# Market Dynamics 2007



## Frank D (9 February 2007)

The same AMT model 'high-probability' pattern in 2005 and 
2006 has come along in 2007, and I will be following the exact 
same strategy as I have done in the past, I will be moving 
into 100% cash on all leverage positions probably next week,
 and remain in cash until the next alignment some months later.

 My long term trading stocks will remain held and I will add to 
them once again in the latter part of the year.









We can see price following the AMT model from resistance 
in the September-December level for a number of weeks @5468, 
and then the breakout in December 2006.

Whenever there is a breakout of ‘time’, the expectation is for 
price to move into the next timeframe that being the 
January-March 2007 extremes. 



*Frank Dilernia

Note:* Alignment in 2006 came after the bounce from 
the AMT model June lows and break back above the 3-month 50%
 levels in August.

1st January 2007 report below...

http://www.datafeeds.com.au/AMT1-1.pdf


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## Frank D (27 February 2007)

*DOW….*

This week on the DOW my main focus is too see how Wednesday closes because it is the last day of the month, which in turn sets up the new market dynamics for March 2007

At the beginning of the Trading year my view was for the markets to push higher towards February-March 2007.


Coming into the end of the month and the start of the new month, market dynamics based on the AMT model has shifted, and new levels are clearly defined ,and very important support levels are coming into play from the 1st March 2007

Price is coming down into major support. The DOW and most US markets haven’t tested their 3-month 50% levels. The Australian market tested these levels in the first week of January, bounced precisely and rallied towards the Jan-March Quarterly tops that were calculated at the start of the year. 


If the US market's are going to continue with the Trend then these 50% levels have to hold this week and next and bounce.

 The worrying thing is the 3-month divergence at the top for March, the MARCH high is currently showing a lower dynamic high, and this could be the first sign that change of trend is about to happen.


 This will only be confirmed by a close below the 3-week lows on Friday, but by Thursday, if price is trading below both support zones, then there is a good chance that the market will follow the AMT model back towards the March lows.


A two-month wave into April will take it back towards to the 3-Quarterly 50% level currently 11939. However that will depend on the close of March that sets up the dynamics for April






.............DOW Weekly chart left...............................DOW Daily chart Right



The model of expectation based on the AMT model is... whenever a change of trend occurs with the break of 3-month 50% level; it's the start a two-month wave towards the 3 monthly dynamic lows for each preceding month. The trend of any market or stock is simply define by trading the side of the dynamic monthly 50% levels.


It is the price action around these lows this week that's going to give the direction of the trend for March and April 2007.

If it does break and markets move lower, volatility will sure return and we should see some large trending days, ideal for day trading. However the bias will be to the downside.


*Frank Dilernia*


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## yogi-in-oz (27 February 2007)

.... it's good to see, that you are still around, Frank .... 

happy trading

  yogi


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## tech/a (27 February 2007)

Yes a true professional,with the best understanding/explanation capability of Cycle and Time analysis I've seen.

Always meaty stuff with great charts and explanation.


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## Frank D (28 February 2007)

1 day later and markets have broken their 3-week lows and headed straight towards the monthly dynamics lows in February. This push lower has shifted the March Dynamics, and it has gone to matching the overall pullback zone of 11939 on DOW.







..............DOW weekly chart....................................DOW daily chart


The exact March lows will be calculated at the close of the last days trading of February. 



Yesterday I was looking at AMT model, because of where price trading the expectation was a 2-month wave into April, but because this sell off is occurring in late February this is part of the first month, March is part of the 2nd month.

After that the focus will be on April 50% level, but regardless of what the market does, volatility is back and there are going to be some great range trading and day trading in global markets for a number of weeks.

*Frank Dilernia*


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## Frank D (22 March 2007)

_“The model of expectation based on the AMT model is... whenever a change of trend occurs with the break of 3-month 50% level; it's the start a two-month wave towards the 3 monthly dynamic lows for each preceding month. *The trend of any market or stock is SIMPLY define by trading the side of the dynamic monthly 50% levels.”**


*_*SPI…..










ES






ER2







DOW







AMT report 21st March 2007


www.datafeeds.com.au/AMT21-3.pdf

Frank Dilernia*


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## dodgers (22 March 2007)

Frank

I've been working through your AMT reports and am trying to make sense of them.

If you could explain to a layman - now that most markets have broken through the 3-month 50% level, you expect them to make higher highs from here? ...or head back to the 50% support level...?

Thanks in advance
dodgers


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## Frank D (23 March 2007)

First of all always look at your weekly bar chart and work down, think of a weekly chart as 1 bar, there are 5 days within 1 bar, if the market is going to reverse down its more than likely going to happen next week. (US markets)

The only expectation in the short term would be a reversal back into the 3-day lows, which hopefully would line up with the 3-month 50% level. (support)

A couple of things to look for, if the weekly charts close above the 3-month highs in March then you could find the market moving towards the new dynamic highs in April. (2-month wave into the next dynamic highs, the opposite of what has just occured), otherwise you can have the rest of the month consolidating as it hits resistance (March highs) until the end of March before the next up move in April.

Personally, I think if the market makes a higher high in April I would think the market will rotate back down in MAY, it wouldn’t surprise me to see a major consolidation for a couple of months before the next up trend begins later in the year.

It all depends what you want out of any analysis, if you are a medium term stock trade I think the bigger picture is extremely important. If you are a short-term day trader the bigger picture isn’t so, you just trade your set-ups and systems regardless of any preconceived idea.

Short-term

Normal price action within the weekly pattern will see one trending day, and 4 consolidating days or rotation days, even though the market looks to be making higher highs, you’ll find most days rotating within itself. The way I trade, (swing and momentum futures) I’ll miss every major move in the market because I have certain exit criteria, I’ll never hold for a 100 point move on the market but I’ll know over the next few days as the market rotates I’ll make up for any miss trending period.

Today on the US markets is an example of consolidating or rotating days after the trading day.


I hope this helps.

Frank Dilernia


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## dodgers (23 March 2007)

Thanks Frank thats very interesting

I'll get a copy of AMT to study this in more detail...


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## Frank D (7 April 2007)

_First of all always look at your weekly bar chart and work 
down, think of a weekly chart as 1 bar, there are 5 days within 
1 bar, if the market is going to reverse down its more than 
likely going to happen next week. (US markets)

The only expectation in the short term would be a reversal back 
into the 3-day lows, which hopefully would line up with the 
3-month 50% level. (Support)

A couple of things to look for, if the weekly charts close above 
the 3-month highs in March then you could find the market 
moving towards the new dynamic highs in April. (2-month wave 
into the next dynamic highs, the opposite of what has 
just occurred), *otherwise you can have the rest of the 
month consolidating as it hits resistance (March highs) until 
the end of March before the next up move in April.*_

*DOW...*






*ES...*






*ER2*






*SPI*







*Frank Dilernia

AMT Model and Methodology (c)*


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## Frank D (13 April 2007)

*Frank Dilernia*


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## >Apocalypto< (13 April 2007)

Truly incredible stuff,


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## tech/a (13 April 2007)

I'm not even in Frankee's league.

