It's all a question of experience, recognition and expectation. Experience tells me that the Dow travels between limits in channels on the 10 min chart.Last night I speculated on the likely new channel ( experience). Recognising that there had been 4 slope changes tells me that there is little more in the way of down to come.Certainly nothing dramatic. That eases the decision to go long, minimising the potential drawdown.Expectation that the rot would stop at the "projected" channel support line. I said this was at 380. OK It went to 368. That was the low. The close on that 10 min period was 386.
J40. The PD that you refer to is not correct in its form. Whilst I have seen variations in ND tops, PD bottoms are more exact( except at the open where they can seem to be never ending). The price trend line is taken on support, and always slopes down.The troughs are pretty well aligned. The RSI slope is gently trending upwards, allowing room for the price to reverse and break.
TS called it correctly by recognising the probable "V" bottom. The risk is minimal as reasoned above.
Hooya I'm not saying it's a "significant bottom, just a channel support reversal. This new down channel may well continue and we should not be looking for anything other than a new down trend at this time. On this thread, we're only interested in yesterday's action so that we can do our homework ( finding S/R levels) and today's tradable action. Tomorrow's action is for someone else to predict.
So far today, the failure to recover 432 is bad news. Failure to recover to 450 is worse, in that the wave count down is now not violated, leaving room for more down.
I have said many times before, the Divergences I have shown, are only valid for getting out at a tops or bottoms- again intraday. They DO NOT mean you can reverse your trade.
Trading the Dow, for a newcomer , is no different to trading anything else. If you jump in, make sure you check your parachute! I admit, intuition plays its part too. The chart is not going to jump out at you and say "Buy Me". Or is it? :cheesy: