My Proprietary Methodologies

References for the many proprietary applications that you'll learn each day in my chaRTroom:

Terms & Characterizations
RSIs
Timing Windows (fixed)
Timing Windows (dynamic)
Setups
Scroll down the left column of each section to see original concepts and applications that comprise my methodology. Brief descriptions are included.
.

TERMS and CHARACTERIZATIONS
Chipping away (at support or resistance) Multiple reactions off of a consistent level often eventually break through, even if only temporarily (obligatory)
Compensating for the delay A pattern that is triggered during a timing window after the one in which it developed will likely extend beyond the original or minimum potential
Complexity trending on a smaller scale, with the first trending effort’s reaction exceeding the prior range
Congestion 10-15 minutes of overlapping bars… usually attracts price back to it at least once
Consolidation / Ranging Price fluctuations that do not soon extend or reverse a trend
Errant tick An extreme price that prints momentarily on a 1-minute bar. It is considered noise, and is discarded from calculations.
Filters / Context Anticipating the likely outcome will allow assuming the nature of current price action
Gravitational pull A prior trend extreme or congestion is likely to be retested when price re-enters its orbit
Higher prior low / lower prior high Secondary support or resistance within a consolidation that has already launched a new trending attempt. When revisited, its test usually holds the first time, but fails on a retest.
Indicator A technical indicator, usually RSI or MACD
Ineffectual optimism/pessimism A trending attempt that expends energy without extending or gaining traction for its effort. It is a form of distribution at highs, or of accumulation at lows.
Inflection The price reaction at a relevant level which should either spike through the level, or else reverse sharply and suddenly
Inversion A fully-formed setup that doesn’t trigger on a timely basis will tend to perform as substantially in the opposite direction. Also, a triggered setup that meets its target and already reverses back to its trigger during the same timing window will perform as substantially in the opposite direction
Marginalized Sponsorship has gained traction by creating a target, and beginning to trend toward fulfilling it, marginalizing the counter-trend sponsorship
Noise Price action that hasn’t attracted new sponsorship is irrelevant to a pattern’s development. This can include the knee-jerk reaction to news.
Obligatory reaction to support/resistance A momentary countertrend blip caused naturally by there having been a reaction previously at the same level
Pattern Every pattern is at heart a triangle, and its measurements can identify other support / resistance
Persist Trending that extends through an additional timing window
Pierce A single price bar that develops only partially beyond a prior extreme
Pivotal high/low A trend’s penultimate extreme price, having multiple uses: Specific price action becomes required after revisiting it, it is often one of a pattern’s variables for measurement, etc.
Pivotal trendline A plane whose first two points are interrupted by the actual trend extreme
Probe Multiple consecutive price bars beyond a prior extreme
Productive Trending attempt that produces a new price extreme
Rally / Decline Price movement in the trend’s direction, which exceeds a prior trend extreme
React Counter-trend price action that is expected to be only temporary
Refuel Counter-trend price action traps its sponsorship, helping to fuel the trend
Reject Reversing a trending attempt back into the range that launched its breakout
Required An objective that must be tested eventually, regardless of the degree or duration of interim price action
Retrace A temporary reversal of the prevailing trend, likely to resolve by resuming the trend to a new price extreme
Room for noise A small price range surrounding an objective that can satisfy it if met, or that can exceed it without establishing an additional objective
Setup The combination of multiple elements and conditions that have a likely resolution
Signal The price that unleashes a pattern’s potential, triggered initially by probing the signal, and then by exceeding its own first 3-minute extreme
Sponsorship Characterization of the buyers/sellers that are impacting price action at a given time, strong-handed vs. weak-handed
SSS sudden, steep, and substantial resolution expected from a setup being triggered
Stretching the rubber band Temporary countertrend price action that doesn’t gain traction for its effort, is instead fueling its reaction for a more substantial move in the opposite direction
Support / Resistance A price point that inhibits trending beyond it, or that attracts price to it. The levels have different names that define their purpose: signal, target, bounce limit / pullback limit
Tactics Techniques for entering, adding and exiting a position
Templates / Process of elimination Matching actual price action to a narrowing group of patterns to make the remaining possibilities likelier to develop
Timing windows (dynamic) Intraday time periods that begin when specific price action occurs
Timing windows (fixed) Daily recurring time periods that identify a common sponsorship, with likely behaviors
Traction Sponsorship has gained traction by creating a target, and beginning to trend toward fulfilling it, marginalizing the counter-trend sponsorship
Trending A series of higher highs and higher lows, or of lower highs and lower lows
Trendline A plane that is created from two points, and which extends indefinitely into the future. Its two creation points must both be either bar highs, bar lows, or closes
Vulnerable Since trends are efficient, inefficient price action can warn that a trend is vulnerable to reversing

