Wave Count

Comments are welcome!

My Trade - 2012-05-W3

I am starting a new thread for the 3th week of May.  The following lists my positions as of Friday (yesterday):

Long Term - Big troop dolloar amount allocation: TLT 50% cash 50%
Medium Term - Small troop stock holding: EDZ, FAZ

If you have any question on short term trading or FX/Futures trading, please PM.

My Trade for last week

EW Market Talk on EliteTrader

Quote from ammo - i use mp and a lot of times it overrides the smaller time frames s/r and you go to a larger timeframe and you see them, do you have the same problem with ew,i included a monthly chart would some ew'er be kind enough to draw the past waves in,a,bc and 1 thru 5

ammo - I set up my blog last week and posted some possible long term counts in the archive. Some of them are out-dated but still worth taking a look. Note that my wave counts have grey line and purple line so you can see the wave from different perspectives. Thanks.

 Quote from Wide Tailz - Decision time. Wave 4 typically does not go below the fourth wave of the previous impulse wave. Notice the horizontal support on all the major indices?  If we go any lower, Bernanke and The Bulls are going to be in serious trouble.

 Wide Tailz - Yes, I agree that wave 4 is a critical support. The market looks so far so good. I will still be cautious. My portfolio has loaded tons of TLT, FAZ, and EDZ for my long term trade (published on my blog) and some short positions on GC, SP, EUR for short term.

Quote from ScalperJoe - Yes, the horizontal support is definitely holding it up. Also, the market is almost equally distant from the top of Wave 3 (1,422) and the top of Wave 1 (1,293), thus causing a very choppy and rangebound current pattern. It's a classic struggle between the bulls and bears.  No need for the bulls to worry though, Uncle Ben's got his helicopter ready, and will be flying all over dropping freshly printed fiat currency like leaflets in a war zone!

 ScalperJoe - Currently a possible wave count is in the abc wave 2 bounce from Wednesday's low. If this is the case, after this wave 2, next monday could be a big gap down.

Quote from bwolinsky - Can someone build a backtest on EW? If not, then there is no method.

 bwolinsky - I remember that we have talked about this before. Trading is not a science. Trading with EW is more than an art. If you are trying to find something guaranteed, there is no such thing. I set up a blog last week and started posting my trades for long term timeframe in real time there. You are welcome to see for yourself to verify whether EW worth your time.

Q&A - Which Scenario? (Feedback From ScalerJoe)

Quote from ScalperJoe:

Ok, so if the March low of 1,340 holds then I agree with scenario 1 that the market would rally as a wave [V] for a retest of the highs.

If it doesn't, then one target for scenario 2 downtrend is the next fib level of the bigger 5 wave pattern, which happens to correspond very closely with the Wave 1 top of around 1,293.

Given that the 100day moving average and two large daily tails offer support on the SPX chart, it seems more likely that your scenario 1 will prevail. These corrective wave patterns are quite tricky, and definitely have more headfakes than the clearer Wave 3 pattern.

ScalperJoe - Good point!  Yes, the 1340 is the wave-4 (the lower degree wave) where a corrective wave would stop.  Thanks for summerizing those two scenarios.  Today the market gaps up, we will need to see if the gap can hold or not.  If the gap holds and market goes higher, then probably the wave-[V] is underway.  If the market fails to move up, we need to be careful that it could be forming a wave-2 (corrective wave) in the scenario #2.

Q&A - Is the Market Now in [V]?

Quote from ScalperJoe:
Yes, the 5-wave pattern on SPY (or SPX) is well defined.  1,357 (Wave "A" low of the bigger Wave 4) was breached, however the March low of 1,340 was not. So the question is this: If the "A-B-C" of 4 is now complete, is the market now in [V]? If so, then one can view the sharp intraday rally from the bottom as "A" which should create a pullback buying opportunity in "B".

ScalperJoe - Good observation!  To answer your question, I woud like to bring up the two scenarios that we might have:
1. If the big wave-[B] was completed on 11/25/2011, then we could have a wave-V to test last month's high.
2. If the big wave-[B] was completed on 12/19/201, then we are in a down trend now.  Any up move will be corrective wave.

Actually, we can borrow Wide Tailz's chart (so that I don't need to draw a new one).
Wide Tailz's (2) will be my wave-[B] in the scenario #1

The following one is the scenario #2

Q&A - 黃小玉那些東西?

黃小玉那些東西

黃小玉 = 黃豆 小麥 玉米
偶過去 trade 了很長期的黃小玉 是 pit 交易的合約 (其中黃豆是偶過去的最愛) 後來只做偶現在的4種東西 後來聽朋友說到有電子盤的黃小玉  偶去看了看發現成交量太低 根本不能做 所以也沒有再提起興趣  成交量太低的問題不但是口數大時不容易進出  並且主要問題是倒限單(i.e., stop order)的slippage太大  外匯是最好的市場  而外匯當中就是歐幣最好  其它的都沒有歐幣來的有流動性  偶也有看到你提到做銅 偶的紐約銅是從在HG的前身CU開始做的 而這HG的合約仍然太小 偶當時幫公司操作銅板期貨主要為LME的3M銅  基本上國內沒有幾人 不過那些都是過去式了  現在偶主要就是只做偶的4個最愛

Q&A - 跌这么多,为什么还看空?

君遥 发表于 2012-5-8 20:45
恭喜恭喜老大发财.
现跌这么多,为什么老大还看空呢?

