Is KKD a good TYPE 2 sell

[marginman]

Using EOD of product, plz advise if KKD is still a valid type 2 trade?

Not sure how to embed the chart directly with this text, so the file is attached...Thanks

[marginman]

here is the weekly view

[DrewC]

Nice Chart.

[MR]

Can i answer your question quickly, then do an illustration later tonight?

Yes, it is a Type 2 Sell as you show it on the daily.

However, I would identify it as an aggressive Type 2 daily sell setup, and would not hold it short forever. My reasoning is
upon a 'quick look at the weekly time frame I see a Wave 1. 2. 3 labeled in progress with valid W4 projections and Wave 4 Channels.

Notice how in the weekly you see an intermediate wave 1-2-3-4-5 within a bigger wave 3 label. I think the daily 2-3-5 you are seeing is more that internal weekly 3-4-5. If I am correct, this will ultimately lead to a bottom pullback that tries again to trend higher.

Again, this is my very quick impression.

I will try to find more time tonight where I can check out a few more things, try to do chartwork in hopes we can further illuminate your charts with more AGET ideas.
- marc

[MR]

Sorry it took more time than promised. Here is the KKD chartwork to go with the earlier comments. I genuinely hope is helps. -mr

[marginman]

Marc....On the contrary, u work fast and furuious, How do u do it?

[MR]

.

Originally posted by marginman
Marc....On the contrary, u work fast and furious, How do u do it?

My wonderful wife of 21 years calls me an enigma, whatever that means? I guess it comes down to the fact I truly love helping people, am driven to always do my best, and get great satisfaction when others succeed.

Anyway, back to KKD. When you get some time, I have an idea that might help. Go to "Trader's Outlook" and look up the Pixar (PIXR) archive. (In the upper right corner is the word <Previous> and <Next> where you can back up and see previous posts.) I am recommending this mostly out of memory, but somehow I think this pattern is what I am visualizing could be happening with KKD. It is just an idea.

To get a completed current idea, load up a current PIXR monthly, weekly and daily data, using the "Training Mode." It is an excellent exercise to illuminate the possiblities with KKD. As you advance the data, stop it periodically. Figure out how you would trade it. Then see what happens. When you get to the past year of data you will be impressed with how it conformed to my Trader's Outlook expectation of a year or two ago. I kind of think KKD fits this profile. I am not predicting this will happen, or if it does how long it would take to evolve. Just planting a seed to help you better anticipate or visualize a good possiblity.

Print the charts out. Compare and contrast them. You won't be wasting time with this exercise. It will help you in the future.

click here for weekly Pixar similar pattern example

click here for daily Pixar similar pattern example

[marginman]

Thanks Again Marc.....

PIXR like analogy looks quite interesting...Some commentary i listed below. But what I gather from it is that weekly bullish w3 led and influenced a bullish daily wave recount.....Marc, Is that the interpretation and analogy being conveyed? watch out against shorting this sucker...

One other question what do u look for in weekly to determine the magnitude with which it will influence daily direction?

Comments:
-4/30/02 PIXR Daily showed first instance of w5, weekly in wave 3 up
-5/14/02 PIXR Daily w5 relabeled to wave 3 as price action climbed, never crossed the 6/4 DMA low and 5/35 OSC had already exceeded the previously labeled w3.
-5/29/02 broke through 6/4 DMA low on wave 4 Profit taking, weekly still in wave 3. stock then rallied in a type 1 buy to complete w5 by 6/28/02
-8/14/02 previous w5 is taken out and relabels on daily
-8/20/02 wave 5 relabels as new w3, all along weekly remains in original w3 formation
-ABC corrections ensue with a bullish bias, another w3 forms starting 10/25/02 thru 11/05/02. Weekly has remained in w3 up throughout this entire time frame.


Regards

[MR]

I am biased. My family loves donuts, and we own all the Pixar movies! Plus, Steve Jobs has my sincere respect

Joking aside, to answer your question, yes, what you said below reflects the essence of my KKD observations. Just a few more comments...

