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Trade the Bollonger Band Squeeze

Archive through November 15, 2010

Chart Forum » Hilarius' Hall Of Fame » Elliott Wave Watching » Archive through November 15, 2010

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gdd3
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Tuesday, November 09, 2010 - 02:23 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Rudy,

I waited for the 14:00 I.C. update to come in B4 I posted these charts that show a 'confluence' of potential 'sell' confirmation signals using the RWWI indicator(Williams%R's).

Can confirm that your 'decision' line(shown in white) on the first chart has given a 'sell' confirmation as has a 'intermediate' swing low 'decision' line(light pink from Oct 1st low). However, the 'decision' sell line I am waiting to see broken is the thick red one shown on both charts which originates from the May low(slightly lower than the July low). Now, the question is if that is the case for the Williams%r14 chart line then we will have to question 'validity' if broken today or tomorrow as it may be seen as breaking too low(well below the desired -20% line). However, on the Williams%R55 chart you will note the 'same' line will be above the -80% so you will also may be question its validity....or do we?

Have a look at this chart(W%R55 chart) and note that all previous valid sell lines(3 red and 1 pink sell decision lines) that picked up the 3 major swing sells and one intermediate swing high starting from the Oct.09 swing high and note that the break of the decision lines were all above the -20% level on the Williams%R55 indicator. If we had waited for breaks of valid 'decison' lines, i.e. just at or below the -20% level(as we mostly do using the W%R14), then we would have picked up the change in trend 1 or two day's later and in a swift falling trend change that could be not so advantageous!

Another interesting facet of the W%R55 chart is the 'chart pattern' that has been forming over the past 2 months...a reverse triangle/wedge pattern(highlighted by a yellow box)...no different in consequence to its equivalent price chart pattern. That is, mostly a bearish signal, and if it breaks on the downside, then its back to at least the widest part of the pattern...hence I would be guessing we should see the W%R55 back to the -35% to -50% soon.

Speaking of 'expected' supports on the Williams%R indicators, just a clarification of what Rudy has said above..."As Dolphin has pointed out in the past, the -40% and -60% levels can often act as a support for a bounce". I was referring to potential support zones in a STRONGLY rising/falling trend only and I'm not too sure if our current uptrend(since say July/August) can be classified as that, yet!





Hope this all makes some sense, Rudy...and other readers!

Cheers
Dolphin}

(Message edited by gdd3 on November 09, 2010)


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rdumas
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Tuesday, November 09, 2010 - 03:14 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



XJO UPDATE

Looking at the move down from the peak of the latest XJO rally it looks like we have made a 5 wave move down. The only problem is that the second wave was an Expanding Triangle.

Wave 2 of an impulse wave can be any corrective pattern except a Triangle. This therefore leads me to believe that what we have seen is an WXY(XX)Z corrective pattern. If I am correct then it is quite possible that the 4th wave of our larger wave 3 pattern may have completed. I have to admit that my Delta studies anticipated a 4~6 day correction but it is possible for the Delta to slip a few days.









I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Tuesday, November 09, 2010 - 03:34 pm:Edit 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,

Thanks for your thoughts in your post 1122. Please note that all of my back testing and research has been on the basis of using the W%R14 indicator and not the W%R55 indicator. I continue to use that particular W%R14 indicator in isolation for my method from any other W%R indicator using a different parameter until such time as I verify that another one adds definite value to the analysis. I feel that it is important to keep things as simple as possible.

Your comment below assumes that I would have used the same -20% and -80% indicator criteria for my decision line intersection levels for W%R55 indicator trend lines as I do for the W%R14 indicator trend lines. I have no doubt that this WOULD NOT have been the case as I have already stated a few times in previous posts that any indicator action above the -20% and below the -80% levels were not useful in terms of providing decisions in my system.

Have a look at this chart(W%R55 chart) and note that all previous valid sell lines(3 red and 1 pink sell decision lines) that picked up the 3 major swing sells and one intermediate swing high starting from the Oct.09 swing high and note that the break of the decision lines were all above the -20% level on the Williams%R55 indicator. If we had waited for breaks of valid 'decison' lines, i.e. just at or below the -20% level(as we mostly do using the W%R14), then we would have picked up the change in trend 1 or two day's later and in a swift falling trend change that could be not so advantageous!


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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gdd3
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Tuesday, November 09, 2010 - 04:49 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Rudy,

Yes, I understand that you have always been referring to the Williams%R14 period indicator throughout your investigations on the W%R's and therefore wasn't implying that you would have used the same -80%/-20% levels on, say a W%R55 etc., the same way you are using them on the W%R14. I was only including my observations on the W%R55 to show you, and anyone else interested, that may be we can use 'cross-overs' from higher/lower than -80%/-20% for valid signals to get closer to the signals being given on the W%R14 to add confirmation of a potential sell/buy near tops/bottoms....but this 'investigation' is in its infancy, OK!. What I am also trying to establish are parameters that will add weight to decision making using the W%R's. A bit like 'marrying' the daily charts with weekly chart trend signals as in the use of other indicators(eg re: MA's....Hourly UP, Daily Up and Weekly UP).