.

RSIs
Overbought / Oversold Value above 80 or below 20, respectively.
Simultaneously overbought / oversold Both 1-minute and 3-minute RSIs overbought or oversold during the most recent instance of the current trend’s price extreme.
Divergence (negative or positive) One or both of the 1-minute and 3-minute RSIs not returning to overbought/oversold, despite price extending to a new extreme.
Persistently overbought/oversold 3-minute RSI remaining overbought or oversold while price is trending, although 1-minute RSI has left overbought or oversold territory momentarily during the trending
RSI correction Overbought or oversold that retraces back to the midrange of the indicator’s values (toward 50) can fulfill a correction without price also retracing

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TIMING WINDOWS (FIXED)
Support/resistance test Holding the test of support or resistance during a timing window tends to serve as a trend extreme so the subsequent timing window can trend in the opposite direction
Inertia open A narrowly ranging morning is likely if three of the FFF (first 5 15-minute) checkpoints each overlap the same relevant level
Inertia day Three consecutive overlapping afternoon timing windows usually produce three overlapping morning timing windows
Bias parameters Conditions that are tested during the open, or upon exiting the noon hour, that identifies what sponsorship is influential to price action
Friday morning bias persists Friday morning’s bias signal tends to influence price action through the noon hour
Morning bias environment Signaled at 10:15, and beginning to lapse at 11:30 through noon
Afternoon bias environment Signaled at 1:20, and beginning to lapse at 2:30 through 3:00
Noon hour Less participation creates less predictability, and room for an extra 1-2 ticks of noise or countertrend moves. Trending underway through its 40-45 minute mark tends to persist through the afternoon
Opening 15 minutes of volatility The 9:45 print is compared to price action preceding it for a preliminary indication of the bias parameter’s signal. The window comprises multiple sponsorships which allows for an extra 1-2 points of noise. Influence of any overnight patterns must be evident during the opening 15 minutes of volatility in order to have any influence on intraday price action.
3:10-3:20 ET Trending during this 10-minute window, and the resolution to any support or resistance probed during it, is compared to the afternoon bias environment’s exit for any additional signal
3:37-3:52 ET Pre-close position-squaring occurs mostly during this window as traders and trading desks review their overnight exposure
3:57 ET Price action not yet printed before coming within 3 minutes of the cash session close is not relevant to ongoing patterns
Cusps Like the friction between two gear wheels shifting, periods between timing windows are more vulnerable to irrelevant noise
Friday Factors The impending weekend illiquidity attracts unique sponsorship which can exacerbate trending that gets underway, or inhibit it from getting underway. Early departures by more participants makes the midday timing windows less influential.

.

