Following up on my previous post regarding Stevenson Price & Time Targets, here are a couple charts I've been looking at:
Recently finished a Regular Cycle (RC) down. The overhead red line marks the PTT and the purple lines mark the Cycle Trend Line (CTL). Within these larger cycles, there are also smaller cycles at play (though we should dial down too far, or risk falling down the rabbit hole. Notice that both cycles have approximately the same number of bars in them. The previous Regular Cycle ended when price closed outside the CTL (ended up retracing towards it before continuing). The Inverted Cycle's PTT was overshot, but arrived right on time (this is either showing us strength or short covering, or a combination of both being that price was right on top of long-running support.
From here we look for a close outside the CTL to determine the end of the current Inverted Cycle (though we should prefer to wait for a retracement back to this CTL to gauge whether price wants to continue higher, or fall lower). The PTT of the Inverted Cycle is the most current red line on the chart, there is strong support above it though, and the slope of this down trend is beginning to flatten.
This stock finished the week, printing a Dark-Cloud Cover pattern, after filling a long-term gap. The daily chart shows the most recent end to an Inverted Cycle that actually hit the PTT early. The current PTT is drawn in red while the CTL is purple. There are two clear possibilities; (1) Continued downside, where we could target the PTT, and perhaps look to buy a bounce, or (2) Price makes an attempt to tag the CTL above, in which case I would be looking to sell this move.
The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at firstname.lastname@example.org
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