Putting that aside, as a matter of interest I looked to find another chart that shows a similar indicator pattern its Williams%R55 to the one I have shown above on the XJO.
I didn't really have to look far as low and behold "Owl's" NTU that you and I were discussing over the last 24hours shows a good example of a 'matured' wedge topping pattern that set-up its recent fall along with a W%R55 decision line sell(Rudy, note, a sell decision line can be drawn from the same lows to validate the W%R14 sell signal at the same point also). I have drawn two prospective 'targets' for the W%R55 to get to basis the width of the widest part of the wedge pattern. One(yellow dotted) is taken from the top of the pattern to give a -60% target, and the other, (orange line)is taken from the breakdown point of the pattern and comes in abt -80%.

Now if we relate this information back to the price chart and try to reason the consequences of these projections I guess it would suggest that we may continue the very recent 'slide' breaking the 2 horizontal(orange) support lines I have drawn and get down to say 28c/27c(blue line) to complete a 'perfect' wave equality "abc". This would also 'tally' with the overshoot of the outer uptrend channel(at the recent high) with an overshoot of the lower uptrend channel line to have 'harmony'.

All supposition my dear friends; lets wait and see????



Cheers
Dolphin


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billt
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Tuesday, November 09, 2010 - 06:51 pm:Edit 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 for your earlier post.

Interesting to note that SPX has multi potential W%14 sell alignments over the next few days - lets see if Polly responds.

Also of note is that ETF GOLD does not seem to have any potential W%14 sell alignments until around 19 November. It is approaching a 5 month high, after a 4% rally in the past few days.

On the EW count, most are now on the 5 wave count from the 1 July low. I haven't seen another ABC count similar to mine! I am alone on that idea.

Just for fun....One 'Uber Bear Prechter Old School' EW Count is calling this the top of wave 2, concluding a broadening top abcde after a monster wxyxz run. His road to hell is just about to start - maybe we should give him Andrew's contact details to cheer him up!!





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ehmu
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Wednesday, November 10, 2010 - 06:52 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I did a little reading and experimentation using the W%R ideas that we've been playing with.

My rudimentary presentation is not intended to be condescending or patronizing in any way, just my efforts to somehow rationalize the ideas.

observations:

Williams observed that his indicator worked the best when the span setting was half of the cycle length. I didn't try using Andrews cycle lengths, but that might be interesting.

Williams plot simply represents the % level that the closing price is relative to the price range in the period selected. This is why the support and resistance levels within the range could easily be related to our existing concepts of fibonacci levels between support and resistance levels.

The 14 day price ema has provided consistent support for the latest rally.

14 is about 80% of 18, so I tried setting the w% span at 18 and found that there seemed to be convergence on the next possible sell signal for the Russell around nov19 (on multiple time frames).

I also tried to get a correlation of the breaks by overlaying ROC on the williams chart. I noticed that the breaks occurred where the williams crossed the ROC. (note, I spanned the ROC so that the related peak or valley matched the -20 or -80, and the 0 crossing matched the -50 williams). The breaks quite accurately matched where the williams crossed the ROC.

I also noted that the (near) breaks of the williams -20 occurred when the price closely threatened to break the daily price 14ema.

I noted that my technique was quite accurate, but is not predictive. This is so, because of the nature of the charting program---since it needs the data from the close after the crossing before it can plot the point that crosses.

I found that trading on shorter time frames than daily (ie hourly), that the same setting for W% worked fine, but I had to adjust the ROC to 23 to limit the false breaks.



All in all, the chart provides a little better flavor of the energy in the price movement, but I'm not sure if it is much improvement over simply selling a close below the 14ema on the daily.




_____ n a m a s t e

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billt
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Wednesday, November 10, 2010 - 08:10 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hey all,

Using your Russell 2000 ($IUX) chart, it seemed to me that there were two -20 sell signals during this rally using the W%18, we have another sell signal right now:




Using the W%14, the sell signals were activated again around the same time. This perhaps corresponded to the end of wave i and wave iii? If the W% went back to -10 perhaps that signals a previous false signal and another buy sign - I have labeled those with blue crossed circles:





Using Dolphin's W%55 may have eliminated one of the false signals. At the moment there are a couple of possible 'hits'.







Using a simple EMA 5 & 10 crossover gives a great confirmation without too many false readings. A lagging indicator but if you want to play a little safer not a bad fall back. Sharp reversals at the turning points get hammered! In this extended rally it may have kept you 'set', rather than selling too early. If we reverse hard at this point you would miss out on the top 3% of value of the rally:





It is interesting that the multitude of 'early' indicators during this rally were triggered repeatedly...but if it was easy everyone would be doing it!


Knowing how to 'read' a false signal is the key .....


I am not sure Dolphin whether you have a 'trigger' to buy back in after a false signal on the W%14. If the index moves back above -10%, it might suggest the rally has not completed, and perhaps you have picked up a termination of a wave 1 or iii? Buying back in at the -10% level would be at a similar price....Any thoughts?


Bill


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billt
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Wednesday, November 10, 2010 - 08:26 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



...as the IC charts update, it appears we have multiple sell W%14 signals on the SPX & DOW...





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billt
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Wednesday, November 10, 2010 - 09:05 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Last piece from me this morning (promise!)

I have just completed a review on the two methods on the W%14 and the EMA 5&10.

In this extended August/Setember/October/November rally the EMA 5&10 system would have delivered c.75% of the 187 point rally. The W%14 gave a 70% result.

The results would have been reversed significantly on a shorter rally.