發財是沒有發財  最近都一直處怎麼做怎麼小賠的狀態中 :(   不過這沒關系  因為大部隊的操作主要重點在於降低風險前提下來提高收益  對於降低風險的重點就是在大風暴來臨之前將股票換成現金及債券  在大風暴過了之後將現金及債券換回股票  所以大部隊的操作不可能有一下子 all in 又一下子 all out 的事情

至於偶為什麼還看空?  因為偶是看大空頭  偶看市場是長線大空頭  偶看市場將向960區間走 至少第一站先看 1150 但終極目標是 960 區間 ... 到時偶將要 ... 國內的說法是 砸鍋賣鐵 都要 all in  :)   所以目前這個高價區  所有向上做多的必須是輕倉  任何向下的空頭信號便必須將股票賣光而轉為現金及債券

SP Short Term Bottom (from jas_in_hbca)

Quote from jas_in_hbca:
05-08-12 10:28 AM
Looking for a bottom likely sometime today.

Count Cash Index or Futures Index?

Perfect Wave: SP Wave Count Changed

Quote from ScalperJoe:  Just so I understand this correctly, as this is very interesting regarding the wave count, if the futures (/ES) breached but SPX did not, which takes precedence in accurately counting the waves?

ScalperJoe - Very good point!  That is a very good question indeed!  We trade wave, which is following some natual law, so we want to trade something that has good liquidity and good volume.  The more people participate the market, the more accurate we can get from counting the wave.  It is a dilemma whether we should or should not count the wave of after hour's futures market.  The after hour's trading is much easier to be manipulated.  What I do is to have a 2-way consideration: I count both SPX and futures index.  Today's market is an example that the after hour trading penetrated 04/23's low, but in the regular hour the market tried many time without being able to breach that key support.  Now I guess that we have two possible counts:
1. ABC has completed the wave [IV], so the market is heading north for [V].
2. Or the market is heading down in a massive wave-III collapse.

SP - Another Alternative Count (from Wide Tailz)

Quote from Wide Tailz:
If the market bounces hard, here is another possibility.

Wide Tailz - Nice count!  Thanks for sharing.

Q&A - Trading ETFs

Q - Snow laoda, what ETFs do you prefer for long term holding?

A - I trade the following ETFs for long term investment:
EEM, EFA, SPY, TLT, IWM

I trade the following for medium term trading:
Bull ETFs - BGU, EDC, FAS, TNA, TQQQ, UPRO
Bear ETFs - BGZ, EDZ, FAZ, SPXU, SQQQ, TZA

I trade GC, SP, EUR, JPY futures for short term trading.

SP Wave Count Changed

SP futures index gapped down and broke the low of 04/23/2012, so the purple line wave count became invalid. The low of today has reached the target of the measured move - same size as the down wave from 04/01/2012. Now we prefer the wave count that we posted on 04/28/2012. Please see attached:

Q&A - 犯傻进了一大堆靠

Q - 雪骑斑竹 - 我昨天犯傻进了一大堆靠 ... 收盘时套牢了。看各位都说LL, 现在我惶惶的。不想斑竹还说得让我哭笑不得。如果进的是ES, 还可以逃。就想应该改行学ES。真心的。最实用的问题： 周一应该砍还是焖？ 或者砍一半换成扑？没主意了。够虔诚了吧？

A - 偶沒注意到妳週五進了call  這問題就來了 妳知道選擇權價格成分是以下2個的組合: 時間值 (time value) and 內涵值 (intrinsic value)  而這時間值的 decay 在最後30天內以拋物線下滑  在最後一週以更快速每小時都在下滑  所以如果要做選擇權  比較有利的方式是買遠期賣近期  偶在20年前是國內第一個做期貨選擇權的人  在玩過所有的strategies及各種玩法之後  偶決定不再玩選擇權  因為, IMHO, 選擇權買方是冷水煮青蛙(一不小心就被燉死)  而賣方是開保險公司(千萬不要碰到大地震)  當妳資金越做越大時  最後妳會考慮的是如何降低風險  而不是快速翻倍
好了  我們回到妳的問題  這個扯到了對於下週行情的看法  就聊聊偶的倉吧  因為偶的FAS也是被套中 (偶在週五開盤價買進FAS的)  偶的FAS有兩個出場點: 1. 跌破04/23/2012的低點就會認賠殺出  2. 回到原來的買進價偶就會出場  因為偶長期以來就是看美國股市會走長期大空頭  這次偶只希望週一不要跳一個大洞下去低開就好  因為每一次的賭注偶都有計算過所要承擔的風險  如果一個大洞跳空低開就超出了偶的原先預留的風險  萬一如此偶就要看它是開在哪裡  是要砍還是要看再說  因為偶目前的倉是做多  偶是希望它能給偶機會上去解套再崩盤  所以請參照偶波圖的紫線走法  另外當風險過大但是走向不確定時  一個好辦法就是50/50 - 出場一半但留下另一半

My Trade - 2012-05-W2

I am starting a thread as my trade journal to explain my medium to long term investment.  The following lists my positions up to Friday (yesterday):

Long Term - Big troop dolloar amount allocation:  TLT 25% EEM 25% cash 50%
Medium Term - Small troop stock holding:  TNA and FAS

If you have any question about short term trading or FX/Futures trading, please PM.

Note - The price action last week showed a very weak stock market.  It is so weak that the market could go to crash soon.  I will liquidate my stock holding if the market ever falls below the starting point of last up waves - the low of 04/23/2012.