Crunchies

In the trading room you will hear me refer to "Crunchies" from time to time. This is a not very creative word for areas where the market has spent some time and is therefore a possible level or resistance or support. I have never liked using the terms support or resistance in trading due to the expectation implied in their meaning. Therefore I choose "crunchy," which doesn't imply expectation and simply describes what has happened in the past. I drawn crunchy lines at points on a swing where at least 4 bars will be connected. I usually just use four myself. I do these in a look forward way not a look back way. Meaning I draw them as the market unfolds, therefore the exact level drawn will not always reflect the exact crunchiest level but its close enough. Here is an example of a chart before the line is drawn and after so you can get an idea. Initial Swing made.
	Crunchy line drawn through the point where it will touch four bars.
	Example of the return to a crunchy line. It is useful in adjusting targets or stops and also for playing divergences against in a range.
	When the market is in a range (often defined by me as times when the NYSE A-D remains between -600 & 600) then you will find several layers of crunchy lines drawn. You want to keep your charts clean and only draw the ones that are about as far as the "normal" swing distance on your time frame. That is something you determine in your homework and should know well before you ever pull the trigger. Draw your crunchy lines on your 30-minute/60-minute charts and/or daily charts to get a wider more significant view. Some of the best system signals will show up on tests of these crunchy levels. Waiting for those that line up while not fight divergence on the LTM is one of my favorite setups