Rally from 27 August to 5 November 2010

1040 to 1227 = rally 187 points

W%14 Method, buy back in at -10 (based upon closing prices)

Buy & Sell points
1049 to 1134 = 85 points
1160 to 1185 = 25
1193 to 1213 = 20

130 points out of 187, 70% of the rally


Double Cross Over SPX EMA 5 & 10 (based on prices at the crossover)

Bought 1060
Sold (still to action) say 1200

Gain 140 points

bill





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rdumas
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Wednesday, November 10, 2010 - 09:53 am:Edit 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, Hal and Bill,

Excellent research guys. I think that we can all agree that we have some further research to do but it does show quite a bit of promise.

In the meantime a combination of my EW analysis and Delta analysis leads me to believe that we are possibly still in Minor level wave 3 of the final leg to new market highs in Feb/March and possibly as late as May 2011.

If I am reading things correctly then we may have possibly completed Minute wave circle 4 of Minor wave 3 and are about to start Minute wave circle 5.

Now it is possible that Minute wave circle 4 is not yet complete but I have bought myself some STW just as a pre-emptive strike.

My Delta studies suggested that Minute wave circle 4 would complete sometime this week and Minute wave circle 5 would complete sometime between the 15th and 21st November. It is for that reason that I have already bought some STW. As you can see from my suggested periods we are not looking at any significant moves in terms of time and possibly price.

If my reading is correct then once we completed Minor wave 3 we would move into Minor wave 4. Now I have that completing sometime late November/early December. As Minor wave 2 was a 'sharp' pattern I am expecting with a 62.8% probability that Minor wave 4 will be a complex 'flattish' pattern. So I am expecting it to chew up more time than price remembering that Minor wave 1 terminated at 4598.7. A breach of that level would obviously invalidate my EW count.

Naturally enough, it is a possibility that we have already completed Minor wave 3 and are in the early stages of Minor wave 4. Randall tells me that this is what PUG is suggesting. It should not take long to prove which of us is correct. Wish me luck.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Wednesday, November 10, 2010 - 10:23 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Good luck Rudmeister

Captain 'Pug'wash has called the wave 3 top, and his idea is an abcde wave 4 through to Xmas, before wave 5.

The alternative to that is a fuller abc correction to trouble lower fibs, 1155 fits wthin wave iv of 3, and 1133 being the lowest before we hit wave 1. ....At that point I'll pull out my 1010 ABC option....





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rdumas
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Wednesday, November 10, 2010 - 10:55 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks Bill. As I said, it won't take long to determine which of us is correct.

The XJO as a first step has to make a clean break from that descending channel for me to be more confident.





I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ehmu
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Wednesday, November 10, 2010 - 11:19 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




billt wrote on Wednesday, November 10, 2010 - 11:23 am:

The alternative to that is a fuller abc correction to trouble lower fibs, 1155 fits wthin wave




flattening and spike distortion on summit of wave 3 may lead to flatter fill of wave 4







_____ n a m a s t e

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rdumas
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Wednesday, November 10, 2010 - 01:02 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I pulled out of the STW trade as soon as the XJO went below the red line at a small loss. Whilst it could bounce from the current position we may also have finished a 'b' wave with a 'c' wave down to follow. It wasn't worth the risk.





I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Wednesday, November 10, 2010 - 02:25 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Possible EW Counts for the XJO

Hi Folks,

There are a couple of scenarios that come to mind at present. The first one is that we are extending Minor wave 3 with a number of nested 1/2 waves.




The second scenario is one that we considered earlier in the year (refer below).




I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Wednesday, November 10, 2010 - 02:40 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Guys

Hal, I like that wave you placed over the chart - where did that come from?

Rudy when you said this morning "a combination of my EW analysis and Delta analysis leads me to believe that we are possibly still in Minor level wave 3 of the final leg" it had me running back over the Delta stuff posted earlier by Andrew. What piece of Andrew's cycle work gives you an idea that wave 3 has some more legs to it...I get the picture of how it works in the longer time frame, but I am still struggling with the interpretation in the shorter time frame. Any clues?

Finally a piece from 'Trader Dan' today with some EW ideas from me....US Long Bonds ready to tank!






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rdumas
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Wednesday, November 10, 2010 - 03:16 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

I have attached a spreadsheet which will allow you to see the chart below in greater resolution.

I am prevented from telling you how it works because it is a proprietary system available from The Delta Society International. The system is owned by none other than Welles Wilder who as you now has produced a heap of technical indicators. You can find out about it at
http://www.youtube.com/watch?v=FLPi2sEnmcs

Andrew and I use it for is determining the timing of potential tops and bottoms in the market.

When you look at my chart below (and in the spreadsheet) you will see that I have a cycle that runs with various tops and bottoms labeled from 1 to 10. Note that the particular market cycle that we are currently in is between the cycle points 7 and 8. If you look at the previous points 7 and 8 you will see that they were not separated by many trading days (the chart is in calendar days by the way). Recently we had a high on the 5th November which I have labeled point 7. Now on the last 3 occasions, point 8 came 5, 4 and 8 calendar days after point 7 terminated. We are currently going through the 5th calendar day since the point 7 terminated (note that today's price action is not yet entered into the chart).

