7 replies to this topic

[NAV]

7 points on 50% of my ES long position in 30-minutes.

Edited by NAV, 08 June 2007 - 12:46 PM.

[denleo]

Nicely done as always. I am looking for a place to short next week. Let us know when you are ready to do it. Denleo

[Tor]

Good trade NAV. thanks for sharing.

[NAV]

Denleo, As for today, i am looking for a reaction to start around the ES 1517 level (Sep contract). That's where i plan to close the rest of my longs. But i don't think 1517 will be the top for this countertrend rally. One more down-up sequence will be required IMO to kill some time and suck in some longs for the next leg down. In the event the market goes down straight from here, i would be surprised and will mean something sinister is occuring. In e-wave terms, today was a wave A bounce. We still need a Wave B reaction to the downside and another wave C up, which should happen by EOD monday or tuesday, which is when i will likely short this again. If we move above 1517-1518 (Sep) today, then i will have to rethink my strategy.

Edited by NAV, 08 June 2007 - 01:06 PM.

[peregrine]

In e-wave terms, today was a wave A bounce. We still need a Wave B reaction to the downside and another wave C up, which should happen by EOD monday or tuesday, which is when i will likely short this again. If we move above 1517-1518 (Sep) today, then i will have to rethink my strategy. Not at all taking issue with your wave count....but... I am curious to know what there is in your thought process that leads you to conclude that this is an A wave ...as opposed to a complete ABC retracement to the .236 ? Thanks in advance. P

[NAV]

In e-wave terms, today was a wave A bounce. We still need a Wave B reaction to the downside and another wave C up, which should happen by EOD monday or tuesday, which is when i will likely short this again. If we move above 1517-1518 (Sep) today, then i will have to rethink my strategy.


Not at all taking issue with your wave count....but... I am curious to know what there is in your thought process that leads you to conclude that this is an A wave ...as opposed to a complete ABC retracement to the .236 ?

Thanks in advance.

P

In one word, Time Element - which is as important as price element in e-wave analysis. If i open a 120-min chart of ES, i can count about 35 bars from the top. So far the bounce is in it's 5th bar. A 35 bar decline cannot have just a 5 bar retracement. I would at least like to see Fib 23.6% time consumed for any retracement rally, that would mean at aleast another 4 120-min bars are required. Now, yes that could be fulfilled by churning slowly higher for the next 8 hours into the 1522-23 area. In that case, you are right, the A-B-C stuff is done. If you look at my reponse to Denleo, i said i would rethink my strategy if we move above ES 1518 area today.

On the other hand, we could go down in a wave B and then another wave C up into perhaps higher Fib targets such as the 38% retracement area.

[peregrine]

Thanks again. The lesson is much more credible coming from an astute practitioner.

[NAV]

Thanks again.
The lesson is much more credible coming from an astute practitioner.

Peregrine,

You are welcome.

Again, when i say 34 bars on 120-min charts, i was looking at the 24 hour 120-min ES charts.

If you are looking at only the day session then there are about 16 120-min bars. My simple rule is (based on observation of historical data), if we are dealing with a wave 2 retracement , then it should consume at least 38% of the time that wave 1 consumed. If we are dealing with a wave B, then it should consume at least 200% of the time that wave A consumed.

Let's assume that we are dealing with a wave 2, then .38 * 16 120-min bars = 6 120-min bars. So we need at least another 2 120-min bars to call wave 2 complete.

If the downswing was a wave A and we are dealing with a wave B retracement, then we need about 2 * 16 120-min bars = 32 120-min bars to consider the correction complete, in which case we should see at least a couple of more days of sideways grind.

I think, in this case, a straigth A-B-C to 1523 as you said is looking more likely and the morning session on Monday should put some kind of a top.