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Hi, In this video around 30 min, Al mentions about good context, wedge pushes, climaxes etc. I understand that, but I also see body gaps in pullbacks. Doesn't that mean show of strength by Bears? Al says if bull or bears are strong, one should ignore wedge tops/bottom. Not sure If I am missing anything? Thanks!
Doesn't that mean show of strength by Bears?
No single bit of PA alone usually capture the sentiment so you have to analyze the full picture and decide if you are most likely in a bear leg in a TR or in a bear trend.
You can have gaps, or any other piece of PA information, in either of them. The whole is that counts. The PA in slide 21 is clearly TR PA so when you see three pushes down you start looking for reversals at support. There are body gaps but, as I said, you can see in the wedges videos (parabolic wedges have big gaps) or in the encyclopedia that this is rather usual. In this case, you also have many tails, bad FT after bear BOs, the bulls making money below bars and prior lows and the pushes down are consecutive climaxes so you need to find supports where the MKT could try to reverse and wait for the setup. In this particular slide with bad SB for the bulls and the tightness of the bear channel, a minor reversal is more likely, continuing the TR.
Al says if bull or bears are strong, one should ignore wedge tops/bottom
Had the MKT been in a bear trend, yes, wedges would probably fail and become bear flags.
Thanks for the clarification!
