Replies to post #312550 on SPDR S&P 500 (SPY)

[USDollar]

TT, while I agree with + like your concept, I just realized that I disagree with this side of it. This exchange of lines, this time, made me realize it.

Quote:
JK: "next level is cleared - do you have more above?"
TT: "Of course, as long as there is Market there are targets..."

Here's my common sense on this matter:

(circumstance) Price wiggles down.
In the process it builds and leaves behind/above resistance points (above this move) based on continuous breaking support that tries to form.
Your concept where we agree is that a move above such a resistance point should clear stops clustered logically there. Any move above a resistance point qualifies for that.

But there are 2 types of clearing, a valid and a fake one.
The valid is when the price clears, then resume the trend.
The fake (where I disagree) is when the price clears, but then do NOT resume the trend, but hangs around, typically ABOVE the resistance it supposedly just cleared. This shows that THAT resistance is in fact a support now - a technical valid concept.

Further more, based on this logic, the common sense dictates that there should be NO expectations of "more (resistance) targets" above this incident - as stops for the most part are typically moved (trailed) WITH the price advancement and typically the last resistance/clearing point is THE important clearing point (a max of 2 points if in proximity and cleared in the same day).

So the meat of stops is say at 298 level, so at 299 is barely few stops, so why the effort to clear that...

But the point is that after each clearing of resistance if the price then builds a support right there, then there should be no more expectations of clearing, no more "lines".

Now there is a thing unaddressed - the timeline. Trends and moves and legs are confined in a time frame. Each has their resistance chains to be cleared and if you go higher time frame (i.e. 15min vs 60min or daily) you have different cleaning expectations.

For example a stab above a resistance seen in daily will "clean" that resistance but will NOT destroy the resistance (and may only clean weak hands) if price CLOSE the day still bellow it.

But maybe I'm wrong and you base your concept on people that trade against the trend thus wrong trading and where they may place their "crops" of stops.

Just food for thought


Also, a "shaker" would be a final trend move before an invalid "clearing".