But I was interested to see his weekly target was within 3 pts of one of mine posted a week or so ago.


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## >Apocalypto< (13 April 2007)

tech/a said:


> I'm not even in Frankee's league.
> 
> But I was interested to see his weekly target was within 3 pts of one of mine posted a week or so ago.




That would add to your case TecH!

Read the ATM info on the site really interests me, so after I learn about Wave and Market profile and futher into Gann I will totally be into Market Dynamics, ATM. So looks like a have a busy 10-20 years infront of me better clear my calender. Aint trading grand!


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## >Apocalypto< (13 April 2007)

tech/a said:


> I'm not even in Frankee's league.
> 
> But I was interested to see his weekly target was within 3 pts of one of mine posted a week or so ago.




Tech,

Not 100% sure of what price the wave 5 section is exactly but..................

XJO closed at 6151 yesterday so you where pretty much on the money man well done.

Aussie200 xjo hit a hight of 6200 which lines up with the 5 at 6200 does your price need to be closed above or just hit?

I am thinking i have cocked it up


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## Frank D (14 April 2007)

I’m a firm believer the price patterns based on Market dynamics continually repeat themselves, this 2-month wave extension in April to *6236 was a high probability pattern.*

This zone is now a major resistance zone, it is also a price pattern that often repeats.

There are only 3 things a trader can do; trade *LONGS*, trade *SHORTS* or *STAY OUT.*

Using the *AMT model * I’ve eliminated 1 of those things, trading LONGS.

So now I’ve got two options, either *Stay Out * or trade *SHORTS.*

However….

On Monday my systems will go *LONG,* They won’t go SHORT until ‘higher’ prices on Tuesday.

So for Monday I’m now leaning to STAYing OUT because of two different expectations.


BUT….

Nothing is guaranteed when it comes to trading… there is no guarantee that 6232 is the high, there is no guarantee the market will reverse Down, and there is no guarantee the market will rise based on my systems, the only thing that works is following a method that has a probability of desired outcome that provides dollar rewards.

That is why I’ll be trading *LONG’s on Monday and following my systems regardless of any preconceived idea.*

I’ll be trading LONGs because over the course of a number of trades my trading has a desired outcome that provides dollar rewards. 

If I get stopped out and the market follows the AMT model down then so be it, I’ll move onto the next trade.

If the market moves higher on Monday, does 6232 provide resistance again?

It can, however….

Using sequential data, this 3-day pattern last occurred on the 19th February, the last time it rallied and took out the previous daily highs. If it does the exact same thing on Monday then based on previous price patterns the SPI can move towards 6250+ by Tuesday.

Now I’m not in the job of predicting the market, all I’m going to do on Monday is trade *Longs* and let the market run it’s course until the end of the day.

There are only two options left once in a trade, I either get *stopped out or make profits*

*Frank Dilernia*


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## Frank D (16 April 2007)

Switch to shorts on Tuesday. 

However if the market moves as high as the exit zone today and 
opens up higher on Tuesday (2650+), then I don't expect 
much downside, I hope I'm wrong but previous data suggests 
it's normally a stalling day without not much range.







*Frank Dilernia*


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## Uncle Festivus (16 April 2007)

It was a banks & resources day today. 

So I am guessing that this was our 'trading' day, with the XJO up 1.01%. An interesting phenomenon  I noticed at the close was the 5 banks all matched quit a bit lower at the auction from the days highs. I would assume that the bullish sentiment that was there during the day may have tempered a bit getting ready for some consolidating days or rotation days? 

I'm thinking that Fridays are usually orchestrated for lower values in both share prices & index's in preparation for a Monday ramp, as has been the pattern for a while. 

So should the 'fade' at the close be cause for concern or is it just me who views it this way ie as Frank alludes, a rotation day tomorrow?
Will the US markets take more notice of the worsening fundamentals and correct?


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## Frank D (17 April 2007)

Higher prices on Tuesday.

On open today I have conflicting systems, my daily system remains LONG my Range Bar systems go short.

Normally traders holding Long positions will Exit on higher prices and remain on the sidelines until the next day when systems align once again.

For short term traders they would focus on ‘shorts' but exit zones will be between 28-30 points of the range, exit and remain on the sidelines until the next day.

*AMT model....*

Because prices are now trading above the AMT model highs due to these higher prices on Tuesday, the resistance zones of last week can now become support zones for this week.


Frank Dilernia


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## Frank D (17 April 2007)

_"For short term traders they would focus on ‘shorts' but exit zones will
 be between 28-30 points of the range, exit and remain on the sidelines 
until the next day."_ (sycom high 6275 day 6247 low)

Now for a short term trader who has shorted the market today, we 
have moved down 28 points from highs and found a lot of support 
around these levels in early trading

Depending on your 'short' trade and entry price you would look to exit 
1 contract or all (6247) and then run stops above your entry price or 
above today's highs. (_system short traders would exit 1 and hold 
with stops above today's highs._

There is no guarantee that this is the low will be the low today, or
 sycom highs are the high, but the statisitical movement of the SPI 
during rising trends is 28-30 points so you want to be at least trying to 
work with that.






When markets breakout of  the monthly extremes, prices will try and 
move towards the next timeframe that being the weekly timeframe @ 6310,
 it just will probably be choppy for a couple of days as it tries and make it's way towards that level.

I have no idea how the market will behave but I favour and 2-day consolidation phase as the 3-day lows catch up, and most likely the 
next move higher will align with 'long' systems on Thursday.

*Frank Dilernia*


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## Frank D (17 April 2007)

Tuesday exit zone (if lucky) as part of the 2-day consolidation

*Frank Dilernia*


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## Frank D (17 April 2007)

Short term I’m looking for a 2-day stall/rotation, this lines up with an UP bias on Thursday following my systems. However, between now and Thursday the market can be anywhere, if it is still trading above the 3-month highs on Thursday then I favour a move to 6310, that won’t the case if by Thursday we are another 100 points lower and breaking the 3-day lows.

I never know how far any day will move. If I’m in a trade I ‘hope’ I don’t get stopped out and I ‘hope’ it reaches my exit zones. Everything in the market is random, there are no guarantees, other than following strict trading rules.

With all trends price has a natural flow that rotates between central zones and extends onward as Time moves forward. This relationship forms levels in the market that hinders Price from moving in straight lines, it moves between support and resistance. As Time moves forward support and resistance moves along with it. Knowing where support and resistance zones lie is a critical cog in the wheel of trading, because it’s these levels that become part of a trading plan. 

Support and resistance isn’t some static level in the market that never moves (as shown in the above chart) Support and resistance is dynamic, it constantly moves with the start of each new timeframe. Identifying and clearly defining support and resistance becomes part of my risk/reward strategy. Identifying good risk/reward trades does not guarantee success; however not identifying good risk/reward trades almost always guarantees failure.

