well not clearly anyway

It can be seen quite easily on a 2day chart, as a nice TEST bar, (bottom chart)

On the daily chart, it’s seen as a nice little 2bar reversal, with the first one down (their Tuesday) on lighter volume and the next closing highish

As we all know the 2bar reversal can work well, like when it appears near a former low or in this case a top, with the first bar closing down on LIGHTER volume, NO GOOD if its there with HIGH volume as that may well be indicating it’s going to bust lower, also have to take into account it’s spread

Therefore an aggressive entry is often taken after seeing a 2bar reversal that respects a former S/R level and is taken on it’s close, especially if the spread/volume adhere to the rules.

Also Bot, if your out there, remember that little entry trick that Dr. Gary teaches, well it once again would’ve worked a treat here, as the 2bar reversal’s close was 11,869 and last nights open was 11,872,

Therefore once again if following Wyckoff’s simple rules, one would’ve bought the open after seeing a test like bar in the correct position and been in last night’s action.

This seems bullish atm BUT will also be very very watchful of how the action pans out over the next week or 2, ie wanders higher on nothing etc

last nights day chart to be followed by a 2day chart that shows the 'test' bar that respected the top of our TR, which still has one more day for the last bar to complete