Looking again at the characteristics of KKD we see more A-B-C's than 1-2-3-4-5's. My suspicion, the 1-2-3 weekly relabeling to an a-b-c eventually is possible. If this happened the daily Type 2 Sell setup clearly works out, but my impression it would only identify a correction within a correction, which still is a weekly Wave 4 in progess.

I call the Daily an "aggressive Type 2 Sell setup" out of respect for the daily divergence and wave count. It does appear to be in an "overbought" condition at this time. It just tested the previous high and failed a little. I respect this short-term.

Yet, out of respect for the general bullish overtones of the monthly W3 wave count and the nice weekly positive behavior, I still find myself attracted to this stock. All things being equal-- as of today with all the information available-- I still am not ready to admit a major long-term top in KKD.

The PIXR/KKD analogy has similarities, while not totally analogous; I wanted to mostly highlight the concept of "pattern matching" as a consideration.

One key 'pattern' difference I see is based on the following observation. Today we operate on more realistic price expectations, a few years ago Pixar's Wave 3 came at the height of "irrational exuberance." While I personally believe KKD has benefited from Wall Street hype, its positive price action has nevertheless been based more on realistic, real fundamental performance. Pixar had a good story based on high future expectations. It took a few years to prove it was a creative power in the making, and it continues to deliver, exceed yearly expectations. Both stocks are similar today in that I still have confidence both stocks will continue to deliver in the future.

So, yes, maybe the daily is showing a Type 2 setup. It is normal behavior to expect. Aggressive traders looking for a short idea will find it to be attractive. But, if I am correct, my 'quick' read on this stock sees hints not to fall in love with being short, or not to give up on any longer-term bullish l/t expectations quite yet.

I will admit I do not know KKD quite as well as PIXR, but following it from afar since IPO'd, it has forced me to respect it.

When I first looked at KKD for you, I am not sure why, PIXR immediately popped into my head. When I glanced at PIXR for a current picture I was presently surprised it was conforming to my expectations. Quite frankly it would not surprise me to see KKD someday follow through in price behavior similar to how Pixar now is.

[marginman]

My suspicion, the 1-2-3 weekly relabeling to an a-b-c eventually is possible. If this happened the daily Type 2 Sell setup clearly works out, but my impression it would only identify a correction within a correction, which still is a weekly Wave 4 in progess.

Educate me plz,

Within the w2 to w3 trajectory of the weekly, there is a 1-2-3-4-5, how do u suppose those exact points relabel to an A-B-C?

Why is it so utterly obvious that should this happen, a daily type 2 sell clearly works out?

NFLX may give PIXR a run for its money, but that is a different topic...

Regards

[MR]

For the weekly major Wave 1, 2, 3 to change to a major Wave A-B-C, the Wave 4 would have to overlap Wave 1. For the weekly to relabel to an A-B-C the price would have to drop below Wave 1.

IF this happens, the internal 1-2-3-4 5 stays 1-2-3-4-5. However, it is now a 5-wave sequence within a major wave C, not a Wave 3.

My guess is anyone who shorts the daily at the top because they see a Type 2 Sell, and who stayed short, IF the price drops below the weekly Wave 1, they are bragging to guys like me, wondering why I was not as smart as they are to short the daily. (Trust me, Andy Bushak rubs it in to me all the time. Andy is an excellent short-term trader, I prefer to watch for bigger picture ideas.)

Three wave sequences are harder to trade. I am attracted to KKD. Not today, but at some point I would be interested in buying this stock. I wouldn't mind a pullback at this time, but not a deep pullback. I am at a loss what to do next if Wave 4 overlaps Wave 1.

I only mentioned this because there seems to be a history of bigger A-B-C’s swings now the weekly. I happen to think the first big sequence could be a 1-2-3-4-5 (if you allow for overlapping) but I respect AGET enough not to totally rule it out the A-B-C scenario.

[marginman]

Just an audit of an earlier call on KKD for a type 2 Sell on KKD. Another example of using the AGET tool for profit...Daily is setting up for a type 1 sell, weekly is still in wave 3 up......see below

[marginman]

[timw]

Looks like you called it right, marginman. Hope you made a killing!
Isn't Marc just great!
Best wishes