Yesterday’s exits zones are an example and hopefully today’s exits zones (6193) are an example. But in reality I never know any outcome until after the event, so I don’t know if 6310 will reach, but by Thursday I should have a better idea.

This also reminds me of April 2006 when the DOW rallied into April highs before reversing, we are still 100 points short of those highs, whilst the ES has hit and stalled at the April highs yesterday.

*Frank Dilernia*


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## Frank D (18 April 2007)

*DOW* has rallied to the same dynamic spot as in 2006. 

 Back then the market sold off heavily once it was confirmed 
with the break of the 3-day lows, and the same applies in 2007.

 The first confirming change of short-term trend is the break of
 the 3-day lows.

After that the outcome is random,  but I’m looking for a
 2-week rotation back based on the 3-week cycles. (as per AMT report)

 2nd sign of any change of trend will be price trading below the
 3-week 50% levels, as of next week they are 12684.






The overall Trend remains strong whilst above the 3-month 
50% levels, so any reversal needs to be confirmed with certain 
levels in the market, starting with....

#1  3-day lows
#2   then precedding 3-weekly 50% level
#3   then preceeding 3-monthly 50% level

*ONLY* when there is a break and trading below the 3-month 50% 
level is there an expectation of a 2  month wave into lower dynamics.

We already had this happen in Feb-March (down) then the rally (March-April)

Nothing is confirmed until certain criteria is meet

*Frank Dilernia*


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## Frank D (18 April 2007)

Market has rallied towards the 3-week highs (day session 6301, 
24-hour session 6310)

The Daily system has now been long for 3 days and will go 
short tomorrow on open. 

Yesterday the daily and Range bar systems were conflicting but 
a trade was possible because the down arrow on the daily 
system matched the range bar shorts, however today there were
 no trades.

Ideally I would have liked the up move to happen from lower 
prices on Wednesday/Thursday and capture the move towards the
 3-week highs, however that didn't play out.






Tomorrow i'll be back into Short trading.

*Frank Dilernia*

*Note:* sometimes you'll see a slight variation in AMT model 
levels, but that will depend on whether i'm showing 24hour or 
day session only charts.

24 hour charts normally have greater levels because the
 ranges within 24-hour markets are greater than day only.


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## Frank D (19 April 2007)

With the lower open on SPI today, the daily systems remain long, the 
range bar systems will match with longs around the mid 6230's today.

I'll be trading longs.

*AMT model*: expectation is that the April highs continue to play 
some supporting role at this stage.





.................................................. SPI 24-hour


Past two days have consolidated and rotated, and with this lower open 
on Thursday this lines up with my previous view of trading longs
from Thursday towards the 3-week highs, and that's how i'll be treating 
the market today.

Short term cycle remains a BUY whilst trading above the 3-day lows (6191)



*In conclusion*: I I have been around for a long time, many here
 are familiar with the AMT model, others are probably looking at this for 
the first time.

My work is based on breaking up the timeframes in 3 periods starting from 
the higher timeframes whilst trading the shorter timeframes. I hope this 
past week clears a few things up with traders, as I have been getting a 
few messages of late regarding the AMT model.

Even though I think the AMT model is one of the most robust non-subjective 
trading methodologies discussed, I still need to trade using systems 
that confirms any trade entry; when to Long, short, stay out or hold 
equites for a number of months.

It is fine to call market tops and market bottoms and where the market 
is likely to go, but you still need verification on when to trade and 
what direction, not every trade is a winner but hopefully my odds 
are stacked in my favour each time I trade.

I don’t often post in forums that much anymore and I’ll take a break from 
this thread, but I hope this has helped some traders with a 
different perspective on technical analysis and trading.

*Frank Dilernia*


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## professor_frink (19 April 2007)

sorry to see you go Frank, hope the break isn't a permanent one. It's been interesting reading your analysis

Cheers


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## Edwood (19 April 2007)

echo your comments Prof - its good to see someone sharing such a structured, logical and objective approach on the boards Frank and I hope you continue to post from time to time

Ed


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## Frank D (19 April 2007)

UPdate: todays trade


Today's entry 6240  Stops placed 6210 (purple arrow)

A good sign would have seen the support zone around 6229 hold.

Regardless, Stops remain in place, the only time I would move stops is 
when there is a 23 point upswing from lows, I then move stops to 1 
tick below lows, because on most occassions if it takes out the lows 
after the upswing it will continue lower.






Late system short trigger yesterday after I posted the early chart 
@16:13

current system results in points 1=$25AUD






Add 90 points to the loss if stopped out @6210 (-$2250)

Same will apply if there is a 23 point upswing from any low today, 
stops moved in below lows 1 tick.

*Frank Dilernia*


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## Bronte (19 April 2007)

Thanks for the analysis Frank
This might help members....
Last two days SPI chart:


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## Frank D (19 April 2007)

Bronte,

What have you shown me? All you have shown is a chart going down, 
it means nothing if you don’t have a plan.

What’s the plan? Where are the trades? What’s the analysis? What are
 you going to do?

Trading is about meeting criteria when opportunities present themselves.

 A simple change in circumstances from Wednesday’s highs had me a 
*Seller *on Thursday at a higher open like the 3 previous ‘selling’ 
days, and I would had a great day today on the way down. 

Circumstances changed on a lower open today and I traded the plan and was stopped out.

Historically my systems since 1999 run around 70%. I have been lucky 
that over the past few years they are pushing the top end between 81-85%.

 I know when to stop trading these systems and switch into 
volatility systems below the 3-month 50% levels, and switch back when 
they are above. I think we have all been blessed with Bull markets over 
the years, and if this type of trading continues (trends above 
3-month dynamic 50% levels) I will continue to be blessed.


As I’ve mentioned in this thread previously….

_The way I trade, (swing and momentum futures) I’ll miss every major move in the market because I have certain exit criteria, I’ll never hold for a 100 point move on the market but I’ll know over the next few days as the market rotates I’ll make up for any miss trending period._

Today is just another one of days that I have missed on numerous
 occasions, and it won’t be the last, tomorrow is just another day.

*AMT model: *

As per  DOW  analysis.....

SPI  testing the 3-day lows @ 6191 (daily chart above) first sign is
 closure below today, 2nd confirmation is the break of the 3-week 50% 
levels next week.

A weak market will continue lower the rest of this week and 
open below the 3-week dynamic 50% levels next week, this will normally 
be confirmed with the DOW doing the same thing. (3-day break and 
moving lower)

*My systems however will remain long on Friday, and probably won’t 
go short until Monday, I’m hoping that I don’t miss a major move down 
and there is an up day tomorrow that matches higher prices on Monday.*

*Frank Dilernia*


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## tech/a (19 April 2007)

Frank
Is this analysis common to all instruments traded and in all timeframes?

Is that book of yours finished?
What software are you using for the plots?
Is it available for public use?


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## >Apocalypto< (19 April 2007)

Bronte said:


> Thanks for the analysis Frank
> This might help members....
> Last two days SPI chart:




Your off topic.:topic 

This section is for Market Dynamics charts and ATM and any other thing that goes with it.