On the basis of the Delta chart alone, we should be near a bottom and I expected it to come by Friday at the latest. You will note that point 9 is located about a week further along from point 8. The timing of these points 7, 8 and 9 looked very much like the termination of a wave 3, 4 and 5 at some level.

Often there is a very close relationship between these tops and bottoms and EW patterns. It is a again another important tool in the tool box of the 4 M's






application/vnd.openxmlformats-officedocument.spreadsheetml.sheet
xjo itd chart.xlsx (64.6 k)



I would prefer to respond to any further questions on this subject privately for the reasons provided above.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Wednesday, November 10, 2010 - 03:27 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Rudy

Thanks for the XJO EW updates.


On the ABC option, would this count be still an option? It looks more 'natural' to me, as there appears to me a lot of overlapping price action, and more 3 wave action than 5?





On the 5 wave option, the main difficulty is the overlapping nature of the price action for a wave iii event? The disproportionate Red A and Red C looks a little odd too?





Andrew's Cycle Analysis doesn't inhibit a Red C wave forming to seek out a larger correction, but it is less likely - is that fair comment?

As you say - we will not have long to wait to find out which course we are on!

Bill


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billt
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Wednesday, November 10, 2010 - 03:29 pm:Edit 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,

Our posts overlapped


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rdumas
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Wednesday, November 10, 2010 - 03:37 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

The overlapping is not a wave 3 it is a wave (i) of a higher level wave circle iii. This particular wave (i) is a leading diagonal and is valid under EW rules.

As I was just saying to Randall off line, if it was not for Andrew's cycle analysis work I would be favouring the scenario 2 option. The only thing that I have against it is the time it would take to complete both Intermediate waves (B) and (C). I doubt that we could do it by May 2011. It does still have to remain on the table though and is a definite viable alternative.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Wednesday, November 10, 2010 - 03:51 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



To enable a fuller ABC correction to occur, points 7,8,9 & (12) would have already had to be complete. Red 1 then picking up a new low??? (number 10 might occur along the path south, with a new set of 1,2,3,s to follow)

I am not sure of the 'rules' for placing the numbers...but I guess it would have to look something like that for the ABC (XJO @4000) move to work.

Just posting this as it may be of interest to others - I realise there is little that can be said as it is a proprietary product. Shout 'Invalid' if it is!!

cheers

Bill





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billt
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Wednesday, November 10, 2010 - 04:01 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



'Charlie Sheen on Viagra'


Hi Rudy

We keep overlapping! Big Thunderstorms in Sydney - good for your garden mate!

I never would question the validity of your counts Rudy - even when you correct yourself at times I struggle to realise the original mistakes....even your mistakes look good!!

I guess to me any part of a wave iii needs to look like 'Charlie Sheen on Viagra'. It's a pretty 'limpy' wave i of iii....

Despite that, the SPX version of that count looks a lot more appealing, so perhaps we just have to accept Aunty is a bit 'limpy' at times.

All good stuff though Rudy...


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rdumas
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Wednesday, November 10, 2010 - 04:12 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

I have to agree with you mate. I also like to have wave 3's move with conviction but when you get nested 1/2's you will get a move that does look like it hasn't been taking its vitamins. As I said, if it wasn't for the timing thing I would be as bearish as you.

It's pretty amazing that we've probably got one of the better economies but we have one of the less optimistic markets. Mind you if you want to see one that is worse than ours you should check out the Japanese market. Those poor buggers know they're in trouble..........the US are in denial.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ehmu
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Thursday, November 11, 2010 - 02:28 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




billt wrote on Wednesday, November 10, 2010 - 03:40 pm:

Hal, I like that wave you placed over the chart - where did that come from?




Years ago, I constructed this curve from a 7 wave fibonacci expansion and a three wave relaxation. The first (bump) two waves I used as a tag when connecting curves end to end. It is a curve fitting tool that can be stretched and flipped every which way.

My idea was to use this template (which is transparent) to overlay on charts of interest, theorizing that I would reject charts that had un-natural, or complex looking wave forms. This obviously gave me an edge on the continuations that had not been rejected. I also constructed a grid overlay (two orders) of the same expansion/contraction. This didn't turn out as well visually as the curve.

Trouble is that I was then drawn to construct more complex wave forms that included combinations of the basic element--(it took on a life of its own)--it grew in to a mega analysis, and micro trading.

One morning I woke up looking at a wave and noticed something strange about it.







The universe has subtle ways of sending us messages.






_____ n a m a s t e

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billt
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Thursday, November 11, 2010 - 07:40 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Love your wave Hal, that looks fantastic!


SPX action last night:





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rdumas
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Thursday, November 11, 2010 - 10:43 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

Kind of busy today so can't spend much time on the market. Re your post 493. The short answer is 'invalid'.

One needs to remember what the Delta methodology is used for. You may remember that the 4M's look at time, price and pattern. EW is used to establish pattern. Delta is more of a time methodology. It is a cycle analysis methodology that looks at the timing of tops and bottoms far into the future. It has nothing to do with price at all. In your post you were attempting to use Delta as a pattern tool which it is not.

