Does Elliott Wave Theory Give You Something to Trade?

The short answer, which I'm sure you weren't expecting from me, is HELL TO THE NO! There is no 3-5-3-5-3-5- whatever count imaginable that could make me trade off of it. BUT EWT is based on market participants and "thinking", which I can get behind. EWT theory is NOT a useless tool, and I hope I've shown that by using it PROPERLY! It's when people try to count waves without using other information available to make a rational choice that it becomes USELESS. I know people who use EW and I know of people who use EW PROPERLY! The latter are usually the ones bucking the trend and mostly correct. If you would like to know how to use EW PROPERLY!!!! Let me know. But don't bash EW because some people disregard rules and suck at it!

Trend: Update

So did we get the confirmations I was looking for this morning? We sure did.

First chart:

Both trendlines breached. I'm disappointed it didn't make it over the white horizontal line though.

Second Chart:

Yellow crossed above white, a bull trend signal.

Third Chart:

SP-500 Hourly and current count.

I would place the odds at 85% that a bottom is in.

Best of luck!

Jim Genosky

Trend

I have been watching my favorite two charts for confirmation that the bear trend is over, and neither have confirmed this yet. If the bulls can hold onto the gap up this morning we may get confirmation.

Here's the first chart:

In this chart we want the red line to break above both white downtrend lines. Then a sustained move above the top horizontal white line would be a sustained bull market.

In this chart we need the yellow line to cross above the white line. Right now both lines are at a zero value, meaning bearish. A cross is the first buy signal where I'll unload a 50% lonf position. Once the yellow line goes above the horizontal green line I'll unload my final 25% long position.

Best of luck to ya'll!

Gold: Waiting on a Correction

I am long term bullish on gold. Gold has broken out of it's base channel and I believe it will soon drop down to retest that channel before going to new all-time highs. This channel is drawn off the 1980 top.

I would love for Gold to fall back to the 1230 area before going fully invested into it. Right now we wait patiently for the pullback to occur. Until then I am not buying gold.

Is Copper Trying to Tell Me Something? ALSO BULL/BEAR ALT. COUNT

Looks to me that Copper may have already bottomed, or maybe just put in another X wave before the final Z wave down. Either way, this is telling me to be cautious about getting heavily into bear mentality. Copper so far made it's bottom on May 11th, over a month ago. In my opinion copper better start selling off and break the previous low or we're going to see one hell of a short squeeze on the bears in the near future.

Additionally, I was looking for a count that would throw off both the bulls and bears, and came up with a beautiful idea that would scorch the bears one last time, then kill the bulls. Check the green count in this daily chart.

From my research I've learned that wave 3 is less than wave 1 in under 5% of the cases, so I'm not giving this too much credence, but I'll sure be watching it!!!

Drop Into June Is A Long Term Bullish Signal

Since December 2010 I've been saying we should see an incline followed by a drop into mid-June 2011. It seems we are getting that drop currently. Targets for this drop were 1273, 1250 and 1220. On Friday I bought my first batch of SSO which is a 2x SP-500 ETF. The bears will say we're in wave 1 of P3 down, I say when will they give up?? Listening to Prechter would've lost you nearly 30%. Listening to the P3 crowd is NOT working. The support level for the SP-500 in 2011 is 920. THERE WILL NOT BE A NEW LOW MADE UNDER 666.

A yearly closing over 1220 in 2010 was a bullish signal. This bull market should last until late 2014 or early 2015. This should be the greatest appreciation of your wealth since the 2009 low. If you choose to try and short the market and not receive this gift that's up to you. I'm scaling into long term long positions for my IRA and my trading account.

On a side note, the Australian Dollar should also aprreciate during this timeframe. I have a bank account holding AUD. I sold half of my AUD when it reached 1.10 v. the US Dollar. I'm now rolling that half position into gold and holding the other half in AUD. I will sell that position when AUD/USD is at 1.76.

Here's my long term chart with annotations

NOTE ANNOTATION IN LOWER LEFT CORNER!


And here's my weekly cycle chart

It's Time To Buy

I apologize for my absence as of late, I've been dealing with some family issues. People are becoming extremely bearish as of late and that has me in the buying mood. Looking over a few charts tonight made me turn even more bullish near term. At least we can catch a sizable correction to the upside if not an entire bull move. The first chart getting me in the buying mood is that of the McClellan Summation Index. It recently broke below my bull support line, but is in an area where it has reversed some more.

