Interesting Chart Patterns To Monitor In Coming Days...

[MR]

Just an update on this idea.... Shorted ANN at 40.17, it is now at 38.30 today... good paper trade so far. Still paper Short. 1st target is 34.50 area, but suspect this is a wave 3 down building, so hoping for a lower target. (just dreaming outloud...)

Originally posted by MR; Posted in this thread 05-07-2004 11:52 AM
Did I mention paper trading Short ANN just now w/hypothetical stop loss above 42.25?

[soylent]

trailing stop

Marc --

Agree w/ you on Trailing stops -- they always take me out @ the worst possible price...

-c

[MR]

So far, so good on these ideas... no much, but nice little paper trade profits, and good to know I was at least thinking correctly in ideas.

Originally posted by MR; - Posted: 05-07-2004 11:46 AM
Finding a fair amount of aggressive shorter-term, Type 1 Sell setting ups in banks, financial sectors... metals too. GPT was one I wanted to paper trade Short couple days ago at 40, and told a friend I wanted to paper trade short FCX yesterday. BK catching eye, still risky for my style though, but interested.... Missed AEM Short... shoot. (How do you miss a paper trade! I take my paper seriously )
All are aggressive ideas only, mentioning them here so you can track too. PRU paper trade Short as well from a couple days ago, was aggressive gamble, but I like the idea.

[MR]

Re: trailing stop

Hi 'c!

Yes, Stops are a necessary evil. Even for the most experienced trader, we always have to work just as hard at managing a trade as we do defining the risk/rewward accurately. I got lazy yesterday, paying for it today. On the good side, it keeps me humble.

Originally posted by soylent
Marc --

Agree w/ you on Trailing stops -- they always take me out @ the worst possible price...

-c

[MR]

Follow-up on Jan post predicting higher energy prices this year....

Back in January I posted this chart here in this thread on how I felt energy prices were going higher this year. (Read the comments at the bottom of the chart posted at that time, shown below.) So far it seems to have worked out exactly that way.

You know what is scary now... when looking at CL, HO, HU, and NG today, even after the Saudi's announced increasing oil production, the charts still have a little bullishness to them.

It makes you wonder, at some point, shouldn't higher energy costs hurt the world economy? It kind of reminds me of how the energy crisis back in the 70's developed, but in a more sneaky way.

And guess who is planning a several thousand mile, long driving family vacation out to see western US states later this summer! Might need a small loan to pay for the gasoline cost!

Originally posted by MR - Posted: 01-20-2004 01:46 PM
Take a look at energy complex futures contracts, maybe some energy stocks if you get a chance. Email me your favorite symbols....

[MR]

Nice rebound today... looking more and more like a good thing stopped out with a paper trade profits yesterday on ESM4 hourly.

Relaxing now, waiting patiently now to see if can find any new sell setups.

Best wishes, and hope all is well with everyone out there.

[MR]

HU still some life

Looked again at Unleaded Gas contracts (New York Futures = HU). Looked at HU M4, HU N4, HU Q4, HU U4, etc. Then looked at monthly, weekly, daily HU #F charts.

I tell you, nice major Wave 3's up!

Thought back in January unleaded gas was going higher this year, still thinking gas prices are going higher this summer.

If I were trading futures right now, sure would watch it harder the next few weeks for a good wave 4 pullback, Type 1 Buy setup. The trend up still looks like it has some life left to it.

[MR]

Natural Gas contracts (New York market symbol = NG) is also an attractive energy product, under the right conditions, for those who like to do position trades. Downside right now, it is hard to figure out a safe buy area in short-term picture.

One idea to watch for in coming weeks-- bring up NG #F, start a AGET Regression Trend Channel (RTC ) from Feb '04 low to current high. It is overshooting currently but, per chance, it were to pull back toward the other half later, it might help set up a good trade for later. If this happens, just switch to the front month, or a reasonable nearby month contract and see if there is any clear Type 1 Buy setup you can identify.

One more thing, try to localize the wave count where the RTC starts... it is a little tricky to do this, in this case, but I could see it helping some people visualize better a possiblity.

Also, remember, Natural Gas typically has some seasonal lulls during the summer, then interest improves towards late summer, into fall months in preparation for winter demand. If something like this happens, and conforms to chart expectations, try to anticipate ways a position trader could safely get Long.

[MR]

July Soybeans acting funny. Is it working on an A-B-C zig-zag?

[MR]

Anyone here trade or monitor Goldman Sachs Commodity Index? (Reference to GN X0, Weekly, Daily charts)

Don't think it is a major Wave 5 as label, could be a lower level wave 5. If it dips in next few weeks, you can still identify supports. "Suspect" we still have some form of a bigger Wave 3 still in progress.

This index weights energy costs more, so if you fear inflation, you watch it as well as the CRB Index, or whatever they call it now.