Note that as per my Delta chart posted yesterday I suggested that point 8 was just about to introduce a rally which should last a few days. My point 9 suggests that the rally should stay in play intil early next week. I hope that clarifies things for you.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Thursday, November 11, 2010 - 04:02 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



WEEKEND MARKET WRAP

Hi folks,

As you know I have on occasion put my week end market wrap on various IC threads in the past when they were within the file size constraints of the site. Unfortunately in the great majority of occasions the files sizes are too large hence I have been forced to send it out via email to interested parties. Some IC'ers who obviously don't know me have on occasion accused me of trying to form an 'elite' private group but that has never been the case. It always came down to the size limitations of this site. The wrap has always been available to whoever wanted it.

As various readers of the market wrap often discuss parts of the market wrap I looked for a way of getting onto the web.

I can now announce that it will now be available on the web for those who are not on my mailing list via the following link: http://www.elliottwavemarketservice.com/clicklogger/link.php?ad=18&aff=373

If it doesn't work by clicking on it just do a 'cut and paste'. The website belongs to Elliott Wave Market Services and the link is a special one which takes you directly to the latest market wrap document and allows Paul Thomason (the site owner) to monitor interest in my market wrap.

As the name implies the site is Elliott Wave oriented and I reckon that it has no equal in terms of simply describing the EW counts of the worlds indices as well as gold and oil.


The market wrap is one of a number of 'freebies' on the site. I have absolutely no commercial arrangement with Paul but am grateful that he has seen the value of the market wrap and has been willing to 'give it a go' so it meets his needs and mine, a win-win situation.

This will be the first and last of this type of announcement from me. I know that it probably stretches the rules but it's purpose is to ensure that all readers of this thread have access to the same information discussed on this thread.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Thursday, November 11, 2010 - 05:38 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Rudy

Just checked out the site 'elliottwavemarketservice.com' and your MW looks the business on the web page.

Thanks again for reminding me on the purpose of 'Delta' - 'a cycle analysis methodology that looks at the timing of tops and bottoms far into the future'. I had thought it had more to do with 'pattern' than 'time', so thanks for setting me straight.


cheers

bill


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billt
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Thursday, November 11, 2010 - 07:32 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



My running list of Indicators for Disneyland

Current SPX @ 1218.71

SPX Trendline – 2 month trend line still intact, 1200 breaks
MA (20) Daily @ 1192
Fib @ 1228.74 off 2007/2009 – topped @ 1227.08
$SPXA50R – Bearish Cross of MA 20 & 10
$DOWA50R - Bearish Cross of MA 20
$CPCE Equity Put Call; lowest reading in rally 0.43 last week, hit LBB
VIX: Falling Bullish Wedge; BBs 4 Nov print outside
$NYAD - moves below zero
$NYSI Summation Index – 963 to 943 and falling, yet to cross ema 5 & 10 @ 930 & 915
$NYMO McClennan Oscillator – negative 0.68, bearish cross of MA 5
$NYHGH – sharp reversal 530 to 112 in four days
$NYLOW – 3 to 16, highest in 2 months
$NYUD – 1101 – 443 in past 4 days
$BPSPX Bullish Percentage – beginning to decline 79.4 to 78.4 , first major decline in the rally, ema 5 @ 78.34
$NYUPV/$NYDNV – bearish cross 1 November
$BDI – declining 2995 to 2454 in past months
$TRAN – peaked 4 November
$USD – breaks trendline, 4 big up days 75.6 to 77.6, Euro reverses
$BPFINA – falling 56.7 to 56.1, EMA 5 @ 55.7

$Copper – new high 10 Nov
$SPX Daily w/EMA(3) & (10) Double Crossover @ c1200


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rdumas
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Thursday, November 11, 2010 - 07:39 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

That's what friends are for mate. I think he did a good job of displaying it. How do you like the new name? Instead of the 4M's it's the G4 (Group of 4).......kind of sounds like Rudd, Gillard, Swan and Tanner.

By the way I recommend the free week of access on that site. I reckon he could teach Precther a thing or two about EW and it's all on video so easy to follow. It's like having a teacher walk you through EW.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Thursday, November 11, 2010 - 08:03 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

I know that you are still anticipating a large drop in a wave C down but I continue to believe that even a relatively large decline in what I believe will be a wave 4 move will be somewhat limited. It has to or my preferred scenario will be made invalid.

Anyway, Andrew drew my attention to the following article by that great Hurst cycles analysis exponent Jim Curry. In this recent article he talks about the current 90 day cycle that either has just or will soon be completing a peak.

http://www.safehaven.com/article/18911/90-day-cycle-looking-for-a-correction

Like the 4M's he believes that the 4 year cycle is still heading north and won't peak until sometime between April and July (we were suggesting between Feb/March and May). Andrew does have one scenario where it could stretch to June/July.

For the nearer term however you will see that Curry is suggesting a drop that does not go below the 1039.7 level. If he is right then we will end up with a milder form of pattern that I suggested for the bearish scenario XJO and you will be able to claim the E'Dubya award for the week for being more right than me.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ehmu
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Friday, November 12, 2010 - 02:49 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




rdumas wrote on Thursday, November 11, 2010 - 09:03 pm:

For the nearer term however you will see that Curry is suggesting a drop that does not go below the 1039.7 level.




I'm missing something for sure on Curry's article. He has three blue arrows on the chart marking bottoms & loosely labelled as 90day cycle bottoms. There are 90days between the first two arrows and 45 days between the second two arrows.

If you were to take 90 days from the second marked bottom, then the next 90day bottom will occur around November 22. This date coincidentally seems to agree with the ITD point 10 bottom.