TIMING WINDOWS (DYNAMIC)
3-minute rule Probing a level (support/resistance, bounce limit / pullback limit, signal, target) must still exceed the extreme of its first 3 minutes before confirming that new sponsorship has been attraction, instead of that level holding its test
4-tick rule While awaiting the 3-minute extreme to probing a level, a counter-trend reaction can probe the level by 4 ticks and still be in the process of trying to attract sponsorship
Pullback limit / bounce limit The maximum allowable retracement of a trending attempt that maintains the sponsorship, so long as the first 3 minutes of probing is not exceeded. A limit whose test has held and produced a new trend extreme is labeled “productive,” and just revisiting it at that stage could undermine the trend.
Mechanical reversal signal Extending beyond a signal’s first 3 minutes extreme, but nevertheless reacting more than 4 ticks in the opposite direction beyond the signal, is probably reversing the trend. Similarly, a previously productive bounce whose own test is retraced tends to be reversing the trend.
Second consecutive confirmation Breakouts are considered valid, but remain subject to confirmation from a second consecutive extreme, either by a second consecutive close, or by exiting the subsequent timing window at a new extreme. A trend change confirmation need not extend, but must only maintain the trend change signal’s break.
Post-news dust settling Strong-handed sponsorship does not adjust positions in the immediate wake of economic reports, so the first 90-second window’s price action is not qualified for triggering a signal
Violation Extending beyond the 3-minute extreme of first probing a bounce limit or pullback limit is considered to have violated it

.