Your chart belongs in Trading the SPI non Gann.

I also agree with Frank, what are you trying to tell us with that chart?


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## Edwood (19 April 2007)

sorry to butt but in depends on your view I guess IT - the chart is potentially off topic but it adds a different perspective to Franks, his being quite complex and showing a lot of info which is potentially confusing.  B's just shows good clean price action around gaps & 6,300 / 6,200 levels, with an impulsive move down.  no labels, no levels, just the action.  in that respect you could take what you want out of it.  I'm sure we could all see different ways to trade that chart - I can think of a few when I look at it


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## >Apocalypto< (19 April 2007)

Edwood said:


> sorry to butt but in depends on your view I guess IT - the chart is potentially off topic but it adds a different perspective to Franks, his being quite complex and showing a lot of info which is potentially confusing.  B's just shows good clean price action around gaps & 6,300 / 6,200 levels, with an impulsive move down.  no labels, no levels, just the action.  in that respect you could take what you want out of it.  I'm sure we could all see different ways to trade that chart - I can think of a few when I look at it




take your point but this is a topic about ATM and Market dynamics. 

it is just like me going in the SPI gann and posting a fundamental break down of spi market by economics what does it have to do with using Gann on the SPI?

i did not mean to sound so harsh, but in a topic like this i think it should stay focused on the analysis being presented by Frank

peace man


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## tech/a (19 April 2007)

Frank's shown *APPLICATION.*
Bronte's shown a chart.

*VAST difference.*


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## Edwood (19 April 2007)

sure Tech, can't dispute that - have to confess it did "got me thinking tho"


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## Frank D (19 April 2007)

Below are two charts of the DOW showing the AMT model hitting April 
highs and on the right showing the DOW moving in 100 points bars.

Each bar is 100 points, and each reversal occured after a 100 point 
reversal, and this is happening right at this moment. 







Today has seen the SPI break the 3-day lows, this is the first sign
 that markets are topping out, it would need to follow on the DOW 
and continue below the 3-week 50% levels next week

The SPI systems will remain LONG on open on Friday and probably won't
 go short until Monday, this will hopefully line up with shorts after a 
swing upwards after the 3-day change of cycle. Now that will only happen
 if the DOW moves upwards today.

 However when we look at the DOW each time it reversed 100 points 
it moved lower, this then favours the market heading lower, with the 
first confirmation and the break of the 3-day lows. Last major sell-off occured
when there was a monthly divergence at the highs, this time it's
 not happening.

If the DOW heads up tonight, then the swing target will be 100 points up
 @ 12866, after swing upwards you would need to see the market 
heading lower the next day.

Basically today, and or if it swings upwards tomorrow is critical on any
 down move.

I've taken shorts on the DOW @12812, I won't be trading shorts at this stage on the SPI, shorts will suit from higher prices on Monday, but I'd hate to think of missing any down move if it eventuates on the DOW today.

First step would need to see a follow through and break the 3-day
 lows followed by the 3-week 50% levels next week

____________________________________________________

Tech,

This AMT model is a generic model on all markets and stocks regardless 
of what you trade.

If you ever want a good entry on a stock position or define the trend of 
the stock using dynamic supports, use the past 3 quarters and use 
H+C+L/3 and use this level as your support. Each new quarter will 
move therefore support moves.

 Because it’s based on 3–quarterly timeframes your positions should be held 
6-9 months exit and repeat the process, so your focus is on the beginning
 of quarterly timeframes.

Whilst stocks are trading below these levels it’s probably best to
 concentrate on stocks above (trading longs)

In my opinion it’s best to scan for stocks coming down into those 
levels, finding support and then re-entering as it breaks the 3-day highs
 once again.

That is why I like the market to show a bit more volatility more often
 than just trend upwards, it allows price to move into support zones and 
then you just BUY and hold stocks, whilst concentrating on futures for 
short term rewards to pay for living expenses.

*Frank Dilernia*


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## Frank D (20 April 2007)

Stopped on DOW @12848 overnight -36 points

i'll use the same entry technique next time.

SPI longs as per yesterday average entry 6193






*Frank Dilernia*


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## Frank D (20 April 2007)

Tech,

this is an example of 3-quarterly dynamics.

I posted the below analysis on SEN in reefcap and here

SEN 

19th Feb 2007 

What traders need to see is...

_"The 3-week highs break again, and then for price to 
move back above the forward projected
3-quarterly 50% levels From 1st April March 2007. 

Expectation is then to move towards the highs in the 
following quarter from July-September 2007 (2-3 month rally)

The critical technical level using the AMT model is the
next quarterly dynamic 50% level starting in April 2007._


So basically I didn't want to know about SEN for another 6 weeks until
 the first of April 2007

What’s happened… 

Early April we have the first step, the break and weekly close
above the 3-week highs @ 26cents.

The next step on any bullish move is to see price trading above the 
50% level of 30 cents, this dynamic 50% level has clearly defined 
the strength of the trend within each timeframe.

A technical expectation would then see price move back towards
the highs where it hits resistance levels between 40-47 cents,
‘if’ it continues upwards.

A bullish price pattern would see a confirmed ‘monthly close’ 
above 47 cents, with a 6-month wave pattern extension towards 
.63 cents.

I would use the trailing 3-week lows as money management 
techniques, currently .21cents.







#1 Start of April and Timeframe
#2 First confirmation of 3-week break @ 26 cents

*#3 Price needs to break .30cents and then expectation this 50% level becomes a support zone.* Major critical level and technical break


#4 Price needs close above .40 cents at the end of a monthly timeframe. 

#5 Major resistance based on the past 3 quarterly timeframes @47

#6 Break of #5 and the wave pattern target is .63 cents over the course of the next 3-6 months.

#1 Trailing stop 3-week lows @ 21 cents.

*Note:* this is a purely speculative technical view using
the AMT model, there is no guarantee that any further 
advancement will take place or you will profit trading this stock.

We all know what has happened, SEN didn;t follow through and can easily
 go down to the next level over the next 3-months to .14cents. I don't
 want to know about SEN for another 3 months whilst 'it's trading below 
30 cents.


*This price action on SEN is easily duplicated on a number of 
stocks, ideal for small cap stocks and using the Quarterly 
and Monthly timeframes as trading set-ups. The premise of the AMT
 model isn't on price anaylsis, as most T/A is based on, it's based on Time
 analysis with price follow through.*

If you ever want to take margin positions on the large Caps especially 
Banks, imo it's best to wait until they test those levels as support and
 BUY and hold for 9-12 months and just keep repeating the process year 
in year out, whilst at the same time just accumualting long term holdings 
that you never sell.

*Remember this one....*

*AMP*

_02-07-2005 04:41 PM

“we are only 10 cents 
away from being back above the 50% level $6.64 and 
the secondary trend all of a sudden becomes 
our friend once again…I would like to see it move back above the
 50% level 6.64 and break the 3-week highs.”_


And on the 21st of July we can see this happening, a move back 
above the secondary cycle 50% level, a break of the 3-week highs 
and 6.64 becomes support. Because the market moves in 3-month 
waves the target within this quarter is $7.60.

