timwest

SPDR S&P500 ETF SPY MONTHY ANATOMY OF 2000- 2009 TIME FRAME

AMEX:SPY   SPDR S&P 500
400 6 16
HISTORICAL OVERVIEW OF THE MONTHLY "TIME AT PRICE" TREND OVER THE 2000-2007 TIME FRAME:

This chart reveals the pattern of accumulation and distribution on a monthly time frame over the course of the bull and bear market cycles in the 2000's for the S&P500             .

Note how previous modes are important levels into the future, even several years down the road. The market has memory and that may be because technicians like us look at charts and act at old levels.

However it happens, this is a mechanical way to stay on the trend for as long as possible.

Nothing is perfect, but just a few rules and common sense allow for trends to be captured.

1. A trend must have a new high every 5 bars.
2. If the price action             is completely above the mode, the trend is in place for the amount of time at the previous mode.
3. If no new high after 5 bars, then a downtrend may have started at the high.
4. The downtrend is in effect if the price is below the mode since the high.
5. Continue the downtrend as long as a new low is made every 5 bars.
6. Exit the trade if the amount of time at the mode expires. Count 1 as the first bar completely below the mode.

Please review my other charts for further clarification.

Best regards,

Tim 3/28/2014 12:04AM EST
Subscribe to my indicator package KEY HIDDEN LEVELS $20/mo or a discount for a year and join in the trading room KEY HIDDEN LEVELS here at TradingView.com
Nice chart
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Thanks khboker
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I read some information and maybe you can confirm my understanding of "3. If no new high after 5 bars, then a downtrend may have started at the high." you are checking if the next one after the 5 or the last one ends higher or lower the line?
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I could have made it more clear. In #1 the trend is an UPtrend. So, in order to be an uptrend, the price has to be making a new high every 5 bars (on whatever time frame you are on). If you see that the market hasn't made a new high for the UPtrend, then mark a BIG RED DOWN ARROW at the highest high (now 6 bars ago) and look for what price represents the "most frequent price" since the high. That "most frequent price" is your control point for the downtrend. Does that make more sense?
+1 Reply
Prices repeat over time. Very well explained. Thank you.
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You are welcome Madrid. If you see any interesting trends setting up, feel free to share with everyone.
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