SETUPS
3-day weekend bias Bigger participants complete any required adjustments to their portfolios before liquidity reaches unusual levels ahead of thinly traded environments. That tends to be done by Wednesday’s close, whose intraday timing windows are compared to the recent trend to identify accumulation or distribution
3rd consecutive RSI divergence ignored Three consecutive positive or negative RSI divergences that have not produced a fresh reaction tend to precede substantial trending through the next timing window
3rd-minute fade of pullback limit / bounce limit Trending that is being corrected by a test of its pullback limit or bounce limit can be entered near the end of the allowed 3 minutes, in anticipation of the trend resuming
Alternation Similar setups that appear sequentially tend not to resolve similarly
Bias target, bias offset The objective put into play by the morning’s bias parameters must be met eventually, unless specifically invalidated before the bias environment exit
Close-quarters double top/bottom Reactions from these patterns – which are generally about 10 minutes in development and 4-5 ticks high, not overlapping earlier trending – tends to be temporary and fully retraced
Complex Pattern Beginning a consolidation after reacting from the trend’s extreme, with complexity that does not retest the trend’s extreme, is called “Complex.” The pattern tends to form a Head & Shoulders or Descending Triangle. Its breakout in the prevailing trend’s direction is likely to only temporary before reversing suddenly, sharply and substantially to at least retest the Complex pattern’s extreme. Recent examples ZB and CL 10/16/2014
Confirmed breakout A second consecutive close beyond the breakout session’s extreme would require there to be at least an eventual third close in the breakout’s direction
Double basing continuation pattern An otherwise non-descript consolidation during a trend that resolves in the direction of the trend, but only briefly before forming an identical consolidation, then tends to resume the trend again, but much more substantially
Dry Cleaners morning Either from signaling inertia, or from quickly meeting and holding an objective, the lack of predictability in a relatively narrow range makes the morning better suited to running errands
Expiration open trending Trending through the first 15 minutes of volatility on expiration day tends to persists through the day
Expiration trending Printing a new trend extreme during expiration session cannot also be the ultimate trend extreme
Extreme sentiment / sentiment extreme Exiting the weekend with extreme sentiment is often a sentiment extreme that ends and reverses during the opening 15 minutes of volatility
Fade RSI divergence at support / resistance Support or resistance is likely to react when RSIs diverge during its test
Failed formed setup A fully-formed setup that doesn’t trigger on a timely basis will tend to perform as substantially in the opposite direction
Fibonacci extension/retracement The most influential application is a 61.8% retracement of a trending attempt. Recovering from only a 38.2% retracement into a breakout is predictive of impatient weak-handed sponsorship. Behavior that accompanies the 61.8% extension of a breakout can be predictive. Other relevant calculations are 161.8%, and the 238.2%-261.8% corridor.
Friday Factor Closing at a new trend extreme on Friday assures there will be at least one more extreme close, albeit not necessarily consecutive, which is especially useful when the next session(s) immediately correct
Gap fills come in pairs A trend reversal that fills one gap from a prior consolidation tends also to fill the gap that preceded it
Greeting news window Price action during the 2-minute window that precedes an influential high-profile news item (e.g. economic report) 3-5 minutes away tends to react
Hold-short / hold-long Closing beyond the trigger of a pattern without yet fulfilling its target can merit holding a position through the cash session close
Holiday high Printing a new trend extreme during expiration session, especially a new trend extreme close, tends not to also be the ultimate trend extreme
Major relationships Comparisons among the S&P 500 and the Dow Industrials, and the NDX-100, can be predictive of trend strength and turning points if the relevant comparison is held for two consecutive sessions
Make-or-break The first session in a multi-session trend that develops exclusively beyond all prior sessions can either entrench the trend by gaining traction, or begin to end it by not gaining traction
Neutralized attraction Fulfilling an outstanding objective neutralizes its attraction
New Globex trend extreme Probing a prior intraday high overnight must be retested eventually intraday, so long as the probe was complex
No-bias trending Trending beyond a bias signal after being too late to trigger it must be retraced to that signal, and also often to the price that had printed when no-bias was triggered
Opening gap extreme Gapping open beyond all prior intraday extremes must eventually be retested after reacting back into the prior intraday extremes
Pivotal high/low retest Returning to a pivotal high or low after having probed the interim extreme is all but required to also revisit the actual extreme
Pivotal trending support break Breaking the pivotal trending support is all but required at least to revisit the actual extreme
Plunge/Surge .618 retrace Unless continuation pattern develops after a plunge or surge, a reaction tends to be attracted to its 61.8% retracement
PM squeeze / capitulation Rejecting a new session extreme during the afternoon bias environment, and exiting the window beyond a last relative extreme, will likely extend sharply in that direction through the final hour
PM traction Exiting the afternoon’s bias environment beyond the noon hour’s range, and entering the final hour even further beyond it, gives its sponsorship traction. Unless rejected immediately at the following open, that traction tends to be rewarded by control of the next morning’s bias environment
Pre-open .618 retracement Retracing an overnight reversal by 61.8% into the open is likely to resume the overnight reversal’s trending
RSI tease / MACD confirmation (last gasp fade) Extended trending that takes RSI to the brink of being overbought or oversold will react sharply, but only temporarily before retesting the extreme for a more durable reversal
RSIs 1-minute and 3-minute overbought / oversold All available strong-handed sponsorship must be expended to produce simultaneously overbought or oversold conditions. Therefore, a countertrend reaction must be sponsored only by weak hands, and would be only temporary. A knee-jerk reaction to news does not qualify, being weak-handed by definition
Running Correction retrace -- 4 steps and a (s)tumble A complex pattern that is centered around a Running Correction which is entered and exited aggressively. After troughing or plateauing, the Running Correction’s upper-quadrant is often revisited
Session-long rally/decline Gapping open beyond the prior afternoon’s bias environment extreme, after having trended away from it into the close, tends to extend in that direction throughout the session. All but one intraday timing window is likely to exceed its prior timing window’s extreme
SPX / ES premium Sudden changes and reversals in the spread between index futures and their underlying cash index value can forecast trend acceleration or change
Trend change Closing beyond the last relative extreme, and not retracing that break on the following session, signals the trend changing direction. At least one more close in that direction is required.
Trend change A confirmed trend change signal must produce at least a third close in the trend change’s direction, unless the trend change signal’s session is retraced entirely
Up/Down-crash The setup begins when 10-11 consecutive trending sessions have been interrupted only by 1-2 non-consecutive sessions that do not close at a new trend extreme. The trend becomes likely either to reverse suddenly, sharply and substantially, or to extend the trend at a much steeper pace
V bottom/top Immediately reversing from a new trend extreme tends to be revisited eventually
WedEX Big money tends to adjust positions during peak liquidity, which is by Wednesday’s close before Friday’s expiration. Comparing its close and intraday timing windows to recent price patterns can reveal an active or passive bias likely to influence Friday afternoon and Monday morning’s price action.