 Of course the movement is not always a foregone conclusion 
towards the extreme but it is only a model of expectation based 
on market dynamics







And when we follow the movement of price into the next 
secondary cycle the same model of market dynamics comes into 
play, the 50% level defines the strength of the trend whilst we 
have a model of expectation that price will follow a similar 
path towards the dynamic highs within this quarter as show…$8.22






The shift in Time has dynamically moved the support of $6.64 in 
the last 3 months to $7.08 in this quarter and simply defines 
the strenght of the trend in this quarter.

 It is the movement of waves of Time that is the main component 
of the market and not waves of price that many believe. 

So any cross like show above you have an expectation that the minimum
wave will be based on 2-months and extented into two Quarters.


*Frank Dilernia.


AMT Market Dynamic Model  © Frank Dilernia*


----------



## >Apocalypto< (20 April 2007)

Frank D said:


> Tech,
> 
> this is an example of 3-quarterly dynamics.
> 
> ...




Frank

As usual I am speechless at what I am reading and seeing on your charts.

I am very slowly starting to see what your communicating though your charts.

Thanks for your posts.


----------



## Frank D (20 April 2007)

SPI....

Partial exit on longs @ 6235  (+42)

still long from average 6193

*Frank Dilernia*


----------



## tech/a (20 April 2007)

Frank.

I've not studied your method--but From what I gather you work in 3s
3 Yearly/quarterly/weekly/days/hrs/etc. Both the previous highs and the lows.
You then project forward or backward X (whats X?---A fib number?) and place a 50% line (from one level to the next) which needs to be achieved and held to verify the target--or more so the timeframe.

Comments?


----------



## Magdoran (20 April 2007)

Hello Frank,


I salute your ongoing efforts over the years to understand the market and devise effective ways to profit from it, and recognise the considerable effort you have taken to try to understand market dynamics, and your detailed work with technical analysis that addresses both price and time.

I’ve been following your posts both here and on RC for quite some time now, and I keep seeing comments using the term “Random” that sometimes appears to me to be contradictory, and either I am misreading the assigned meanings, or there is potentially an area of your thinking that may yield new perspectives if you address the flaws in some of the theoretical positions you are venturing.  I would appreciate your fleshing out of some issues I will address below to clarify your stance.

Firstly, I don’t agree that the markets are random as a blanket concept.  I certainly do agree with Mark Douglas’ “probabilistic” concepts that “There is a random distribution between wins and losses for any given set of variables that define and edge”, and that “Every moment in the market is unique”.  

Essentially Douglas’ rationale is that to “be the casino” involves the idea that if you enter every opportunity that fulfils your system criteria for an entry that there will be a random outcome, but overall should yield a positive expectancy.  

I suspect that this concept of random distribution of wins and losses is what you are trying to get across when you talk about markets being “random”.  Perhaps what you really mean is that every time your system identifies an entry, that you must establish rules that encompass a failure criteria in order to limit losses, as a component of your system, and as a corollary of building a positive expectancy.

However, if you are suggesting that markets overall are “random”, then I don’t agree at all with your perspective, certainly not from a technical analysis viewpoint since market patterns and some degree of predictability is the bulwark of what technical analysis is based on – that markets are not random, and that observable patterns have probabilities that can be estimated sufficiently to generate a positive expectancy.  In simple terms:  that people can look at charts and recognise a tradeable pattern that tends to yield an outcome sufficiently enough to consistently make money from trading it.

So when it comes to the “random walk” schools, or even the schools of thought that waves or cycles don’t exist, then I disagree.  I don’t believe markets are random at all.  Far from it, I believe they are much more ordered than most people think.  Consider chaos theory, and the inherent order that emanates from the seemingly random quantum world as a metaphor.  I think markets are similar, they can appear random, but if you widen your view a few degrees, there are patterns that repeat themselves (you even say this in post 16).

Where we agree is about assessing probabilities, and how markets unfold is not guaranteed – I’d describe this in Mark Douglas’ terms as “every moment in the market is unique”, and “anything can happen”.  Hence there is a degree of uncertainty in any technical analysis system since it is only dealing with information limited to the chart, which necessarily means that the information is finite, hence incomplete.  So, it seems likely that probabilities will necessarily fluctuate for a variety of reasons for a specific technical analysis pattern.

Secondly, I would argue that support and resistance may not be dynamic in the way you are describing it, (of course this depends on how you define support and resistance) since these concepts can be a lot more involved than using trend lines and horizontal lines from key pivot points, or price increments based on ranges between key pivot points. 

Sure, “price” is certainly dynamic, but the other key axis of “time” in market terms I would argue is not, although it probably is dynamic in a sense if you accept Einstein’s version of relativity, but this is an entirely different issue since the way we deal with time in markets means that it is not really effected significantly by relativity.  

Horizontal support and resistance levels are actually static based on pivot highs and lows, and the method of gradation within retracement ranges or extensions of these increments. But these levels are theoretical, and markets can move through these, or bounce on or near them.  What in effect a technical analyst I would argue is trying to do by setting horizontal levels of support and resistance is to estimate where the underlying is likely to change trend in a specified time frame in order to assign probabilities for entries and exits. 

As Mark Douglas says “anything can happen”, and “every moment in the market is unique”, but price levels can and do offer support and resistance in price in a fairly static manner.  What is dynamic is the price movement in these ranges, and time in essence is part of that dynamic process, so perhaps it is time in this context that should be factored into the equation (I know you claim to deal in time but this is unclear to me). 

To some extent I believe the concept of support and resistance can be extended to increments in time as well, and incorporated into a dynamic model, but it is dynamic in terms of price movement, not the horizontal levels once an effective criterion is established to determine these levels.

Cycles on the other hand may well be dynamic (and I think they are - but this too is a whole issue in itself that demands a much wider discussion), but this involves a consideration of the relationship of price and time.  What is constant in trading terms are increments in price and in time. Price moves in fixed price increments through time.

If you mean that as time progresses that the areas we are looking for support and resistance shift if a trend reversal has occurred I would agree with, since a new pivot point may yield new price increments.  But this is only dynamic in that the price action has revealed new ranges of support and resistance, but the earlier pivot points are still static.  

Major highs and lows seem to still offer support/resistance even years later.  Certainly they can be broken, but often an underlying will pull away from significant price points before breaking through them, and often this is where false breaks can occur, revealing a zone of support/resistance.  I think your model tends to reflect this, but if you see the horizontal levels as shifting, I suspect that your model is not reflecting the support and resistance in time and how it has an impact on the underlying, and for that matter pattern of trend, wave structure, and time cycles.

I think concepts like the pattern of trend and wave structure are vital to understanding markets in my view, but underpinning this is the key concept of counter trends.  I’m not sure how much you really grasp these foundations from your commentary which certainly recognises time as a key element, but in a way that doesn’t seem to suggest that analysis of pattern is central.

