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Trade Trends with Bollonger Bands and Twiggs Money Flow

"WOLFE" Patterns

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gdd3
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Post Number: 1751
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Wednesday, October 03, 2012 - 07:57 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I had numerous e-mails regarding my posting on the "Way of the $XJO" thread of a possible "Wolfe" Pattern playing out in our XJO(2_Hourly Chart). They, and there slight variations, are quite easy to identify and more common than you would think. For your convenience here is that chart again with notations that go along way to explain what to look for in such a pattern and also what to expect as a likely outcome. I'll rely on readers to do a search(google..not here on the I.C. education pages) for a more in depth explanation and set-ups on this pattern in stead on me elaborating here. Remembered, this chart was based on data up to last Friday's close but it's still relevent.





.....to be continued!

Dolphin





}


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gamefisherman
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Wednesday, October 03, 2012 - 10:29 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Dolphin

Yet another great thread that you have created to share some of your teachings and knowledge and to perhaps encourage those whom can identify such patterns. At present, I need to work on Andrews P, and the Wolfe before I can contribute any stock chart possibilities. For those of us whom need to google to learn about the Wolfe, here are a couple of sites that I have found informative. PS I dont need to reply now to your previous XJO post as you have already answered my question.

Cheers
GF

http://www.investopedia.com/articles/trading/05/040405.asp#axzz28Eoty2jy

http://www.wolfewave.com/

http://www.chart.nu/







Protect your capital and the rest will take care of itself with a solid trading plan that is adhered to every trade (PS THIS IS WRITTEN TO KEEP REMINDING ME TO STAY FOCUSSED AND FORGET NOISE)PPS Dont just trade the trend....STAY in the trend....

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gdd3
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Wednesday, October 03, 2012 - 10:34 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



To assist in getting a better understanding of "Wolfe" Patterns, take a look at the top 4 charts...simple candle charts only. I will tell you they are weekly candle charts of the same market taken at various times during its travels so far. "Wolfe Patterns" work in all timeframes and can be Topping Patterns, Continuation Patterns or Bottoming Patterns. And, as I said in the previous posting, they are more common than you may think. I find them particularly useful in S/T charting analysis but as I have just said
these examples are from a Weekly Chart. Again, they are simple charts with only a top trend resistance line drawn in with no hint of what may follow.


,
,





The key to a possible early identification of a "Wolfe" style Pattern is to place swing counts in...you need 5 points...in 3 examples shown they are TOPS and 1 is a potential/possible/probable TOP(hint...of a Continuation Pattern), ie. clearly the market was in an uptrend at pt.1, a correction follows for pt.2 and the ensuing rally makes a new high for pt.3. Nothing special about that so far as higher highs and higher lows are common, right! A vital link in the chain occurs next. Swing leg 3/4 occurs and pt. 4 swing low may be above, at or below pt. 2 it doesn't really matter. The importance of pt.4, and more significantly, the value of the trendline joining pt.1 and pt.4(known as the "target Line")is there as a guideline going forward once we have established pt.5 of the pattern and thus confirming the formation of the pattern. To establish a guideline for our last up-leg, pt.5, we extend the trendline joining pt.1 and pt.3. Now, as I said in my notations on the 2-Hourly chart placed in the 1st posting here, pt.5 often can over-shoot or under-shoot the pt.1 - pt.3 trendline extension. Our aim is to look to enter a trade at the correctly located Pt.5 and, once established, we then can focus on a location of pt.6, somewhere near, along or at the price "Target Line"(pt.1 - pt.4 extended). From my 2-Hourly chart you can also see two methods to give you a "time" and hence "price" target objective pt. going forward. 2 out of 3 of the earlier patterns reach their targets and some. The 3rd one just fell short.



,
,


Now, finally here, I make mention of two telling observations of this pattern, as it runs its course towards pt.6. Firstly, the leg(pt.5 to pt.6) is usually swift and without any significant counter-trend rallies(i.e. less than 23.6% of fall thus far except maybe the initial bounce when pt.5 has been established)and, secondly, that once the "Target Line" is met that usually represents at least 85% of that swing move(pt.5 - pt.6)down in this leg B4 our next major Counter-trend begins.


...to be continued.

Dolphin


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gdd3
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Wednesday, October 03, 2012 - 11:15 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



As a conclusion of this 1st part here is the Weekly Chart of the XJO highlighting the 4 locations of the "Wolfe" Patterns I have been discussing. Remember 3 out of 4 so far have been yearly toping patterns. Our present one in play(not yet confirmed) would end up being a "continuation" pattern but could also prove to the yearly high(for 2012).

Now having discussed all of the above as "Wolfe" pattern it must be noted that for "Purists" these are not all really examples of your "classic" Wolfe Patterns(wave1-2 = wave3-4)...they fall into the "variation" category. Our closest one for the purist is actually the present one(if it behaves itself).

You will also note that I have highlighted(in a white box) two other parts of the Weekly chart that I will present tomorrow...they are also "Wolfe" patterns but are only clarified on a Daily or 4-Hourly Chart.




Good night all...


Dolphin


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hailoh
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Thursday, October 04, 2012 - 05:19 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Reverting to an earlier post of mine, it seems that Mr. Wolfe needs, and probably has, very broad shoulders to support his head.


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gdd3
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Thursday, October 04, 2012 - 10:48 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Hailoh...