[MR]

good reading, Market Wizards book

I think in the first Market Wizards book a great commodity trader, Tutor Jones,
talks about how it is not easy to pick tops and bottoms perfectly; he gives some
excellent advice how to stay alive so when the next big change-in-trend finally
becomes obvious to everyone else, you still have money to trade it. You might find
the paperback version good reading this coming up long Memorial Day holiday weekend.

[Ainsley]

Elliott Oscillators & whos in control

Hi Marc,

Thanks for the interesting commentory on the market and your views which are always a good read.

In your previous message you indicated that maybe the localised Elliott was in control of the move. my question is, if the trend has been labelled as the 10/70 oscillator and wave count in control, what happens when the 5/35 count is relabelled. Does this mean then that one should abandon the 10/70 view and return to the 5/35 view.

To clarify a bit further,

lets assume that the Daily 5/35 has a uptrending 3 and 4 locked in, however the wave 4 retracement didnt meet the elliott requirements ie 90 - 140%. I would then move onto the 10/70 oscillator and wave count, now lets assume that this count fits the retracement requirements.

Ok so this view is the one in control for the time being, now a few days on the daily count that had the wave 4 turns into a new elliott downtrend that is supported by the 5/35

So the question now is, if the original view of the weekly that is supported by the 10/70 is still in control or should this be abandoned and the daily 5/35 view used.

Im having trouble finding which chart to work with, this problem is apparent in the different time views, ie say the 15 minute chart shows one view and then the 1 minute changes to a new wave count etc etc

Any thoughts on this would be appreciated

Regards

Ainsley

[MR]

Ainsley,

In my previous post I was not suggesting "the localized Elliott was in control of the move," as you said. I only suggested the EW localization idea because I know there are many people out there who can not visualize in advance all the primary Elliott Wave trading possibilities. I wanted to show them one way they could "think outside the box" is all. Localizing is one technique that helps you better visualize within the algorithm possibilities. It is one way to better anticipate all the risk/reward ideas in advance. This way when those constant surprises or unexpected things happen, you are better prepared to "act" logically, appropriately, and not forced to "react" emotionally in ways which can only make things worse. The earlier you see possibilities before they evolve, the better you can build it into your trading strategy. This really helps you when real pressure hits because it is already a part of your plan.

As to your other question.... I would NEVER suggest you abandon the other techniques, as you are asking. All have relevance. Think of it more in terms of a weight system. Under the ideal circumstances you have the best possibility trade. You weight, or value, this trade a 100. You trade it the way you normally would. But as we have to deviate from the rules you put less weight on that trade idea being successful. Which means you don't bet the farm on it, you downsize a position, you spend more time applying other tools and techniques to better clarify the trade idea before you trade it, and you exercise money management techniques quicker such as tighter stops to minimize any damage.

In the older End-Of-Day Advanced GET version we put in a "What If?" feature for this very reason. We wanted to create a tool where users could build scenarios by adding another hypothetical date(s) to see how this could change the trade logic. We also added the "Training Mode" to help you future simulate trading ideas-- you could develop better trading logic in advance.

We are basically trading risk/reward. We do the best we can within the rules, but we still have to find trade ideas even when life and trades are not perfect.

I just try to post ways to help people think outside the box so others can try and duplicate, maybe become more successful.

As for what time frame to use, that is a preference issue which only the end user can truly define best. I prefer monthly, weekly and daily charts, with some sort of variable time frame to define the entry and exit. My brain is slow and methodical and needs more time to think out the possibilities. The higher time frames allow me more time to think it out and develop trading ideas. Many people just trade the shorter time frames because they can handle the action, think very quickly on their feets. Other considerations which help determine which time frame you focus on are: your trading resources available which determine the size of your trading and how long you can afford to stay in losing postions; your temperament is another. Do you have the emotional makeup to stay in a position overnight where there is higher risks. If you cannot afford to stay overnight, you have to focus on day-trade time frames. If you are a busy doctor or professional, you may have to teach yourself how to position trade, or do options because you don't have time to always check the markets during the day. Then you try as best as you can to adapt the rules and techniques to fit your needs.

As a general rule, what ever time frame you are trading you want to cross-reference at least one to two next higher time frames and see if there is obvious synergy in those immediate wave structures to the trading time frame. That can be very helpful if there is.

[soylent]

Ainsley --

I would also add:
- I don't rely on AGET EWAVES below 60m. It's BEST @ Weekly and usually pretty good as a risk/reward system on Daily, too.

I've had limited success w/ the #ing on anything below 60m.

-c

[Ainsley]

Who's in control

thanks for the answers fella's, I appreciate you time.

To summarize what is being said,

1 - Use the higher views to trade the day
2 - Use weighted averaging like an expert system for interpretation of which oscillators is running the show
3 - Understand your trading psychology ie day trader / position trader
4 - Views below 60 minute may well change in too many ways to be consistently predictable