Why Reached and Invalidated Projections Still Matter

A projection being reached or invalidated doesn't necessarily mean it has lost its value. In fact, some of the most interesting levels can come from projections that are technically no longer active.

This is particularly relevant when short-term market fluctuations cause a projection to be invalidated, even though the underlying cycle structure remains intact. The following examples illustrate why it can be worthwhile to keep an eye on these levels, rather than simply discarding them.

Example 1: Minimum requirement to be reached is the start of a projection. Yet the end is not just an arbitrary level

Example 2: Using end of projections level

The far ends of projection ranges are not targets in the same sense as the starting levels. I consider them relevant only when price approaches them, as potential resistance or reversal points. 

Example 3: Even invalidated projections provide important references

Projection X is a particular good example. The first crossing (a) with the continuum, was the "proper" one, coming from a cycle low (b). It got invalidated (because of normal market fluctuations) at c. 

At d, a new upside generation was generated, but based on the new lowest low (e) since the downside crossing.

That new projection is one of the less useful ones, because it is basically reached before it was confirmed. But the original projection from that cycle, while by now invalidated, provides the proper levels (f). This behaviour comes from applying mathematical models to real-world market data, which is inherently noisy and does not always conform to the clean, idealized structures assumed by the models.

Projection Y is another example where the noise is even clearer.

Example 4: Invalidated 40-week cycle (20-week & daily 96.8/110.6 offsets) projection in @ES

Example 5: Invalidated 5-week cycle projections on @NQ

The statistics for this would look quite miserable, but... 

Writer: Steffen (tradeatomy.com)

Position disclosure: As of the publication time stated, I have the following direct or indirect financial interests in the markets or instruments discussed in this analysis:
Long: -
Short: -

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