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Slide 2: 60% chance of a MM down? I see a 2nd-leg trap.
We've had TR price action for 40 bars; market has been going down for almost 20 bars, and then there is a very strong 2nd leg. Is this not a classic 2nd-leg trap? Al says that there is now a 60% chance of a MM down, though.
Al explains in the next slides (by the way, the question is about video 40D): the bulls tried to trap the bears on the next bar tho it ended up as a doji, so the probability still favored the bears. Had it been a strong bull bar, bears would have exited and bulls had bought for a second leg trap.
The next bar was another doji so the probability for the bears went down and, not being enough to be holding at the bottom of a TR, they started to exit.
Oh, sorry for not providing the right video number, and thank you for finding the correct video!
My question was supposed to be specifically about the audio from 1:00 to 1:40. As soon as you see those two big bear bars, shouldn't you think "Second-leg trap in TR. Don't sell!" instead of "Probably measured move down. Sell!"?
It is Ok to be thinking long because you are at the bottom of a TR but after 3 decent bear bars, at least, a small second leg down will come, maybe more, so you need to watch closely the next bars because, of course, bulls will try to trap bears but until they don't, the MKT will go lower and you can't buy yet.
So bulls tried to create a strong bull reversal bar and they failed so still the second leg down was likely. On the next bar, they were able to create a bad looking micro DB but, being at the bottom of a TR, this was enough for making bears exit and bulls were eventually able to turn the MKT up.
For further reference, if you are subscribed, go to the encyclopedia's part 11 and see slide 238. There you can see the switching of probabilities from bear to bull.