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In slide 4, Al said only 4-5 bars down is not enough for MTR, however, in 22A Major and Minor Reversals he said bears usually need 5-10 bars to create enough selling pressure. How he defined enough selling pressure for MTR? Does 5-10 bars mean only for one leg down or leg down and up?
How he defined enough selling pressure for MTR?
In the first image, you can see a sequence of six consecutive bear bars closing below the EMA20. The final bear bar even created a gap between its price and the EMA. While the previous uptrend never broke the EMA20 and has only just breached the trendline, this currently only signals that bullish momentum is fading. With the appearance of a Moving Gap (MGP), you can expect bearish strength to build; however, there is often one final leg up before the market transitions into a trading range or begins a formal downtrend.
In the second image, every time the price breaks to a new low, it immediately pulls back to test the previous low, indicating a very weak bearish trend. In this environment, both bulls and bears can make money through scalping. The bars in the final leg down are significantly larger than the previous ones, suggesting a sell climax. This climax has evolved into a wedge and a double bottom, which now sets the stage for a potential MTR.
Does 5-10 bars mean only for one leg down or leg down and up?
It depends on the context. Ideally, for a strong setup, you want to see three or more consecutive bear bars closing on their lows, or a single bear bar significantly larger than the preceding ones—this increases the probability of a second leg down.
These are just my thoughts on the price action. Feel free to share your views—I'm happy to discuss this further!