You will also notice that the SI is coming to another bull support zone of the downtrending white line. This has me near term bullish.

Another reason I'm getting bullish is because of the inverse correlation of the USD and the equity markets. I believe the US Dollar put in a 4th wave up and is now in a 5th wave down.

The chart shows the dollar breaking back down under the 1-3 channel line drawn off the 2. If the inverse correlation holds the equity markets should soon reverse course.

Finally, my current wave count has either 5 waves down ending C of Y in an ending diagonal yesterday, or 1 more low coming to end wave C down. If we get a new low around 1280 it would be the latter of the counts. My bearish count is also looking for a wave 2 retracement upward. When a bull and bear count align in such fashion (both looking for upside) it's a good risk/reward situation in my book.

Today also gave me an hourly buy signal according to my ADX, which means a low is either at hand or within reach. I went long on the wedge break today and will add to my long position on new lows.

Thanks for reading.

geno0010

The

Trader

May 28th, What Really Matters

This past weekend the love of my fiance and my life passed away at 16 months of age. Within that time I have learned more from a dog than I could've in a lifetime listening to teachers, preachers, bloggers, etc. Sometimes in life I was more focused on the market than either my fiance or my puppins, so I would like to take this time you remind you of what is really important in life. I love playing the market, but personal relationships are WAY more important than money gained or lost. My pupppins actually stepped on my keyboard one time and entered a trade. She lost $300. She never did pay me back.  On this Memorial Weekend I think it's important for everyone to reflect on their lives and the people and animals who influenced it. I know my puppy made me a better man than I ever was, and that's important for me to remember.

As of the market I really don't care right now. I was looking for a correction to 1308/10 and the 1311 low should've satisfied that. I'm still looking for 1390 or higher.

Take care everyone and remember that making money is probably the least important aspect of life. People or animals don't love for money, they love for you, in your entirety!

Termination of Wave 2 before Wave 3 up

I had to slightly alter my count based on the price action recently. The move up to 1370 seems to only have completed wave 1 up of the ending diagonal, with wave 3 up to 1390 to follow. After the I'll be looking for completion above 1400. Here's is my updated daily chart of the SP-500:

This move down has been impulsive: An impulse A wave consisting of 5 waves, a 3 wave B wave back to test 1360, and now we're in the final impulse wave down, the C wave which will finish red wave ii down on the daily chart. Now let's zoom in to a 10m chart to view how this wave ii down has unfolded and how I plan on trading it.

So far I'm counting this as an impulse A wave and we're in the final impulse C wave. This can also count as a completed WXY down where Y=X today to complete wave ii. That is why I bought June  IWM and SPY calls today. Going with the impulse count looks to me like we put in 4 of iii with a 5 of iii down to the 1308/10 area to complete iii of C. After that we'll probably get another bounce up to the 1325/28 area before the completion of the C wave. I will be adding to my call collection at 1310 and finally around 1295.

Until next time,

geno0010

The

Trader

Whipsaw Nation & Trendline Support

This will be the first post of many which lead into you my swing trading intellect. I have been watching the hourly and shorter term charts whipsaw for a few days now. My previous call at 1350 was for a top to 1370 then a pullback. That happened nearly perfectly with the market topping at 1370 and change. The pullback I expected was to 1240/42, so I established long positions at that level. When the market dropped further I didn't fret, I added more long positions after I looked at my original anlaysis and deemed it correct. I sold out out of this position on Tuesday and have been in cash. (Tuesday 1358).

Some would say I missed this drop. I disagree. Per the stock market all gains made on the short side should be considered a bonus in my opinion. Also, I knew the drop was coming since I sold my long position. YOU DON'T HAVE TO PLAY EVERY SWING TO MAKE MONEY!!! You want to be on the longer term side of the swing!!

I believe these tops & drops are part of a consolidation pattern and I don't think we'll see new lows under 1329.

My next projection target comes around 1389.60 as long as 1329 holds. I am flat position wise and really don't plan on playing anything until my upside projection targets are met, or something on the short side triggers my interest. If anything happens you'll be the first to know!

POSITIONS: FLAT...NO LONGS EVER, maybe short under 1329.

Until next time,

geno0010

The

Trader

PS WATCH HORIZONTAL WHITE AND UPTREND YELLOW