References for the many proprietary applications that you'll learn each day in my chaRTroom:

Terms & Characterizations
RSIs
Timing Windows (fixed)
Timing Windows (dynamic)
Setups
Scroll down the left column of each section to see original concepts and applications that comprise my methodology. Brief descriptions are included.
.

TERMS and CHARACTERIZATIONS
Chipping away (at support or resistance) Multiple reactions off of a consistent level often eventually break through, even if only temporarily (obligatory)
Compensating for the delay A pattern that is triggered during a timing window after the one in which it developed will likely extend beyond the original or minimum potential
Complexity trending on a smaller scale, with the first trending effort’s reaction exceeding the prior range
Congestion 10-15 minutes of overlapping bars… usually attracts price back to it at least once
Consolidation / Ranging Price fluctuations that do not soon extend or reverse a trend
Errant tick An extreme price that prints momentarily on a 1-minute bar. It is considered noise, and is discarded from calculations.
Filters / Context Anticipating the likely outcome will allow assuming the nature of current price action
Gravitational pull A prior trend extreme or congestion is likely to be retested when price re-enters its orbit
Higher prior low / lower prior high Secondary support or resistance within a consolidation that has already launched a new trending attempt. When revisited, its test usually holds the first time, but fails on a retest.
Indicator A technical indicator, usually RSI or MACD
Ineffectual optimism/pessimism A trending attempt that expends energy without extending or gaining traction for its effort. It is a form of distribution at highs, or of accumulation at lows.
Inflection The price reaction at a relevant level which should either spike through the level, or else reverse sharply and suddenly
Inversion A fully-formed setup that doesn’t trigger on a timely basis will tend to perform as substantially in the opposite direction. Also, a triggered setup that meets its target and already reverses back to its trigger during the same timing window will perform as substantially in the opposite direction
Marginalized Sponsorship has gained traction by creating a target, and beginning to trend toward fulfilling it, marginalizing the counter-trend sponsorship
Noise Price action that hasn’t attracted new sponsorship is irrelevant to a pattern’s development. This can include the knee-jerk reaction to news.
Obligatory reaction to support/resistance A momentary countertrend blip caused naturally by there having been a reaction previously at the same level
Pattern Every pattern is at heart a triangle, and its measurements can identify other support / resistance
Persist Trending that extends through an additional timing window
Pierce A single price bar that develops only partially beyond a prior extreme
Pivotal high/low A trend’s penultimate extreme price, having multiple uses: Specific price action becomes required after revisiting it, it is often one of a pattern’s variables for measurement, etc.
Pivotal trendline A plane whose first two points are interrupted by the actual trend extreme
Probe Multiple consecutive price bars beyond a prior extreme
Productive Trending attempt that produces a new price extreme
Rally / Decline Price movement in the trend’s direction, which exceeds a prior trend extreme
React Counter-trend price action that is expected to be only temporary
Refuel Counter-trend price action traps its sponsorship, helping to fuel the trend
Reject Reversing a trending attempt back into the range that launched its breakout
Required An objective that must be tested eventually, regardless of the degree or duration of interim price action
Retrace A temporary reversal of the prevailing trend, likely to resolve by resuming the trend to a new price extreme
Room for noise A small price range surrounding an objective that can satisfy it if met, or that can exceed it without establishing an additional objective
Setup The combination of multiple elements and conditions that have a likely resolution
Signal The price that unleashes a pattern’s potential, triggered initially by probing the signal, and then by exceeding its own first 3-minute extreme
Sponsorship Characterization of the buyers/sellers that are impacting price action at a given time, strong-handed vs. weak-handed
SSS sudden, steep, and substantial resolution expected from a setup being triggered
Stretching the rubber band Temporary countertrend price action that doesn’t gain traction for its effort, is instead fueling its reaction for a more substantial move in the opposite direction
Support / Resistance A price point that inhibits trending beyond it, or that attracts price to it. The levels have different names that define their purpose: signal, target, bounce limit / pullback limit
Tactics Techniques for entering, adding and exiting a position
Templates / Process of elimination Matching actual price action to a narrowing group of patterns to make the remaining possibilities likelier to develop
Timing windows (dynamic) Intraday time periods that begin when specific price action occurs
Timing windows (fixed) Daily recurring time periods that identify a common sponsorship, with likely behaviors
Traction Sponsorship has gained traction by creating a target, and beginning to trend toward fulfilling it, marginalizing the counter-trend sponsorship
Trending A series of higher highs and higher lows, or of lower highs and lower lows
Trendline A plane that is created from two points, and which extends indefinitely into the future. Its two creation points must both be either bar highs, bar lows, or closes
Vulnerable Since trends are efficient, inefficient price action can warn that a trend is vulnerable to reversing