Not too sure what you are referring to with your "broad shoulder" comment...was it your posting of the downward sloping pattern you posted a few week's back as my 1st chart refers to OR, was it to the upward sloping LLL/T RHS on the monthly as shown in my 2nd chart?

}}}

Cheers
Dolphin}}


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archer
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Friday, October 05, 2012 - 09:49 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



There is some timing here as well Dolphin
120 days from low with the 30 day cycle having good hits
1 year from Oct 4th low last year
Missed squaring by a few points at 120 days up and 480 points higher
But the market doesnt feel very week to me
Normally i would say down to mid Nov according to seasonal patterns but maybe its the new Bernanke seasonals at work now
120

(Message edited by Archer on October 05, 2012)


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gdd3
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Friday, October 05, 2012 - 02:07 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Archer...

Thanks for the Gann Squarings...120T/480P for the XJO, one day on, was also breeched today at 4465.

I thought 4478 may do the trick(basis Daily A.P.) but the Hourly A.P.(confluences of tynes) level @ 4490 is now looking more likely(only 2.5 points off) as the swing-point level...In addition, I hear that Wolfe howling getting louder, maybe just outside the door now as RASH has said!

Now I respect what you say...""But the market doesn't feel very weak to me"...but that maybe what the "powers to be" want most of us to think and the very time to be "ALERT".






}





Cheers
Dolphin


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espresso
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Friday, October 05, 2012 - 02:42 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




Just want to highlight below average volume for the last 2 weeks. Yet the market keeps climbing. Interesting!


Let him that would move the world, first move himself.
Socrates

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gdd3
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Friday, October 05, 2012 - 03:22 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Nice to know that my 1st example in this thread..."XJO"...2-HOURLY WOLFE PATTERN...and the one I used to explain mostly what to look for HAS FAILED to materialize. Now somehow, because its common for Pt.5 in such patterns to overshoot the Pt.1 - Pt.3 extension line, I have yet to find anyone( or on any website) that has explained by "how far" can you let Pt.5 extend beyond that extension line above , or Pt.3 high, before you say enough is enough...and this CAN NOT BE A WOLFE PATTERN? Of course this depends a lot on the gradient on the extension lines and Wave % relationships but as a "RULE OF THUMB" I use 23.6% of Wave 2-3. As for the XJO, in this Timeframe, it has exceeded well above the 23.6% wave extension ...so NO GO for me. However, this is only "failure" at the this level and does not affect the larger time frame potential WOLFE PATTERNS that may be in play.





Cheers
Dolphin

P.S. Espresso...Your vol. note is typical of only "Mum's and Dad's buying" not Institutional...another reason to be wary of our current position. Most technicals are "screaming" we need a break from this S/T exhaustion move if only to take a bit of heat out of the market. }


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archer
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Friday, October 05, 2012 - 03:39 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Commercial hedgers are certainly looking for a fall
Some pretty extreme readings
si
si2


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hailoh
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Friday, October 05, 2012 - 04:50 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Dolphin: the first of your charts was the one that originally caught my eye.

Did you watch ehmu's link (post 848 in the XAO thread)? Well worth the time.

When the financial system is as incestuous as it has become it must only be a matter of time before some incredibly crass recipients of insider free money really get up the noses of the rest. Once raw emotion gets out of hand the market bottom will be a long way down.


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nicola
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Monday, October 08, 2012 - 07:57 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The 5th October graph is interesting but they shorts have ben short for a long time. They must have very deep pockets. Personally I hope they are wrong.


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archer
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Sunday, October 14, 2012 - 09:59 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The SP 500 is struggling here because of a massive 1 to 1
at 807 points up
Its sitting right on support now from the previous highs
and 3rd angle trendline
Originally i'd expected this huge megaphone pattern to complete at new all time highs above 1600 around March 2014
but the angle of ascent is too steep for that
sp500


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archer
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Thursday, October 18, 2012 - 11:21 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hit the big 61.8 today
It looked like this trend needed a little blow off top
and the last 2 days may have been it
618


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gdd3
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Friday, October 19, 2012 - 08:49 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Archer...

Yesterday's 61.8% level on the XAO is AOK BUT today's 66.7% retrace level(4573), using the same dates, on the XJO is far better. WHY? Because it also coincides(well almost) with my Point of Control(4576) of our last major up range(shown here on the Weekly Chart). These levels being within 6/9pts of the day's high on a weekly chart is more than reasonable.

However, what is even more interesting is if you take your High/Low range from the 15th April'10 High(our post GFC rally high) to the 9Aug.'11 Low ...some 1259.2pt in 916cd/648td. Nothing appearing special there BUT if you apply the td's ratio as a retrace(i.e. 0.648%) and add that to the 9Aug.'11 Low(3765.9) we get exactly 4581.8...today's high! I have shown this on my 2nd Chart.

See how this all plays out. Anyway, we will see soon enough if these 'numbers' prove significant or not, aye!

Cheers
Dolphin







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rdumas
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Friday, October 19, 2012 - 03:39 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Dolphin,

An excellent post matey. Here is another way of obtaining that 4581 level. It is the 100% Fib extension of the leg from the 5th to 19th September on the $XJO 1 hour intraday chart.









The views expressed in this post are purely mine and may not necessarily line up with reality - Rudy

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gdd3
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Friday, October 19, 2012 - 03:56 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks Rudy; hadn't picked that swing relationship up. So far so good but lets wait and see what transpires tonight offshore.

Steady as she goes...up against a brick wall at times.

dolphin

ASX Stocks 20-minute delayed

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