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2017issue C087

Nine-zone filter for decade-level breakouts

The nine-zone filter marks the last dollar under each decade print on a ninety-day-daily-candles chart, withholds entries still inside that band, and treats half-dollar-clearance above decade-resistance as the delayed breakout confirmation.

  • Mark nine-zones first on a ninety-day-daily-candles chart for names priced 20 to 70, then withhold entries whose whole-dollar print contains the digit 9, including 19, 29, 39, and 49.
  • Treat each 10-dollar increment as decade-resistance that can stall upward continuation, and treat prices still in a nine-zone as prone to pullback or congestion.
  • Call breakout confirmation only after half-dollar-clearance of at least 0.50 above the decade print, such as 30.50 or 40.50 rather than 29.40 or 39.60.
  • A false-breakout is a chart pattern that fails to continue after the entry condition has already been taken, and declining volume near a prior resistance area is a commonly recognized warning.
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Current trackCandlestick patterns100 readingsSupport and resistance170 readingsBreakout confirmation172 readings

Nine-zone construction

The nine-zone is the last dollar of a decade, where the whole-dollar print contains the digit 9 and is marked as unfinished structure. The nine-zone filter withholds entries at those prices, including 19, 29, 39, and 49.

Prices sitting in a nine-zone are described as prone to pullback or congestion before any further advance. Each 10-dollar increment is treated as decade-resistance, a whole-dollar multiple of ten treated as a clustered stall band for upside price action.

Marking window

The marking window specified for names priced 20 to 70 is a ninety-day-daily-candles chart. That window is a daily candlestick chart of 90 sessions on which the nine-zones are drawn first, so that nine-zones and decade-resistance are located before a swing entry is considered.

Half-dollar-clearance above decade-resistance

Breakout confirmation is constructed as half-dollar-clearance, a 0.50 move above a decade print used as the delayed breakout confirmation. The construction is illustrated with entries at 30.50 or 40.50 rather than 29.40 or 39.60.

When price is still trading between 29 and 30, the same construction waits for a break above 30.50.

Worked example

In the worked example, the band from 49 to 50 is left unused. The delayed long trigger is 50.50, which is the half-dollar-clearance above that decade print.

ATVI daily closes against the $50 decade line

Activision Blizzard spent most of March and April trapped in the last dollar under $50, the nine-zone this filter refuses to buy. A poke above $50 near 30 March failed and fell back into the band; durable strength only appeared after 24 April, once closes had cleared the round ten by about half a dollar and then trended toward $57. Closes were read from the candlestick bodies on the source ninety-day daily chart; the $49 and $50 guides match the printed avoid-band and decade line.
Activision Blizzard spent most of March and April trapped in the last dollar under $50, the nine-zone this filter refuses to buy. A poke above $50 near 30 March failed and fell back into the band; durable strength only appeared after 24 April, once closes had cleared the round ten by about half a dollar and then trended toward $57. Closes were read from the candlestick bodies on the source ninety-day daily chart; the $49 and $50 guides match the printed avoid-band and decade line.ATVI · 90-day daily candles · 2017-02-22T00:00:00.000Z to 2017-05-22T00:00:00.000Z

Closes digitized from candlestick bodies on the source raster and rounded to the nearest quarter-dollar. Wicks and opens were not transcribed. The source already drew a $50 guide line and a $49–$50 band.

False-breakout warning

A false-breakout is a chart pattern that fails to continue after the entry condition has already been taken. Declining volume near a prior resistance area is listed as a commonly recognized false-breakout warning.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
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All readings on this track · 54 readings
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  3. 1991Treat a candlestick reversal as incomplete until %D confirms it
  4. 1991Filtering candlestick signals with stochastic percent-D
  5. 1991Constructing compressed candlestick summaries
  6. 1993Intraday candlestick confirmation with oscillators
  7. 1993Candlestick hypotheses from a 1993 reading list
  8. 1994License candlestick signals with oscillators and weekly vetoes
  9. 1995Real-body support, resistance, and close-through breakouts
  10. 1997Weekly reversal as a three-part hypothesis
  11. 1998Turning fear levels into testable rules with a psychological matrix
  12. 2000Evaluating three-bar reversal reliability
  13. 2000Prior-day candles, open confirmation, and same-session stops
  14. 2000Intraday candlestick volume confirmation for daytrading
  15. 2001Count the key reversal up before coding a mechanical exit
  16. 2001Rising and falling three continuation candle construction
  17. 2002Treat a moving average as a contested fence
  18. 2003Candlestick signals need support and a risk-reward screen
  19. 2003Constructing one-day reversal tops and bottoms
  20. 2003Chart sentiment as a regime filter for hourly stochastic entries
  21. 2004Confirming index reversals with candlesticks, stochastics and averages
  22. 2004The harami inner close as a reversal barometer
  23. 2004Constructing a true-range volume power-shift filter
  24. 2005Weighing reversal clusters against moving-average support
  25. 2005Candlestick exits confirmed by overbought stochastics
  26. 2005Confirming piercing patterns with stochastics and moving averages
  27. 2006Candlestick cluster exits confirmed by overbought stochastics
  28. 2007Three black crows become a trade hypothesis only after regime, trend and nearby levels
  29. 2008Asymmetrical RSI lookbacks for divergence and candle confirmation
  30. 2008A permission checklist for the end of a trend
  31. 2010Mechanical entries still need confirmation gates
  32. 2010Crude oil as a case study in candlestick session reading
  33. 2010Gold weekly candles and the thousand resistance breakout
  34. 2010A three-layer gold chart drill from waves to candle confirmation
  35. 2011Why entry scans fail without trend filters
  36. 2011Price-zone oscillator trend-regime rules
  37. 2011A candlestick checklist before commodity entries
  38. 2013Step candle construction at price turning points
  39. 2013Two-bar step-candle construction
  40. 2014Small-range bars as a timed volume-climax hypothesis
  41. 2014Constructing volume-scaled candlestick charts
  42. 2015Weekly range midpoints as support and resistance
  43. 2015Constructing weekly body-midpoint pattern codes
  44. 2015Evaluating encoded candlestick sequence hypotheses
  45. 2015Constructing a breakout relative-strength index from two-day range candles
  46. 2016A three-gate classroom on hourly sterling
  47. 2016Fibonacci retracement as a pre-commitment stop map
  48. 2017Nine-zone filter for decade-level breakouts
  49. 2017Constructing pin-bar and inside-bar setups
  50. 2017Two-bar soldier and crow rules become a system only after filters and exits
  51. 2017Confirm a one-white-soldier or one-black-crow before entry
  52. 2018Session control from marubozu and engulfing geometry
  53. 2019Volume, acceleration, and candle filters on a completed double bottom
  54. 2019Sector-filtered candlestick scans and predrawn stops
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