Sunday, May 19, 2024

Median Line Evaluation – The Market’s Compass Technical View

On this version of Median Line Evaluation, A.Ok.A. Andrews Pitchfork, Half #4, Additional Strategies, I’ll share additional methods and strategies utilizing Pitchforks that had been launched on my own and my collaborator Kyle Crystal of Lakeshore Technical Evaluation that had been launched in our STA White Paper about Median Line Evaluation / Andrews Pitchfork. These embrace what we’ve got coined as “Mixture Pitchforks” and “Dueling Pitchforks” which when mixed create a assist and resistance frequency grid in value and time.

Mixture Pitchforks:

The primary instance of the writer’s analytical technique of diagonal discovery is by utilizing what we discuss with as “Mixture Pitchforks”. Within the left panel above, I’ve utilized a Schiff Adjusted Pitchfork (labeled “a”) to the every day chart of the Aerospace & Protection ETF (ITA) utilizing three pivots; the low at POa, to the excessive at P1a, and better low at P2a. The panel to the proper provides a second Schiff adjusted pitchfork (labeled “b”) using the three pivots that comply with; drawn as soon as once more from a low at POb, to the excessive at P1b, after which to the low at P2b. Dashed warning traces are then added exterior pitchfork “b”. The reversal on the higher warning line of the second pitchfork at R1 and reversal two and a half weeks later on the higher parallel at R2 signifies I’ve recognized the right value/time grid. Now observe that each pitchforks, drawn from completely different pivots, are forming the very same angle. That is affirmation that I’ve found the dominant frequency inside this market’s value/time grid. Going ahead, an analyst can proceed to make the most of this frequency technique. How so? See beneath.

Dueling Pitchforks:

Upon affirmation of a market’s dominant frequencies, a technician can take his or her evaluation one step additional by using what we discuss with as “Dueling Pitchforks”. This method makes use of two pitchforks (one bearish, one bullish) to kind the worth/time grid. Within the panel above left we’ve got drawn a Schiff Adjusted Pitchfork on an hourly NASDAQ 100 Index chart from the excessive at PO (in yellow), to the low at P1, then to the decrease excessive at P2. I then have added a number of warning traces. Notice these warning traces have been revered by value. On the panel to the proper I’ve added a Normal Pitchfork (in pink) to the identical chart ranging from the low at PO, to the excessive at P1, then to the upper low pivot level P2, and equally, have added a number of warning traces. These two pitchforks, working from a bear and bull perspective, work to disclose the worth/time grid appearing as diagonal resistance and assist.

The chart above of the Day by day E-Mini Lively Contract serves as one other instance of Dueling Pitchforks however makes use of three pitchforks to create the worth/time grid. The primary pitchfork is a Schiff Modified Pitchfork drawn in inexperienced from the late February excessive at PO, all the way down to the April low at P1 and as much as the decrease excessive at P2. The second originates on the similar April swing low at PO and is drawn in blue as much as the swing excessive at P1 and terminates at P2. That is additionally Schiff Modified, and for readability functions we’ve got shade coded it blue. The third is a Normal Pitchfork (in pink) drawn from the following swing low at PO, to the next excessive at P1 after which all the way down to the next low P2. This completes the grid.

Current value motion means that the worth/time grid is starting to alter. That is revealed within the following information factors: Value has violated earlier resistance now assist on the higher warning line in blue, UWL1, and assist on the decrease parallel LP1, in pink, has flipped to resistance. Each of those developments counsel that the “value unit” or leg up since PO could have reached its terminus. What can be the suitable subsequent step on this evaluation given the violation? Add warning traces to the usual pitchfork in pink.

Within the subsequent Median Line Evaluation, A.Ok.A. Andrews Pitchfork, Half #5, Pitchforks with Momentum Oscillators, I’ll share additional methods and strategies utilizing Pitchforks. I will even share two actual time “walk-throughs”

Charts are courtesy of Optuma whose charting software program allows customers to use, regulate and modify Pitchfork variations and related instruments within the above charts at a click on of the mouse. To obtain a 30-day trial of Optuma charting software program go to

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