BarroMetrics Views: What is a RePo and 313Outside?
Following my weekly video, I was receiving quite a few e-mails asking what these setups were.
Both are similar forms of Negative Development. The essential conditions are:
- A trending market in the Higher Timeframe (e.g. the 18 day swing)
- A correction in the First Lower Timeframe that breaches previous support (in an uptrend; resistance in a downtrend) and the market fails to continue follow through with the breakout. And
- The market returns to the corrective range.
Let’s look at an example. In Figure 1 we have a chart of QM (Crude Oil; CSI Perpetual Series). We see a congestion pattern where C is greater than 67% of AB (ideal is 78.6% or more). So, we have a 313 (Steidlmayer’s term for a Sideways Market). We have the ‘Outside’ setup when:
- We move outside the congestion boundaries but
- Without accepting beyond the Maximum Extension (as in Figure 1),
- We see re-acceptance back into congestion (in Figure 1 above the Primary Buy Zone).
The difference between a 313 and a RePo lies in the magnitude of the retracement by C of AB. In a RePo (Re-penetration), the retracement by C is between 61.8% and 50% of AB. In Elliott Terms the RePo occurs whenever we have a Zig-zag correction. I borrowed the term ‘RePo’ from Joseph Hart of Trend Dynamics.
Figure 1 QM RePo
Refer this blog post to a friend or colleague…
