Tuesday, February 10, 2009

Tuesday - Intraday update

Here is a quick snapshot of my internal chart set-ups that I use for my short-term trading. The chart on the right is the 120 minute SPX chart that shows where prices are in relation to the wedge we have been following:


As you can see, prices have not yet breached the bottom of the wedge, but are edging very close to doing so. If wedge is broken to the downside, expect an acceleration of today's decline.

A

16 comments:

Anonymous said...

Alan,

I suspect you are mixing EWT and classic chart formations, right?

Reading Pretcher's book he speaks of triangles (wedges) as corrective waves. They don't contain impluse waves. See page 41

Reading the Wave Principle Book, Triangles have 5 corrective waves labeled a-b-c-d-e and each of those waves contains 3 waves. Page 54.

The only time a triangle contains impluse waves is in a 5th wave or diagonal triangle. That's not happening here. See page 30.

Myself, I think a simplier count -- a five wave down (wave (1) of 5) and an a-b-c correction up (wave (2) of 5, may make more sense.

Either way, it doesn't change the forecast.

Alex

Anonymous said...

Prechter was exposed as a charlatan in the 1980s. Drop the loser.

He holds himself up as a "poor man's WD Gann" which he is not either. Just a dumb guy with a "system" so weird and complicated nobody can understand it. Not even the experts on the board agree, read the comments.

I use the proprietary Voplex indicator. 80% accurate and each wining trade is 2.4X as large as a loser.

Prechter can suck on that for a while. You can too.

Harry

Anonymous said...

Harry,

What is the Voplex indicator. How does it work? What is it based on?

I have doubts about anything that can't be tested with a computer. EWT can not be tested as a whole, but parts of it can be and I did it. One aspect of EWT I found to hold up under testing, so it has merit.

Alex

mlomker said...

I agree with Alex on the count. This should be wave 1 of wave 3 of Intermediate (5) -- we entered (5) with the impulse move down from 943 on futures.

We just hit the wave 3 target at the bottom of the triangle so we should have a smaller 4 and then wave 5 will either touch or break the bottom edge of the triangle. We obviously can't expect the real freak-out until wave 3 of 3 and that won't be today.

Anonymous said...

If the Voplex indicator was 80% accurate Allan, I suspect Harry would be s*cking on himself. Wonder if his last name matches his personality D*ck!

Anonymous said...

What is the Volpex Indicator? Can you give me a website for it?

Alex

mlomker said...

Alex,

Voplex is a male enhancement product. I doubt that it would help your trading. :D

Anonymous said...

Mike,

I agree. To me the 943 to 804 move was a clear 5 wave down. Since then it looks like we have done three waves that had 3 waves in them.

5 waves down and 3 wavers up, indicates the trend is still down.

I'm still hoping for another move up to the 886 to < 900 area.

Given the waves in this correction have been made up of 3 waves, it may turn into a triangle off the 804 low, and that would mean 2 more corrective waves still to come. Triangles according to EWT have 5 waves, made up of 3 waves each.

If that thought is wrong, and this was a simple a-b-c correction making up the 2 wave of 5, then 3 down is now under way and we should see five wave down action real soon.

Alex

Anonymous said...

Oh, so this guy is a total idiot. I got it now.

I was wondering, if a person had a system that made you that much money, that fast, why would you still be trading?

If I had millions I would go out and enjoy life.

Alex

mlomker said...

Yeah, I'm operating on the ABC wave-2 of (5) premise.

Wave 1 of 3 should finish today, Wednesday will be a retrace in 2 and then we'll have a vicious wave 3 down into the weekend. A wave 3 of that size would probably take 2-3 days to unfold.

I hate to bring news into my EW analysis but whether we go down now or next week really depends upon sentiment regarding TARP & the stimulus. It'll come to a head at some point and that will tip the market.

Anonymous said...

That's a good assumption, and the likely count.

I didn't get a chance to sell the market, because it never made it to my resistance area of 886 to <900. Thus, my feeling of a 5 wave correction triangle (with another 2 sideways waves to go), is likely wishful thinking.

To change the subject, it is very sad how Washington is putting our children in all this debt and little of what they are doing is going to help.

If we keep going in this direction, sooner or later people buying US Treasuries will figure out our leaders will stop at nothing when it comes to borrowing and printing money, then it will hit the fan.

My hope is that wouldn't happen this recession, but at the rate they are borrowing and printing, it may.

Alex

mlomker said...

"I didn't get a chance to sell the market"

I missed most of the move. For some reason I decided to change my analysis this morning, thinking there would be a wave 5 of C. I was flat (I don't take counter-trend trades) so I didn't lose anything but I missed 20 points of the move. I near 837 and what appeared to be a wave 4.

The wave pattern for bonds is pretty clear--a wave 5 up during this downturn and then they will melt down. Prechter has been saying for a decade that cash is better than bonds and eventually the bondholders will also figure that out (the onset of inflation).

Ariel said...

I hope all here know that a tri can't be a wave 2 (unless as part of a more complex correction). Only pointing this out in case it needs to be said. I'm not saying there's a tri here - considering it as one possibility, but it matters less than the primary question whether you're counting an impulse down or a zigzag correction. In any event - Good luck!

Anonymous said...

Ariel, very good point. I forgot that rule. It has been a while since I used the EWT.

That's supports Mike's count.

If 943 was the end of 4 and we are in (2) of 5, (2) should have ended because (2) has already done three corrective waves.

That's the primary count, and I'm OK with that.

Alternative: If the market doesn't fall, but rallies or continues to trade sidways and produce a bunch of sideways waves, then we need to start questioning if 4 has indeed ended and 5 down has begun.

Alex

Martin said...

Allan,

Thanks for this great blog. I check in every few days but I don't think I have posted here before. You do a great analysis.

I was looking at the chart on the left here, for your short term trading screen, and just wondering what are the three lower indicators - the names are clipped off the left edge of the image. So if you care to share, I'm interested. And no worries if not.

Thanks again.

Martin said...

OK, so I just read the post that follows this one, and I see you said these are indicators you will discuss at a future date.

I totally respect that, and I'll just have to wait. I would look forward to hearing more on that someday :)