Market Strength

Relative Size matters (and probably the most above all)

When determining market strength on the chart at the front of us, bar size, especially size of the bar body is probably the first most important factor to consider. Bar size trumps everything, it is the first thing trader should look at. Note that when we talk about bar size, we are talking about relative size, for e.g. if the size of most recent two consecutive bear bars are significantly bigger than the past average 10 or 20 bars, it is sign of strong SP, unless the following bull bars become large enough that are comparable to the bear bears, traders should only look to short. Example: bar 10-11 on 20230404.

Bar size is especially important when you are looking for a reversal setup, traders want the signal bar and entry bar at least about the same size of average bars, if they are small, the reversal is more likely to fail. If they are bigger than average bar, especially when it is FBO of some MSR, the reversal is more likely to succeed.

On the other hand, if both bull bars and bear bars are big, comparable in size, that is sign of balance and market is neutral, traders will assume breakout to either direction will likely to fail.

In SPBLT

if a bar is big but has long tail, that is a sign of weakness in other setups, but when the market is trending, big bars with large tail is some early sign of strength.

Number of bars

3CCBLB vs 2CCBLB

Support. ➟ More about SP

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