.

RSIs
Overbought / Oversold Value above 80 or below 20, respectively.
Simultaneously overbought / oversold Both 1-minute and 3-minute RSIs overbought or oversold during the most recent instance of the current trend’s price extreme.
Divergence (negative or positive) One or both of the 1-minute and 3-minute RSIs not returning to overbought/oversold, despite price extending to a new extreme.
Persistently overbought/oversold 3-minute RSI remaining overbought or oversold while price is trending, although 1-minute RSI has left overbought or oversold territory momentarily during the trending
RSI correction Overbought or oversold that retraces back to the midrange of the indicator’s values (toward 50) can fulfill a correction without price also retracing

.

TIMING WINDOWS (FIXED)
Support/resistance test Holding the test of support or resistance during a timing window tends to serve as a trend extreme so the subsequent timing window can trend in the opposite direction
Inertia open A narrowly ranging morning is likely if three of the FFF (first 5 15-minute) checkpoints each overlap the same relevant level
Inertia day Three consecutive overlapping afternoon timing windows usually produce three overlapping morning timing windows
Bias parameters Conditions that are tested during the open, or upon exiting the noon hour, that identifies what sponsorship is influential to price action
Friday morning bias persists Friday morning’s bias signal tends to influence price action through the noon hour
Morning bias environment Signaled at 10:15, and beginning to lapse at 11:30 through noon
Afternoon bias environment Signaled at 1:20, and beginning to lapse at 2:30 through 3:00
Noon hour Less participation creates less predictability, and room for an extra 1-2 ticks of noise or countertrend moves. Trending underway through its 40-45 minute mark tends to persist through the afternoon
Opening 15 minutes of volatility The 9:45 print is compared to price action preceding it for a preliminary indication of the bias parameter’s signal. The window comprises multiple sponsorships which allows for an extra 1-2 points of noise. Influence of any overnight patterns must be evident during the opening 15 minutes of volatility in order to have any influence on intraday price action.
3:10-3:20 ET Trending during this 10-minute window, and the resolution to any support or resistance probed during it, is compared to the afternoon bias environment’s exit for any additional signal
3:37-3:52 ET Pre-close position-squaring occurs mostly during this window as traders and trading desks review their overnight exposure
3:57 ET Price action not yet printed before coming within 3 minutes of the cash session close is not relevant to ongoing patterns
Cusps Like the friction between two gear wheels shifting, periods between timing windows are more vulnerable to irrelevant noise
Friday Factors The impending weekend illiquidity attracts unique sponsorship which can exacerbate trending that gets underway, or inhibit it from getting underway. Early departures by more participants makes the midday timing windows less influential.

.

