The Deviant Standard

Traders' preparation for volatile markets.

Browsing Posts tagged Elliott Wave Theory

Our 11:11 top call was a tad early, but the same technique found the actual top and both were good trades.  Only one was profitable, but both were good.  In today’s issue of The Deviant Standard (PDF) we have an exposition of the techniques that workd, an update on the additional downside we’ve been expecting and great setups to watch for the model portfolio tomorrow.

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Enough said?  Not convincing, but tradeable for my system.  Waiting for confirmation to load up the truck.

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So far, this late morning new high on idices is showing divergences.  We’ll look for an end to a five waves up (possible as an ending diagonal)  while maintaing those divergences so signal a possible turn.

Link to 3 min chart: http://screencast.com/t/MTQ2NjQwZDg

Link to 1 min chart: http://screencast.com/t/NmQ1ZTNlZmEt

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I have to admit, the prospect of entering multiple 3rd waves of different degree has me a little to eager to sell.  The trick is to be patient and wait for the market to tellus that wave (ii) is complete AND that wave (iii) has begun.  I may end up with palm prints on my behind, but that may but sitting on my hands may be what’s neccessary for today — or at least for the open.

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Figuring out when we might get our correction was the big rock in the road.  Now that it’s been moved out of the way, we can see the little rocks that block our path.  You know… trivial questions such as, how far the correction will go.  My limited thoughts on the subject in today’s issue of The Deviant Standard (PDF).

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Dow 9907 to  9917  has our first cluster of possible targets for the end of (ii) (if we’re not already done early at 9896.30).  If we blow by those targets, we’ll look for new ones.  9871 area remains a possibility at this time.

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We got our identifiable 5 waves down into [C] to complete b.  Despite being a slightly deeper retracement than expected, it ended right near a Fibonacci-proportioal relationship to [A] at 76.4%.  And virtually right on one of our FibGrid minor levels.  Even though the depth of the correction will give us some pause, our opperating asusmption remains.  As I write this, but after drawing the chart that accompanies these comments, price has turned down again.  Taking out the low where we’ve placed b would again put the count in jeopardy. 

If we continue to move up, we’ll look for a five wave structure that could help us figure out a turning point.  In the early going, we should keep our eyes on 9895, 9915, 9930, 9950, and 9970 (rough numbers).

[click image for larget view]

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[B] continued to push higher, but not beyond the end of a.  It also now shows a clear three waves up, bolstering our current view.  If [C]=[A] then we should see b end around 9845, roughly the 38% retracement of a.  [C] = 1.618[A] is at 9815 nearby the 61.8% retracement of a, which sits at 9811.  Given the size and shape of the move down so far, the latter is likely a better target.  All of this asusmes our presumed wave count is correct.

 

[click image for larger view]

[Update 1:54pm]

If this count is anywhere near correct, it’s straining the bounds with the Dow at about 9790 and the 76% retracement of  a.  There’s no new chart to accompany this update.  But prices need to turn up here or we need to re-assess our count.

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Digging into one minute charts doesn’t always show clear wave structure, but when it does it you would like to see it conform to your market expectation or otherwise use it as a hint to look for other possible scenarios. 

We have clear waves on from our morning low that tentatively carries the label (i) and so far price action supports a correction underway.  We can count 5 waves up into a, then 5 small waves down into [A] of b.  A possible  3 three waves up into [B] of b are developing but are currently testing the timits.  Should [B] be contained and end in three waves, it will continue to support our outlook.

[click image for larger view]

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Before being sold off to new lows, Monday saw and intraday rally off of from new lows.   As if following the same scrrpt, new lows on Tuesday were met by buyers who stepped up late morning.  Only time will tell if sellers rehearsed their lines and are ready for an encore after the lunch hour. 

If this bounce isn’t sold immediately, then we should be able to mark a wave (i) complete at morning lows and begin our search for the end of (ii) for resumption of the downtrend.  Seeing indications that b of (ii) is complete would build confidence in the count and help us find likely targets for the end of (ii).  That would leave us relying on the white count from Monday evenings issue of The Standard Deviant.  For now, the blue rectangle provodes a wide range of possibilities.  Particular areas of interest are 9915, 9954, 9978, and 10017.

Is-This-Wave-(ii)

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