4229

4149 4053

out herf ->

3989

3900 3B20 3740

3589

ST0C5""3"i

xK= 56 y: 56 D:1129 0=4091

H=4135 L=48B2 C=4095

Figure 60 On 1129, prices take out my stop shortly after the open. The weekly oscillator is sharply down and, of course, so is the daily oscillator. Since it is almost December, I decide to take my profits to the bank.

Figure 61

I kept an eye on Gold clear through to the end of the year. The weekly oscillator pointed down from 1129 all the way to 1229. 1 dont like to trade in December, but Ive shown the rest of the chart and the daily oscillator to that time in Figure 61. Im glad I didnt try to trade in that mess. But just for grins, I placed an envelope around the whole thing.

Range High = 4197 Lou = 3984 (Full Lim) Outer High-> 4247 lou = 3934 (Dotted Line)

Imiep High = 4166 Low = 4015 MldOut Hi = 4227 Lo = 3954 (Dashed)

Trading By The Booi< - Part IV CHAPTER 4

The Anatomy of a Maricet

[This is a market :j

Please study it carefully. What can be said about this market? What do you see in this market? What truth can be found in this single pictograph of a market?

Woutd you agree that it has a high? Would you atso agree that it has an open, a close, and a iow? If you do agree, then you aiso would have to agree that this market is in a trading range. Its trading in a range between the high and the low.

Isnt that true of alt markets? Every market in existence is in a trading range between the highest high and lowest low that it has ever experienced.

As depicted above, the market had an opening price and it had closing price. However, the open and the close were not necessarily precise. Instead, they represent a consensus of what the open was and what the close was.

Some sources report the first opening price, some report the second opening price. Some report both. By the time trading closes at the end of a day, the open may reflect a far different price than that which was shown originally at the start of trading.

The close is merely an opinion. The close may change drastically from where it was seen to exist at the end of trading to where the "officials" call it after the close of trading. I have stood in the wheat pit at the board of trade and seen and heard the last bid accomplished at $320.25. The tote board said $330.25. The close was called at $329.75, and that is what was reported.

Have you ever looked at the way they call the back months of a market? Do you wonder why the iow Is higher than the close, or the close is higher than the high? There is an explanation for those crazy figures, but I wont go into it here.

Although in the pictograph we seem to know where the high and the low were, we have no idea of how many trades (volume) were made at each of them, or if the mari<et ever transacted any trades at all at those levels.

We also dont know what the total volume was for this market, and we dont know what the Open Interest was either. At best they will be a guesstimate and will be available only after it is too late to do us much real good in our trading.

Yet these "truths" are a good part of what we have upon which to base a trading decision, should we choose to place an order in this market. Our decision, if we make it, can hardly be said to have been made on scientific evidence or hard facts.