TIMING WINDOWS (DYNAMIC)
3-minute rule Probing a level (support/resistance, bounce limit / pullback limit, signal, target) must still exceed the extreme of its first 3 minutes before confirming that new sponsorship has been attraction, instead of that level holding its test
4-tick rule While awaiting the 3-minute extreme to probing a level, a counter-trend reaction can probe the level by 4 ticks and still be in the process of trying to attract sponsorship
Pullback limit / bounce limit The maximum allowable retracement of a trending attempt that maintains the sponsorship, so long as the first 3 minutes of probing is not exceeded. A limit whose test has held and produced a new trend extreme is labeled “productive,” and just revisiting it at that stage could undermine the trend.
Mechanical reversal signal Extending beyond a signal’s first 3 minutes extreme, but nevertheless reacting more than 4 ticks in the opposite direction beyond the signal, is probably reversing the trend. Similarly, a previously productive bounce whose own test is retraced tends to be reversing the trend.
Second consecutive confirmation Breakouts are considered valid, but remain subject to confirmation from a second consecutive extreme, either by a second consecutive close, or by exiting the subsequent timing window at a new extreme. A trend change confirmation need not extend, but must only maintain the trend change signal’s break.
Post-news dust settling Strong-handed sponsorship does not adjust positions in the immediate wake of economic reports, so the first 90-second window’s price action is not qualified for triggering a signal
Violation Extending beyond the 3-minute extreme of first probing a bounce limit or pullback limit is considered to have violated it

....