Hence your comments in post 25 about the shortcomings of calling tops and bottoms (which I would agree with), and essentially forecasting begs the question.  If you really have a grasp on how markets trend, why can you not project precise time and price points in the future, and call these in advance using the AMT model?

In addition, I would have thought the comment about markets being random is antithetical to the core concept of ordered market trends, patterns of trend, wave structure and counter trends. – I don’t logically see how you can believe in random markets in terms of the random walk schools and yet think you can make effective estimations of support and resistance into the future, essentially forecasting/predicting.  Can you clear this up for me please since on the face value this seems to be a contradictory stance?  

Also, concepts that I think have a bearing on explaining market behaviour are George Soros’ “Dynamic disequilibrium”, and “reflexivity”. This deals with the psychological disconnect with the market fundaments (reality if you will), and effectively explains the concept from the perspective that the market is always “WRONG”.  Soros is not from the random walk schools, and would certainly not see the market as “random” having profited from a range of market events such as the collapse of the REITs and shorting the UK sterling when German national imperatives drove their interest rate policy up forcing the UK currency down.  These events were not random.

Another example of market psychology in action would be the South Sea bubble around 1720, which illustrates key aspects of boom and bust, which I would argue are just as relevant today as they were then conceptually.  This kind of pattern is not random, and if you know what to look for, have key patterns that are repeated throughout market history, but this requires a detailed study of the way markets trend, and in particular the pattern of trend, and specifically the study of counter trends and market cycles.

I look forward to your clarification of your recent comments.  I hope this is food for thought from one time based trader to another.


Warm Regards


Magdoran


----------



## Frank D (20 April 2007)

Take the entire range of the past 3 periods, calculate the .618 of the 
range and apply .618 of the range either side of the dynamic 50% level.

Don't focus on anything below weekly patterns.

Daily you want to be working with 5 periods for day patterns, 5 day 
fits 
into the trading week (1 bar)

Ideal trading set-ups are looking at the AMT model, define it's trend based 
on either side of the 50% level, then focus on your weekly patterns.

For example, looking for weekly patterns that close on Friday lows and 
then looking for entries once the new week begins.

Most rallies or reversals begin as the new 'week'  begins, then
 the expectation is price will move in a 5 day pattern away from open, or
 1 weekly bar.

Post #8 in this thread gives more detail


*Magdoran,*

Someone already asked me this question in another thread  about 'Random' and this was my reply.....


_For example, say you had your system that has performed over the 
past few years @60%, so every time you entered a trade you expected 
to win 60% of the time, however the sequence of wins and losses 
are random.

You don’t know over 20 trades if your trades end up being; win/loss 
win/loss win/win, or you have 12 wins in a row followed by 8 losses. It is
 a random occurrence.

The only thing you do know is that if you follow your stop loss rules 
you should know that every time you get stopped out your loss is XX 
amount.

However, you won’t know how much your wins are going to be, even
 though your system runs at 60% you never know how much money you 
are going to make every time you trade. Again profits are a random 
outcome because exit zones might or might not be reached

Everything we do in the market falls under ‘randomness’

You trade with ‘probability’ i.e systems; an expectation to which something 
is likely to happen, or in some cases drawing conclusions about the
 likelihood of potential events occuring, but it’s characterized by 
randomness or uncertainty. More precisely, probability is used for 
modelling patterns under the same circumstances producing different 
results.

Random variables or in this case ‘price patterns’ then become a 
random expectations, it does not describe the actual outcome of 
the pattern, but rather describes the possible, 
as-yet-undetermined outcomes in terms of real numbers. 
(posted 17th April)_

It's not about market patterns it's about trading in real terms.

*Mag posts....*

_"Hence your comments in post 25 about the shortcomings of calling 
tops and bottoms (which I would agree with), and essentially
 forecasting begs the question. If you really have a grasp on how 
markets trend, why can you not project precise time and price points in 
the future, and call these in advance using the AMT model?"_

I though I already did this in this thread, did I not show you where the
 most likely movement in the market was going for 4 markets from 
March support lows into April highs. 

And regardless of any view, I want real numbers when trading not
 theory. AMT model is theory, it's what I do with the AMT model based 
on systems or trading set-ups that makes me money and protects my 
capital.

I'll be a keen observer if you want to start a geometry thread, start your 
own and getdown and dirty of what your going to be doing each day 
and how you are going to trade and how timing dates are part of the
 plan, stops etc. 

It's fine to have a model of expectation that between this 'DATE' and 
the next DATE, but it's what you do in between that i'm interested in. I'm 
always keen to learn new things that might help in my own trading. 
Anything that helps in 'filtering techniques' I'd be happy to learn.

BTW, I worked with geometry in the 90's, problem was it didn't give me 
those filtering techniques I wanted on a daily basis along with EW and MP.

I just hope this thread doesn't get hijacked  by 'disillusional theory' 
from others, there are other forums around that cater for discussions
 that turn into arguments about probability, trading and concepts.

*Frank Dilernia*

*SPI Update

Re-entered 6220  partial exit 6235

still long 6193 holding....*






*
Last post taking a break*....


----------



## Frank D (20 April 2007)

*SPI Update:

Re-entry 6219 Exit 6229*

still long from 6193 stops now moved to 6197 (+3)

AMT model 6236 providing resistance today.






*Frank Dilernia*


----------



## Magdoran (20 April 2007)

Frank D said:


> I just hope this thread doesn't get hijacked  by 'disillusional theory'
> from others, there are other forums around that cater for discussions
> that turn into arguments about probability, trading and concepts.



Hey Frank,


Let me say at the outset that I fully respect the developments you are making, and are supportive of your efforts.  The style I use is radically different to yours, and just so I’m very clear on this, I’m just interested in what you’re doing since certain posters hold your work in high esteem, and if you understand my personality, I am a seeker of knowledge, hence you have my curiosity (Yogi knows all about this too, I ask him some hard questions too sometimes… and sometimes I learn a lot from both what he says, and from what he doesn’t!).

What you say makes a lot of sense if you’re focus is for very short term trades, intraday, or for under a week.  I have a suspicion that there is a correlation with the count back lines that Coyotte was experimenting on past threads.  In fact I suspect that there may be a correlation with swing charts too in part of the logic, although you have obviously incorporated some clever proprietary systems/algorithms into your approach.

Also, to some extent there is a lot of “noise” in this time frame, hence I’d I agree, it can seem random at times.  I’d also agree about your observations of geometric styles.  I have found the geometric styles more suitable to longer term position/swing trading, hence you may be in a trade for 48 odd days sometimes.  However it is possible to pick precise points in time and price to trade briefly off support/resistance for very short trades at times, in specific situations. 


Now in regard to your forecasting you responded with the following comment:



Frank D said:


> I though I already did this in this thread, did I not show you where the most likely movement in the market was going for 4 markets from March support lows into April highs.




