Tick extremes that confirm double tops and bottoms

Why two prints are required

Intraday exchange tick readings were used to locate industrial-average turning points and to form buy or sell hypotheses lasting from one to ten days. The tick-index is the count of issues whose last print was higher than the prior print minus the count whose last print was lower. A tape with 500 upticks and 250 downticks therefore prints +250.

Editorial reading: market-breadth is used here as a crowd-position signal rather than a substitute for the price pattern. A double-top-bottom is only a working hypothesis when the same volume-scaled extreme-tick appears at both tests, so the second print, not the first crowd surge, is what you can time and later falsify.

Buy and sell hypotheses

A double-top-bottom is two tests of the same high or low, on the same session or within ten trading days, each tagged by an extreme-tick. The two tests of the same high or low could print on the same session or as far as ten trading days apart.

A sell hypothesis required a double high with an extreme positive tick print at each high, and the second extreme positive print was the trigger. A buy hypothesis required a double low with an extreme negative tick print at each low, and the second extreme negative print was the trigger.

How volume-confirmation sets the extreme

A tick print was judged extreme only relative to that session's volume: a busier tape required a larger net tick reading. The method treated a more extreme tick reading relative to volume as marking a more crowded one-way consensus and therefore a more important subsequent reversal hypothesis.

Editorial reading: volume-confirmation raises or lowers the extreme threshold with traded volume so a busy session is not misread as crowded on a modest tick print.

A documented pair of lows

One documented pair of lows used 890 downticks near 2470 on 191 million shares, then 880 downticks near 2465 on 121 million shares, with the second extreme treated as the buy trigger.

Editorial reading: the first extreme-tick mapped the low. The second-print-trigger is what started the buy hypothesis.

The working chart

The working chart stacked a daily industrial-average bar series above a companion series of each session's high-to-low tick-index range.

Editorial reading: the price pane shows the two tests of the same high or low. The tick-index range pane shows whether each test carried an extreme-tick.