mikebiz

Interesting ADX pattern to watch for

TVC:USOIL   WTI CRUDE OIL
2 months ago
During the past several weeks, I've noticed something evolve in crude oil             on the daily ADX called a 'change in dominance'. This is where the ADX is above 20 and the +/-DMI swap dominance resulting is a 'V' type ending to a trend. The setup for the pattern was an ADX reading below 20 resulting in a consolidation in price. Then, price broke out and ADX began to move up. Then, without much of a pullback, price reversed and the -DMI crossed up over the +DMI causing the change in dominance. During this time, price was pulling back but the +DMI was still up so waiting for the two DMI's to cross would have resulted in missed trade.

Looking out across other markets now, I see a similar setup in Soybean Oil             (which I'm trading on short side). If this is a similar pattern, then two of the three steps have completed and this week should see price move down.

snapshot

DXY             is another market that could be setting up the same pattern. It will be interesting this week to see how this plays out. Should it work, it could be an interesting pattern to tuck away for future reference

snapshot

British Pound may be another candidate for this pattern.

snapshot
2 months ago
Comment: Another example of this in action using Treasury Bonds TYX:

[image]https://www.tradingview.com/x/82rNv7Vg/[/image]
Ronnee
2 months ago
Hi, so using your DMI , does this mean OIL should move back up and the others down? As they are about to cross and OIL is at the bottom,maybe to turn back up? Cheers Ron, have not used the DMI , interested to watch what happens, although with the election these movements may not be typical..cheers
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mikebiz PRO Ronnee
2 months ago
Hi - DMI is about trend direction while ADX is about trend strength. For crude oil, the trend is down as -DMI is rising and +DMI is falling and the ADX is rising which indicates the trend of record (down) is gaining strength.
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Ronnee mikebiz
2 months ago
So I was reading them back to front, thanks, to learn I will watch to see what happens. I have have brought the indicator down to see if it can help in my directions! Cheers and thanx Ron
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