_____ n a m a s t e

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billt
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Friday, November 12, 2010 - 08:37 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I assume he has the middle blue arrow in the wrong spot??

If the next 90 day bottom occurs around November 22, and if it aligns with ITD point 10 bottom, then Curry's idea might play out. Andrew might need to correct us if were wrong:

"I am looking for it to form the pattern of a 'higher-low' on it's next correction. In other words, I am looking for the cycle to hold at or (more likely) well above it's prior bottom, which, as noted above, was the August 27 low of 1039.70 SPX CASH."

I like Curry! (chicken madras..)

I will get 'EW Man of the Year' Rudmeister with my very complicated ABC nonsense!


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billt
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Friday, November 12, 2010 - 08:46 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



perhaps something like this:




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rdumas
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Hi Hal,

Even though Curry suggests that we will go down to 1039.7 I still believe that it possibly won't play out that way. I just thought that I would show Bill the article because it did show a technical argument based on cycle analysis that could support his EW count.

Regarding that Delta chart. Note that the way that I display the labels they appear approximately in the time period where a top or bottom should occur based on previous cycles. Where I take some liberty is placing them at an approximate price level based on what I believe is the EW pattern being created at the time. This is not the function of Delta. As I mentioned to Bill, the Delta method finds the 'time' element and not the 'price' element.

For example in that Delta chart I had label 9 higher than label 7 thus suggesting that there was still another higher high to be made before the pattern completed. It is entirely possible that label 9 will in fact come in lower than label 7 and this would indicate that a higher order down cycle was now in play. Remember all that Delta does is look at time and not price.


Note also that I had a (12) above the label 9. The red label is a higher order cycle label.

It is entirely possible that the (12) label could have been located above the label 7 (thus meaning that label 9 would be lower in price) as at the higher level cycle time frame it is easy to have that much slippage in the timing.

So just capping off the above comments. We either have already made a higher level cycle top at point 7 or there may still be one more move up to form the top at label 9. Label 9 should arrive sometime around the middle of next week.

As a matter of interest Hal, that label 10 is located around the 28th November rather than the 22nd November.

Since you enjoy the cycle stuff so much I have attached another chart (nothing to do with Delta) showing some other cycles that are in play on the XJO at present.


application/vnd.openxmlformats-officedocument.spreadsheetml.sheet
xjo cycles.xlsx (49.8 k)



I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ehmu
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Friday, November 12, 2010 - 11:40 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



OK thanks Rudy

The file you attached is unzipped when I try to open it, then the unzipped files are all code for xl, there are about ten of them, so no idea what they look like on your end.

Bill, try the Tandoori Chicken, mmmmmmmmmmmm mmm




_____ n a m a s t e

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rdumas
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Friday, November 12, 2010 - 11:58 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Hal,

It should have been a straight out Excel spreadsheet. Here is an older version of Excel which you should be able to open.

application/vnd.ms-excel
xjo cycles older version.xls (57.9 k)



I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ehmu
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Friday, November 12, 2010 - 12:05 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thank you, yes, I can see the chart and cycle durations on it now.




_____ n a m a s t e

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rdumas
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Friday, November 12, 2010 - 03:11 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Possible XJO Bullish EW Count

Whilst there are a lot of fundamental indications that things are getting a bit dodgy, I will for the time being remain with a bullish EW count for the XJO. This is because of my expectation of the 4 year cycle peaking sometime in the first half of next year. This doesn't negate Bill's more drastic corrective move but for the time being I'll go with a smaller retracement at this time.

Based on the price action today and my Delta studies there is a high probability that we completed the last rally leg on the 5th of November and will not see another leg up until we have experienced the next higher level wave pattern down. If you look at my ITD chart for the XJO and moved the higher level label (12) from future point 9 to past point 7 you will have the changes I have made to the Delta chart. The only other change to the chart is that point 9 would now be lower than point 7.

If I am correct then the current down leg should complete sometime in the week ending the 28th November. My Delta date is the 28th but there can be a few days slippage either way.

My revised EW count for the bullish case is as follows.



The reason that I have gone for the nested 1/2's is because of the overlapping pattern of the rally legs hence pointing to a wave 1 leading diagonal pattern in both cases. Having this pattern means that it won't be invalidated unless the price action moves below the termination of label circle ii at 4313.9.

(Message edited by rdumas on November 12, 2010)


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Friday, November 12, 2010 - 06:31 pm:Edit 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 for all your detailed answers, that does help...

I amused myself by considering the 38.2% chance of a sharper correction south until 28 November, using the 'angle of attack' of the three previous corrections for a guide.

The three options gives a range between 1110 and 910. I'll settle at 1010.

So if we get a sharper correction does that make me a $2.60 outsider on my ABC idea!! (maybe it might be a bit longer on the bookies)

...I accept you are on the odds-on favorite at $1.60 ...last start winner/city form/distance/form/breeding/etc/etc





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billt
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Friday, November 12, 2010 - 06:48 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



4314

Sorry Rudy I just noticed I missed your post last night...

I'm afraid you will always be the 4M 'ers to me - silly swords, silly hats, hairy faces .... martians, cyclists, abc people, fibos.....





I will check out the site Rudy - looks good stuff!

Bill


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billt
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Saturday, November 13, 2010 - 03:13 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Guys,

Thanks Rudy for the MR. Interesting to have a 'review' of where we have been for newbies to the other site.