The answer for me is no, I only see entry and exit criteria as the price action pans out, not long term points in time and price well before the event from the perspective of the precision I am used to.  I just don’t see it.  I don’t see an exact price level and an exact time quoted.  Perhaps I’m just not getting it.  Hence my question.  (I’m not trying to be obtuse here, this is a genuine question).

I must agree with some of the other posters like “dodgers” that your charts are somewhat confusing, but that’s partly because I don’t fully understand what you’re doing here… but hey, that’s ok because what you are doing is quite involved, and I’m sure it’s valid, but just difficult for the uninitiated. 

Same goes for my style as well - People wonder what the hell I’m seeing too… I’m sure this has taken you years to figure out, easy if you’ve done the hard yards, not easy to see if you haven’t.  I must admit, I am struggling trying to decipher your chart, and I have tried to believe me.  Hence you may well have indicated valuable trading information, and I’ve missed it.  I have tried, but can’t see it, sorry.  Would love for you to spell it out, maybe I’m missing something really simple in your charts…

But let’s look at your post on the 27th of February 2007 – post 2 on this thread.  The commentary here is ambiguous.  Your analysis saw “50%” support coming in, but also noting that “this could be the first sign that change of trend is about to happen”, but the gist was you were waiting for an indication.

Then you said 







Frank D said:


> The model of expectation based on the AMT model is... whenever a change of trend occurs with the break of 3-month 50% level; it's the start a two-month wave towards the 3 monthly dynamic lows for each preceding month. The trend of any market or stock is simply define by trading the side of the dynamic monthly 50% levels.




I do not see any indication that you thought a top was in, or that a strong correction was imminent.  The following day after the major move down you then said:



Frank D said:


> Yesterday I was looking at AMT model, because of where price trading the expectation was a 2-month wave into April, but because this sell off is occurring in late February this is part of the first month, March is part of the 2nd month.




Your next post was on 22/03/2007 over a month later, hence I’m confused about where the prediction was here.  Would you accept that what was posted here only hinted at the possibility (maybe a 50/50 suspicion) of a change in trend on the 27/02/2007, but this was at best ambiguous?

Also, in your SPI chart the price action actually penetrates and closes below the 50% level on the 14th of March.  Wouldn’t this have signaled a short?  Same with the low on the 6th of March?  Or am I missing something? See the chart and quote below:



Frank D said:


> _“The model of expectation based on the AMT model is... whenever a change of trend occurs with the break of 3-month 50% level; it's the start a two-month wave towards the 3 monthly dynamic lows for each preceding month. *The trend of any market or stock is SIMPLY define by trading the side of the dynamic monthly 50% levels.”**
> 
> 
> *_SPI…..*
> ...



*


My other comments were on a broader technical analysis theoretical level in part about how support and resistance concepts work.  This is a highly theoretical discussion about the nature of how markets trend, and how effective analysis can be conducted which incorporates support and resistance concepts (of course it’s possible to consider a style where this hypothesis is negated…).  I am suggesting an alternative interpretation to your dynamic version of support and resistance.




Frank D said:



			I'll be a keen observer if you want to start a geometry thread, start your own and getdown and dirty of what your going to be doing each day and how you are going to trade and how timing dates are part of the plan, stops etc.
		
Click to expand...



Already doing this Frank in various technical threads for years.  Even you made some comments on my approach over on RC a few years ago, remember?  But that’s not why I commented.  I genuinely want to understand what you are doing, and how effective it is, that’s all.  I don’t expect to get the IP, that’s yours.  I like part of what you’ve demonstrated, but I’m struggling to understand the limitations and how you determine trades with your charts since I can’t really read them properly yet (I have read a lot of your AMT materials).  I figure if I don’t get it, maybe others don’t either.

Sorry if I seem to be giving you a hard time here, that’s not my intention.  But I am curious, and would appreciate your help to sort some of these questions out. 


Best Regards


Magdoran

P.S. I do hope you weren’t referring to me as being a person venturing a “disillusory theory” were you?  If you remember on RC you were quite rigorous with your questions on my approaches a couple of years back, but I think you were genuinely interested, as am I now.  Mag*


----------



## tech/a (20 April 2007)

Moggi can you enter in discussions on another sister thread.

Keeping this thread clear for Frank's commentary and charts.
Thanks
Appreciated.


----------



## wavepicker (20 April 2007)

tech/a said:


> Moggi can you enter in discussions on another sister thread.
> 
> Keeping this thread clear for Frank's commentary and charts.
> Thanks
> Appreciated.





That's fair enough request tech/a, but I feel Moggi has raised some valid points here too.  I too am interested in Franks methodology, would love see him elaborate a little on the basics his system so we can get a gist of understanding what Frank is trying to convey.

Cheers


----------



## Uncle Festivus (20 April 2007)

Tech/a can you enter in discussions on another sister thread.

Keeping this thread clear for all those who are also interested in Franks commentary and charts, and those who ask questions about them.

Thanks
Appreciated


----------



## Magdoran (20 April 2007)

Now why is it the second that you start to ask legitimate and specific questions about AMT, on topic, that the “cheerleader” who extols the virtue of AMT comes out saying to post comments on a “sister thread”?

What sister thread?  What are they afraid of?  A bit of scrutiny?

It is interesting to see a person who reserves the right for themselves to question others in detail in whatever circumstances they like suddenly decides to reverse this thinking when it suits them.  It’s also interesting to see someone promote a biased view and then attempt to silence any kind of in depth analysis that might be relevant to everyone else looking at an approach.  Does this not seem unreasonable?

Let’s see some consistency here.  It’s not Ok to have one rule for one poster and another for everyone else.  Also, why is asking detailed questions suddenly an anathema when the “cheerleader” does this all the time?

I’m just asking questions here for clarification, and in response to specific comments made on this thread, especially some that were quite pointed about forecasting.  If you’re going to raise these kinds of points on a thread, it’s fair enough for others to question those positions, wouldn’t you agree?



Magdoran


----------



## wayneL (20 April 2007)

Mod comment: As always, valid questions/debate on method is always welcomed at ASF. If a method is robust it will stand up to scrutiny as I'm certain the methods discussed herein will. 

As far as personal attacks; let's just not go there folks.

Thanks


----------



## tech/a (21 April 2007)

Magdoran said:


> Now why is it the second that you start to ask legitimate and specific questions about AMT, on topic, that the “cheerleader” who extols the virtue of AMT comes out saying to post comments on a “sister thread”?




To keep this thread "tidy" and easy to read.



> What sister thread?




The one you start.



> What are they afraid of?




Nothing



> A bit of scrutiny?




Search for understanding I thought.



> It is interesting to see a person who reserves the right for themselves to question others in detail in whatever circumstances they like suddenly decides to reverse this thinking when it suits them.  It’s also interesting to see someone promote a biased view and then attempt to silence any kind of in depth analysis that might be relevant to everyone else looking at an approach.  Does this not seem unreasonable?




Pointless ramblings---Just keep the thread clean.



