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In the land of the gaps......
01-15-2012, 06:46 AM (This post was last modified: 01-15-2012 07:08 AM by theoryman.)
Post: #1
In the land of the gaps......
It seems to me that the problem arises because the waves are being thought of as continuous but the data being used to plot them is discrete.

Not only is it a problem arising as the Market opens and closes but it also happens within some days, e.g. when data is released when the Market is open.

What happened with the S&P count is a good example of the former and the problem area shows up well on any Market open count.

On reflection I think there could be another significant problem area which wouldn't show up on any such chart.

It's when the Market closes and then reopens the next day at the same Price i.e. when there is no gap!

That would give an impression of continuity but in no way reflects what might might have happened had the Market actually been open. There are such occasions when the Futures and SB data shows massive swings back and forth when the Market is closed.

We used to think that light waves were continuous and then Planck came along and the Einstein took it a stage further.

What if markets really do not move in continuous waves, even though they might seem to do so; when we use our present methods of observation?

What if they move in independent chunks but each chunk has those wave properties within it?

Instead of trying to force those independent chunks together to make a big picture, why not accept each one for what it is i.e. an opportunity to use the wave properties until it no longer makes sense to do so?

So how does that relate to gaps? You only use the data after the gap and run with it and let the wave pattern reveal itself from there.

Each chunk can exist for whatever time is needed but at some stage it will end without warning and another will appear. Sometimes they will join seamlessly other times they won't. The seamless ones would then be the potentially misleading ones because they look to be something that they aren't. The start of one just happens to tag onto the end of another but without the wave carrying on across the join.

This has been simmering away in the back of my mind for several months now. Most people, if not all, might think that was the best place for it but I am on a creative roll at the moment, so here goes.......

Cheers theory
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01-15-2012, 09:42 PM
Post: #2
RE: In the land of the gaps......
To weigh in on the concepts, I think not so much of the waves being
continuous (because the indices reflect composites of individual
stock issues which have their open market times for trading).

I think of the sentiment behind price estimatation driving buy/sell
orders as something which IS continuous and not bound by market
open or close times.

Just thinkng about the market maker function of matching orders
(for the individual issues) as they prepare for the open gives me an
impression of lost data.


TS Hennessy
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