The inclination of the correction continues to match that of the previous three pullbacks. Very early days but it best resembles the angle of the April/May decline (labeled gold 'a' on my post 503 above).

'Pug' has us already completing wave iv after an abc pullback.

My more bearish 'black' count has us in the initial stages of a wave 3. After a four day pullback, and with another possible 10 trading day cycle still to run until a 28th November possible turning point, there maybe a series of nested waves to unfold. I have labeled the more bearish count as (i) of iii of 3 to allow a bit more room! If this count is to unfold next week it will need to do a lot of 'damage' in the next few trading days...8 trading days at least of wave 3 action, so we should soon know!





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rdumas
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Saturday, November 13, 2010 - 04:06 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks Bill,

Paul Thomason told me that I had hundreds of hits on his site and that should translate to more hits on this thread as the MW has this thread linked. Colin should be a happy chappy.

Based on the current values for the POG and AUD the ETF GOLD should come down to around the $135.15 level on Monday. I'm sure that the values will change before then because they usually do before our market open.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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rdumas
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Monday, November 15, 2010 - 10:14 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

Just to be crystal clear on what my expectations are for the SPX during the rest of the month. I am using this index as my template for both the US and Australian markets as the XJO has a reasonably complex wave pattern and not as easy to see. I figure that if we look at the index with the clearer wave count the pattern for the XJO won't do anything hugely different.

As can be seen from the EW count for the SPX that I put into the market wrap on Saturday (refer chart below) I believe that the index has completed wave 3 of Intermediate wave (C).





Now I also said that as wave 2 was a 'sharp' pattern, then we have a reasonable probability that wave 4 will have a shallower and flatter pattern. Hence we may form a pattern that trades in a sideways moving channel between the termination level of wave 3 and the termination level of wave 4.

So don't be surprised if we don't move down very far this week before we start moving up again. If my Delta stuff is correct however, we should not take out the 1227.08 of the 5th November (wave 3 termination). So in spite of my comment in the market wrap that the market could trend down this week, it is equally possible that the week may end up being a positive week as the pattern develops into a sideways moving channel.


It is still my expectation however that this wave 4 will be over sometime between the 22nd and 29th November.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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eagle
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Monday, November 15, 2010 - 11:29 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Rudy - congrats on getting onto the web, I'm sure you're new audience will appreciate the 4Ms (G4) as much as your IC followers.

A learning question if I may. The weekly wrap had a comment that labelling on S&P may be at wrong level or W5 could extend. I've interpreted your comment that W4 is expected to end b/w Nov 22 and end of the month as being related to the cycle analysis undertaken within the 4Ms but I was wondering if there was any EW rule that said a flat W4 couldn't drag on and on and on (ie is there any time limit to a W4 in EW analysis?).

Thanks for all the info the 4Ms provide us.


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ehmu
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Monday, November 15, 2010 - 11:37 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)








_____ n a m a s t e

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rdumas
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Monday, November 15, 2010 - 12:12 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Eagle,

That is an excellent question and of course could be the time killer that chews up time so that a peak could be made no earlier than say February 2011. It really depends what eventual pattern plays out for wave 4. Remember that there are many complex corrective patterns like Double and Triple Threes that can be flattish in nature.

Following are the EW Rules relating to an Impulse wave:

(note the comment relating to wave 4 timing in bold print)

Impulse Rules:

An Impulse is a five Wave pattern labeled 1-2-3-4-5 moving in the direction of the larger trend. It is the most common Elliott Wave pattern.
Wave 1 must be an Impulse or a Leading Diagonal.
Wave 2 may be any corrective pattern except a Triangle.
No part of Wave 2 can more than retrace Wave 1.
Wave 2 must retrace Wave 1 by a minimum of 20%.
The maximum time for Wave 2 is nine times Wave 1.
Wave 3 must be an Impulse.
Wave 3 must be longer than Wave 2 in gross distance by price.
The gross price movement of Wave 2 must be greater than either Wave 2 of Wave 1 or Wave 4 of Wave 1. The gross price movement of Wave 2 must also be greater than either Wave 2 of Wave 3 or Wave 4 of Wave 3. Wave 2 must also be greater than 61.8% of the gross movement of each of the above 4 sub-Waves.
Wave 3 and Wave 1 cannot both have 5th Wave failures. (A Failure is an impulsive Wave where Wave 5 is shorter than Wave 4 by price.)
Wave 3 cannot be less than 1/3 of Wave 1 by price.
Wave 3 cannot be more than 7 times Wave 1 by price.
Although there is no minimum time constraint for Wave 3, its absolute maximum time limit is 7 times Wave 1.
Wave 4 can be any corrective pattern.
Waves 1, 2 and 4 cannot overlap except by 15% of Wave 2 with leveraged securities, and then only for a maximum of less than two days.
The gross price movement of Wave 4 must be greater than either the gross movement of Wave 2 of 3 or Wave 4 of 3. The gross price movement of Wave 4 must also be greater than either the gross movement of Wave 2 of 5 or Wave 4 of 5. The gross movement by price of Wave 4 must also be greater than 61.8% of the gross movement of each of these four subwaves.
The gross movement by price of Wave 4 must be greater than 1/3 of the gross movement of Wave 2 by both price and percentage movement.
The gross movement by price for Wave 4 must be less than three times the gross movement of Wave 2 by both price and percentage movement.
Wave 3 and Wave 4 cannot both be failures. (A Failure is an impulsive Wave where Wave 5 is shorter than Wave 4 by price.)
Although Wave 4 has no minimum time constraint, the maximum time for Wave 4 is twice the time taken by Wave 3.
Wave 5 must be an Impulse or an Ending Diagonal. However, if Wave 5 is longer than Wave 3 by price, then Wave 5 must be an Impulse.
Wave 5 must move by price more than 70% of Wave 4. (This is not gross movement. Only consider the end points of both Waves.)
Wave 3 must never be shorter than both Wave 1 and 5, by either price distance or percentage price movement.
If Wave 5 is truncated, or contains an Impulse that is truncated, then neither Wave 3 nor Wave 4 can contain a subwave that is truncated. (A truncated pattern is where Wave 5 is shorter than Wave 4. This is also known as a failure.)
The maximum movement of Wave 5 is six times Wave 3 in both price and time.
Wave 5 has no minimum time constraint.