> Let’s see some consistency here.  It’s not Ok to have one rule for one poster and another for everyone else.  Also, why is asking detailed questions suddenly an anathema when the “cheerleader” does this all the time?




Pointless ramblings---Just keep the thread clean



> I’m just asking questions here for clarification, and in response to specific comments made on this thread, especially some that were quite pointed about forecasting.  If you’re going to raise these kinds of points on a thread, it’s fair enough for others to question those positions, wouldn’t you agree?




Absolutely I have raised a few questions and observations myself. And will continue to do so.

*Ive started one up--was pretty easy.*


----------



## wayneL (21 April 2007)

tech/a said:


> Just keep the thread clean.


----------



## Frank D (21 April 2007)

*AMT model*

A generic Mathematical model applied to all stocks and 
derivatives. 

*Core Theory:* the rotation of price towards central 
zones (50%) and the extension of price as Time moves forward. 
Non-linear model and theory.


This model is designed to define probable ‘market paths’ and 
Market Risk by simply using a ‘model of expectation’ that 
whilst price is above or below the 50% there is a expectant 
path that price will follow based on weekly, monthly, Quarterly
 and Yearly timeframes.

*Model of expectations:*

Support and resistance moves with each new timeframe, what exists 
in one timeframe will not exist in the next.

Support and resistance as per defined by the AMT model is 
dynamic not static.

*Short term:*

If price falls under and closes below the 3-month 50% level based 
on the lower timeframe i.e weekly the expectation is it will 
follow a 2-month wave based on the AMT model.

A 2-month wave is NOT 60 days, it’s based on the higher 
timeframe (monthly),  the current month expected price move into 
the following month based on the AMT model and market dynamics.



*Apply AMT model.

Why?  * 

I want to define most probable paths on timeframes starting from
 the Primary into the daily.

When it comes to technical analysis the first plan is to
 always determine the Primary Trend and then consider the
 multiple higher timeframes. Without an understanding of this 
most will struggle. Without the concept of ‘Direction’ and 
‘Time’ you are guaranteed to fail, because Time effectively 
defines the dynamics of the market and allows us to have a 
better understanding of where Price is likely to go. 


Next part of the plan is combining both Time and Price, because 
with all trends price has a natural flow that rotates 
between central zones and extends onward as Time moves forward. 
This relationship forms levels in the market that hinders Price
 from moving in straight lines, it moves between support 
and resistance. As Time moves forward support and resistance moves 
along with it. Knowing where support and resistance zones lie is
 a critical cog in the wheel of trading, because it’s these 
levels that become part of our trading plan. The levels
 are now ‘probability patterns’ with a realistic expectation that 
the same pattern will repeat. 

*Probability* is the extent to which something is likely to 
happen, or in some cases used extensively in areas such 
as statistics and mathematics to draw conclusions about the 
likelihood of potential events occuring.

Probability theory is the mathematical study of 
phenomena characterized by randomness or uncertainty. 
More precisely, probability is used for modelling patterns under
 the same circumstances. Random variables or in this case 
‘price patterns’ then become a mathematical function that
 maps outcomes of random expectations, it does not describe 
the actual outcome of the pattern, but rather describes
 the possible, as-yet-undetermined outcomes in terms of
 real numbers.

*Apply AMT model on Weekly charts.*

Looking for Primary Dynamics based on Yearly timeframe (Yellow)
Looking for Secondary Dynamics based on Quarterly timeframe (green)

50% levels are major support zones, each new Quarter
 provides dynamic levels of probable paths that price can
 follow.





..............................................SPI Weekly chart

*Model of expectation:* whilst price is trading above the
 50% levels of both the Primary and the quarterly 50% levels 
then the expected path is for the market to move higher and 
follow the dynamic model higher.

*2nd part, apply AMT model to the weekly and Monthly timeframes.

*Same model of expectation exists in this timeframe.


*AMT model*: monthly dynamics (yellow)
                      Weekly dynamics  (green)                

Expectation Market is moving higher towards the Primary 
and Secondary dynamic highs in 2007

February: Trend strong until it breaks the 3-week lows  #1

Sell off occurs and sells into AMT model expected support 
for February and bounces #2 & 3

Expectation market will continue lower in the preceding month 
March (2-month wave)






March sells off hitting AMT model support once again  #4

Break of #5 and it follows the same pattern #6 #7 and #8

*As it continues with the Primary and Secondary trends much higher.*


What the AMT model has done is allowed me to have an expectation
 of where the market is moving within the Primary and 
secondary timeframes whilst defining the market using
 lower timeframes.

Just by this price action, recently the waves in Price have
 followed the AMT model precisely.  I don’t have to
 haphazardly guess the market, when it meets certain criteria I 
have an expectation that price follows market dynamics.


*SPI....*

SPI bounced off January 50% level and proceeded into a 2-month
 wave into February and we have sold off breaking the March
 50% level.

For those few days whilst price was below that 50% level then
 my expectation is to move down, however it didn’t, it bounced 
back above the 50% level became support and it has followed a 
two month wave upwards into April, which is following the 
Primary timeframe higher.







Each week (green boxes) I have probable weekly paths that is
 will follow, The resistance of this weeks highs won’t be there 
this week and can continue towards 6393 next week.

Above is the theory and a simple dynamic model based on TIME PRICE and MATH, that functions on probability not 100% guaranteed predictability.

AMT model is not about predictions; it’s about trading
 observed patterns under certain criteria.


Apply systems and I then increase my edge of knowing what to do
 on shorter timeframes, different trading strategies for 
different markets. I’m a buyer and holder of stocks, and I
 trade short-term derivatives.






Any time the market moves down based on LONG systems.  Ie 
Thursday  I know that there is a high probability that the next
 day will rally, Friday on the SPI is an example of this. If I 
take longs on close (Thursday) I’ll hedge a small parcel of Dow 
on shorts just in case the market does tank. 






*In conclusion:* I’m working with a Dynamic model using 
systems that provide expectation knowing that there is a 
probable path the market follows and trade accordingly with
 systems.

When I write a book called AMT for dummies, as Brent Penfold told
 me to call it, I’ll send it to you free of charge Magdoran
otherwise if you haven't read the book you'll never fully undersand 
the Model, methodology and theory.

*Frank Dilernia.*

*AMT model and Methodology (c) Frank Dilernia * 


*This thread is now over, because arguments have already started.*


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## barney (21 April 2007)

Hi Frank and congrats. on a very interesting thread. I for one would not like to see the thread finish ......... way too much educational stuff here just to terminate it because there is a little conjecture of opinion/ personality clash etc. 
The way I see it, all questions on this topic have been good questions, simply from the p.o.v. that the answers you have given have further explained the workings of your system ............. And that is essentially what the thread is about ............. I'm sure many others agree ............ so well done.


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## acouch (21 April 2007)

If you do not have Fibonacci Trader software, you will have a up hill battle trying to understand Frank's  Market Dynamics, and even then setting up Fib Trader  can be a mind bender.

have a great day
take care
ac


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