SETUPS
3-day weekend bias Bigger participants complete any required adjustments to their portfolios before liquidity reaches unusual levels ahead of thinly traded environments. That tends to be done by Wednesday’s close, whose intraday timing windows are compared to the recent trend to identify accumulation or distribution
3rd consecutive RSI divergence ignored Three consecutive positive or negative RSI divergences that have not produced a fresh reaction tend to precede substantial trending through the next timing window
3rd-minute fade of pullback limit / bounce limit Trending that is being corrected by a test of its pullback limit or bounce limit can be entered near the end of the allowed 3 minutes, in anticipation of the trend resuming
Alternation Similar setups that appear sequentially tend not to resolve similarly
Bias target, bias offset The objective put into play by the morning’s bias parameters must be met eventually, unless specifically invalidated before the bias environment exit
Close-quarters double top/bottom Reactions from these patterns – which are generally about 10 minutes in development and 4-5 ticks high, not overlapping earlier trending – tends to be temporary and fully retraced
Complex Pattern Beginning a consolidation after reacting from the trend’s extreme, with complexity that does not retest the trend’s extreme, is called “Complex.” The pattern tends to form a Head & Shoulders or Descending Triangle. Its breakout in the prevailing trend’s direction is likely to only temporary before reversing suddenly, sharply and substantially to at least retest the Complex pattern’s extreme. Recent examples ZB and CL 10/16/2014
Confirmed breakout A second consecutive close beyond the breakout session’s extreme would require there to be at least an eventual third close in the breakout’s direction
Double basing continuation pattern An otherwise non-descript consolidation during a trend that resolves in the direction of the trend, but only briefly before forming an identical consolidation, then tends to resume the trend again, but much more substantially
Dry Cleaners morning Either from signaling inertia, or from quickly meeting and holding an objective, the lack of predictability in a relatively narrow range makes the morning better suited to running errands
Expiration open trending Trending through the first 15 minutes of volatility on expiration day tends to persists through the day
Expiration trending Printing a new trend extreme during expiration session cannot also be the ultimate trend extreme
Extreme sentiment / sentiment extreme Exiting the weekend with extreme sentiment is often a sentiment extreme that ends and reverses during the opening 15 minutes of volatility
Fade RSI divergence at support / resistance Support or resistance is likely to react when RSIs diverge during its test
Failed formed setup A fully-formed setup that doesn’t trigger on a timely basis will tend to perform as substantially in the opposite direction
Fibonacci extension/retracement The most influential application is a 61.8% retracement of a trending attempt. Recovering from only a 38.2% retracement into a breakout is predictive of impatient weak-handed sponsorship. Behavior that accompanies the 61.8% extension of a breakout can be predictive. Other relevant calculations are 161.8%, and the 238.2%-261.8% corridor.
Friday Factor Closing at a new trend extreme on Friday assures there will be at least one more extreme close, albeit not necessarily consecutive, which is especially useful when the next session(s) immediately correct
Gap fills come in pairs A trend reversal that fills one gap from a prior consolidation tends also to fill the gap that preceded it
Greeting news window Price action during the 2-minute window that precedes an influential high-profile news item (e.g. economic report) 3-5 minutes away tends to react
Hold-short / hold-long Closing beyond the trigger of a pattern without yet fulfilling its target can merit holding a position through the cash session close
Holiday high Printing a new trend extreme during expiration session, especially a new trend extreme close, tends not to also be the ultimate trend extreme
Major relationships Comparisons among the S&P 500 and the Dow Industrials, and the NDX-100, can be predictive of trend strength and turning points if the relevant comparison is held for two consecutive sessions
Make-or-break The first session in a multi-session trend that develops exclusively beyond all prior sessions can either entrench the trend by gaining traction, or begin to end it by not gaining traction
Neutralized attraction Fulfilling an outstanding objective neutralizes its attraction
New Globex trend extreme Probing a prior intraday high overnight must be retested eventually intraday, so long as the probe was complex
No-bias trending Trending beyond a bias signal after being too late to trigger it must be retraced to that signal, and also often to the price that had printed when no-bias was triggered
Opening gap extreme Gapping open beyond all prior intraday extremes must eventually be retested after reacting back into the prior intraday extremes
Pivotal high/low retest Returning to a pivotal high or low after having probed the interim extreme is all but required to also revisit the actual extreme
Pivotal trending support break Breaking the pivotal trending support is all but required at least to revisit the actual extreme
Plunge/Surge .618 retrace Unless continuation pattern develops after a plunge or surge, a reaction tends to be attracted to its 61.8% retracement
PM squeeze / capitulation Rejecting a new session extreme during the afternoon bias environment, and exiting the window beyond a last relative extreme, will likely extend sharply in that direction through the final hour
PM traction Exiting the afternoon’s bias environment beyond the noon hour’s range, and entering the final hour even further beyond it, gives its sponsorship traction. Unless rejected immediately at the following open, that traction tends to be rewarded by control of the next morning’s bias environment
Pre-open .618 retracement Retracing an overnight reversal by 61.8% into the open is likely to resume the overnight reversal’s trending
RSI tease / MACD confirmation (last gasp fade) Extended trending that takes RSI to the brink of being overbought or oversold will react sharply, but only temporarily before retesting the extreme for a more durable reversal
RSIs 1-minute and 3-minute overbought / oversold All available strong-handed sponsorship must be expended to produce simultaneously overbought or oversold conditions. Therefore, a countertrend reaction must be sponsored only by weak hands, and would be only temporary. A knee-jerk reaction to news does not qualify, being weak-handed by definition
Running Correction retrace -- 4 steps and a (s)tumble A complex pattern that is centered around a Running Correction which is entered and exited aggressively. After troughing or plateauing, the Running Correction’s upper-quadrant is often revisited
Session-long rally/decline Gapping open beyond the prior afternoon’s bias environment extreme, after having trended away from it into the close, tends to extend in that direction throughout the session. All but one intraday timing window is likely to exceed its prior timing window’s extreme
SPX / ES premium Sudden changes and reversals in the spread between index futures and their underlying cash index value can forecast trend acceleration or change
Trend change Closing beyond the last relative extreme, and not retracing that break on the following session, signals the trend changing direction. At least one more close in that direction is required.
Trend change A confirmed trend change signal must produce at least a third close in the trend change’s direction, unless the trend change signal’s session is retraced entirely
Up/Down-crash The setup begins when 10-11 consecutive trending sessions have been interrupted only by 1-2 non-consecutive sessions that do not close at a new trend extreme. The trend becomes likely either to reverse suddenly, sharply and substantially, or to extend the trend at a much steeper pace
V bottom/top Immediately reversing from a new trend extreme tends to be revisited eventually
WedEX Big money tends to adjust positions during peak liquidity, which is by Wednesday’s close before Friday’s expiration. Comparing its close and intraday timing windows to recent price patterns can reveal an active or passive bias likely to influence Friday afternoon and Monday morning’s price action.