I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Monday, November 15, 2010 - 04:27 pm:Edit 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

Message received & understood.

Your wave iv 'flat' correction looks favorite at this point, however I am keeping an eye on the alternative to a ‘flat’ patterned wave iv.

Curry’s 90 day cycle suggests a fuller correction may occur at this point, so I am monitoring that likelihood.

The initial four day SPX correction has presented more of a ‘sharp’ pattern, replicating the commencement of the previous three major corrections this year. This could all begin to conclude over the next couple of days on the SPX if prices begin tracking sideways, but if the sharp pattern continues we could have a fuller correction keeping either:

1. the five wave count option valid completing wave iv with a fuller abc correction with prices keeping above the 1129.2 zone, or alternatively,

2. playing out into a larger ABC correction as depicted in my post 491 with a fuller correction below 1129.2 to complete a Wave (B) in one or two weeks time. Wave (C) to complete at the 2011 high.

If we are in a ‘sharp’ pattern, the EW count puts us in wave iii territory (post 505), so we will know fairly soon if a fuller correction can be dismissed.

If you compare the SPX & Nasdaq to the previous 'sharp'corrections, the 4 day pullback initially looks to be 'sharp' with prices running south in a similar band width. The gold vertical lines represent your turning point time zone:










The Chinese market has obviously had a sharper reaction to local news there, eroding the past 4 weeks gains in a single day. It will be interesting to watch SSEC's pullback to see any ramifications on the XJO:





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skyhawk
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Monday, November 15, 2010 - 05:54 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi guys,

my 2c worth re Wave 4's....

As far as my memory serves me correctly, there is little mention in the works of RN Elliott re time... I know RN Elliott dabbled with this but had no success.

The rules/guidelines that Rudy listed were not ALL part of the Elliott Wave Theory as developed by RN Elliott. This is especially the case with those referencing time taken for waves to complete or even the the length of waves.

These rules/guidelines although probably statistically valid
were developed by the other Elliotticians such Cycle Pro "Steven J Williams", Rich Swannell, and Steven Pierce to name a few simply by their own observations.

If eagle is a beginner in EW I think Frost and Prechters book "Elliott Wave Principle" is the best place to start as it is the modern extension to RN Elliott's original work.

Eagle, As EW is the analysis of patterns first and foremost,
it should be the pattern that is most important, not the wave count or trying to determine how log an EW pattern should take to complete. There are other methodologies that can be used to greater benefit for the analysis of time.

Application of EW via the basic tenets that RN Elliott developed and have been proven over time is your best bet.

If you apply and follow the following rules and guidelines you will stay out of trouble 90% of the time with EW:

A correct Elliott wave "count" must observe three rules:
1) Wave 2 always retraces less than 100% of wave 1;
2) Wave 3 cannot be the shortest of the three impulse waves, namely waves 1, 3 and 5;
3) Wave 4 does not overlap with the price territory of wave 1, except in the rare case of a diagonal triangle OR in commodities

A common guideline observes that in a five-wave pattern, waves 2 and 4 will often take alternate forms; a sharp move in wave 2, for example, will suggest a mild move in wave 4. Corrective wave patterns unfold in forms known as zigzags, flats, or triangles. In turn these corrective patterns can come together to form more complex corrections.

That's all...
Learn the patterns, and try to practice understanding when
these types of patterns are:
1/ Developing
2/ What types of patterns are most likely to follow after the completion of a pattern you have identified

Cheers







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eagle
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Monday, November 15, 2010 - 06:57 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Skyhawk - thanks for your input. I have read the Frost/Prechter book (but don't own) plus have various notes from Rudy. I couldn't easily spot anything to do with time and hence my original question.

I'm a part-time trader and got interested via in EW via Rudy/IC. As per your last two points, I was practicing my own weekly wrap many months ago to see if I could match Rudy (and 4Ms) output. Found that way I had to think about the patterns etc rather than just read and nod my head. Work has got in the way of that since middle of year plus a holiday. Need to get back into the routine of that. Your note is a good reminder.

I've had a few small successful trades taking the simple EW approach you recommend (and some unsuccessful ones too of course) so am gradually learning the ropes on EW.

Thanks for your input again Skyhawk - all helps with my journey.

 
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