ta charts

Hi, Wayward1,

We did not exchange any posts on the trade forum, but I always followed your posts with interest, as I have here on Hotcopper. Considering quite a few other posters also value your opinion, I thought I’d start a new chart thread that can be bumped along every few weeks/months as things proceed. It will keep all the TA discussion together, something Aka has always tried to do in the past. I’m a novice on fib time to say the least and hence I wanted to check a few things with you if you don’t mind.

First, I have a 261.8% projection (Jan 2011 high) line close to 29c. Is this the basis of your 29c resistance line?

Second, taking 144 bars off the low, could price not "ideally" penetrate the primary fib fan after 21 May 2013 at a price below 35c. My interpretation is that you have instead given significance to 610 bars, early June 2013 and 33c.

Third, I have been sitting on an alternative Fib based chart for a few months now. I wasn’t going to post it because by doing so it influences the outcome. I’ve lost patience. The methodology reflects my TA leaning toward digital signal processing (DSP) and the requirement to close all price and time gaps. While the choice to jump a price is just as legitimate as a choice to trade a price, artificially closing a gap from a DSP perspective does not really concern me too much. It has little statistical significance to my output and the gaps can still be accounted for thereafter on a discretionary basis if you wanted to. Regards time gaps, the market is closed on weekends and during trading halts and hence there is no signal. My logic is that the culmination of denied access to the market is vented on the return to trading and is captured in the bars that immediately follow the weekend or the trading halt.

If I understand things correctly, most fib time exponents exclude weekends from bar counts, but include trading halts. PLV has had 75 trading halt bars, 65 in succession leading up to the 377 bar time event. My chart (bottom one below) excludes the trading halt days, and using 89 bars off the low, primary fan penetration can ideally occur in late Feb 2013 at a price below 42c. My concern is that I find it arbitrary to include trading halt bars when the market for venting fear/greed was closed to PLV buyers/sellers (as is the case on weekends). Statistical testing of trading halt day effects on fib counts would be a difficult task given their relative infrequency and the need for them to be so significant as to alter a fib cycle. I am interested in your logic for including trading halts to see if I am missing anything and to tap into your broader knowledge of what most fib price/time traders do in this regard.

The implications for the less TA inclined is that Wayward's chart will "ideally" need to absorb time with price moving horizontally for a while. My chart will preferably maintain its current course. This discussion is purely methodological. I actually prefer Wayward's chart since it has a superior ratio of price and time. To that extent I hope he tells me my chart is rubbish.

Finally, knowing that a gap has a 96% probability of closing provides insufficient information for a trade in my opinion. If might take 1, 2 or 5 years to close the gap. Are you aware of any time frames attached to those probabilities? Something like, X% of gaps are closed within Y bars, with the remainder occurring thereafter.

I’ve also copied your chart (top one below) for easy comparison. Yell out if you want the dates for the less obvious trading halt days.

Cheers and sorry for the length of the post.

Pelm - leave that Japanese snow alone. Do some base jumping at Irvine instead and report back on Cockatoo progress while you are there. Snow is for pussies lol!

Bleasby