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Poor or Unsecured Highs or Lows

The document discusses different types of market movements and endings to auctions: 1) Auctions most commonly end through aggressive counter auctions that create buying or selling tails, or through exhaustion where momentum is lost until turning around. Exhaustion endings provide less information. 2) A pullback low/rally high refers to a late afternoon price movement against the prevailing trend on a trend day, representing an inventory adjustment. The following day determines if this level is violated, indicating a change in trend. 3) Range extensions and repairs refer to price probes outside an established range by more aggressive participants, and areas of a price chart that need correction to restore symmetry.

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71 views

Poor or Unsecured Highs or Lows

The document discusses different types of market movements and endings to auctions: 1) Auctions most commonly end through aggressive counter auctions that create buying or selling tails, or through exhaustion where momentum is lost until turning around. Exhaustion endings provide less information. 2) A pullback low/rally high refers to a late afternoon price movement against the prevailing trend on a trend day, representing an inventory adjustment. The following day determines if this level is violated, indicating a change in trend. 3) Range extensions and repairs refer to price probes outside an established range by more aggressive participants, and areas of a price chart that need correction to restore symmetry.

Uploaded by

jadie ali
Copyright
© © All Rights Reserved
Available Formats
Download as RTF, PDF, TXT or read online on Scribd
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Poor or Unsecured Highs or Lows

Auctions, within the market’s natural two-way auction process, end in one of two ways:
1) Most commonly the auction ends through a more aggressive counter auction that
creates a buying or selling tail; or 2) The auction ends through simple exhaustion.
Exhaustion is similar to running up a steep hill and continuing to lose pace or
momentum until we just stop and begin to slowly turn around and gradually walk back
down the hill. The only thing that stopped us was the loss of our own momentum. By
far the most reliable and information packed ending is through aggressive counter
action. We refer to an auction that terminated through exhaustion as poor or
unsecured because of the lack of counter action; the original auction, after getting a
rest, is more likely to make another attempt to crest the hill. The more attempts that
are made, the more likely the auction will finally succeed. Poor highs or lows are often
the result of excessively long inventory (with regard to poor highs) or excessively short
inventory (with regard to poor lows). These inventory imbalances often involve longer-
timeframes and therefore take time to balance before continuing in the direction of the
prevailing trend.

Pullback Low/ Rally High

Applicable to trend days and is a late afternoon price migration against the prevailing
trend. During a trend day there is usually one afternoon inventory adjustment; the
pullback high or low is the extreme of this inventory adjustment. On the following day
the pullback high or low is used to determine if there has been any meaningful change
relative to the previous day; if the pullback high or low is not violated, there has been
no meaningful change in the opposite direction of the prior day’s trend.

Rally High/ Pullback Low


Applicable to trend days and is a late afternoon price migration against the prevailing
trend. During a trend day there is usually one afternoon inventory adjustment; the
pullback high or low is the extreme of this inventory adjustment. On the following day
the pullback high or low is used to determine if there has been any meaningful change
relative to the previous day; if the pullback high or low is not violated, there has been
no meaningful change in the opposite direction of the prior day’s trend.

Range extension

A price probe outside of the established range that indicates that more aggressive
participants have entered the auction.

Repair

We employ the word "repair" when we see an area of the profile or a specific anomaly
that doesn’t contribute to the symmetry of the Profile that we are accustomed to
seeing. For example; in the attached examples form the E-Mini, the 5 anomalies, that
are labeled, are repaired as the Profile on the far left trades back down through the
anomalies.
See example: 

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