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« When To Go In (2) UPDATED | Main | Sentimental Gurney »

Monday, November 24, 2008

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Wave Rust

Yelnick,
I don't think Oct 10th was that bad. for me, it was sep 17th when the 90 day went to.1 and closed at .2%. that was as close to the financial world stood still.

oct 10th was just a retest of that low.

sep 17 was the only time the markets have ever scared me. october 10 was soft landing and bounce, all in day's work.

wave rust

MT

Well STU's count could be right, but I give it value if DOW is able to break the red support line of the ABC triangle (see chart). If so, I will go on with the grey alt count. My question is, was the ED count the alt count of STU or did it show up as a rabbit out of the head?


http://i366.photobucket.com/albums/oo106/mtcharts/A.jpg

deacon

neely talking +20% SP this week yesterday:
(http://www.traders-talk.com/mb2/index.php?showforum=45)
..thru todays high +14.5% thus far since friday's 6 year low

Canadian Money

This morning I saw evidence of "the robust rally" having possibly ended. It may have just been a relatively small simple abc zig zag.

As always this is just one possibility.

On the longer term view, I think the ED interpretation is stretching the EWP way too far.

CM

Eventhorizon

Yelnick: "When we run out of things to save, maybe we recover ... "

I wonder if when we run out of things to save we finally collapse. When there is a gaping hole in the boat it is possible to patch it; when the wood is rotten and there are a million pinprick leaks it is time to abandon ship!

Your blog has been simply outstanding the last couple weeks.

yelnick

MT, they pulled this rabbit out of their hat! They had a possible ED in the truncated-fifth count, but at a lower degree. But they gave no hint of this until the end. You and 737 were way ahead on it.

You alt is where I thought they would end up - the wave 4 was an ABC flat to 11/3, and the drop was a fifth wave of fairly short length and time. In either case we end last Friday and are on a new trendline ... unless you want to posit the more extreme case that this was merely wave 1 down of 5 and we are in a wave 2 reversal? If so this wave 2 might go back 62% or to ~SP900 then a big bad wave 3 of 5 commences.

yelnick

Event, thanks for the kind words. Lots to discuss recently and really good comments. As to what happens after the last bailout - there is an advantage to bailing out banks, since they provide financial fuel for Main Street - but little value in bailing out GM and their ilk, since that just prolongs the distortions which took them to the edge in the first place. When the bailouts end, we are more likely to recover than fall further, since we have been falling while bailouts go on to the left and right of us. So how have the bailouts prevented the stock drop?

An imperfect analogy is here:

http://online.wsj.com/article/SB122757149157954723.html

which shows that short term 'stimulus' or rebates fail to change behavior and simply pile debt on debt. A lot of the bailout thinking falls in that category, of layering on more debt to "keep the economy going" rather than taking the pain and restructuring. At some point the willingness to saddle our future with debt to prop up the past will end, and with it the downturn.

Case in point: Japan for 20 years, which has yet to take the pain.

yelnick

Deacon, Neely may be right. From late Friday to Monday - maybe 7 trading hours!! - the Dow went up 15%. Pretty good money if you got out! The current fade seems like a wave b on an abc zigzag up, so if we fall 1% then rally 6% you got your 20% rise in about a week. Even if the b falls 38% or 5% of the 7 hour runup, a final 10% rally (61% of wave a) and we hit Neely's 20%.

yelnick

Wave, great point! The early look into the abyss was the "point of recognition" of how bad things were. A negative interest rate! Who woulda thunk!

Contrarian question for you is: should the Fed raise rates right now? Lowering them is not causing the banks to lend - the classic liquidity trap. Everyone seems to believe that lowering rates makes things better, presuming that high-interest loans can be refinanced with lower rates. Actually, lowering rates makes refinancing more problematic, since the older higher-interest bonds and notes rise in value and one has to borrow more to pay them off (if they do not allow early payment without penalty). Risk of default on the old stuff goes up. Hence the true value of bank loans actually drops. Either refi and take a loss, or stick the borrower with high rates and risk default. Such a deal!

Howard

Legendary investor Jim Rogers last night:
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vJzshG4o708g.asf

MT

" unless you want to posit the more extreme case that this was merely wave 1 down of 5 and we are in a wave 2 reversal? If so this wave 2 might go back 62% or to ~SP900 then a big bad wave 3 of 5 commences."

Yelnick, your and Neely's view could be the outcome. Today A ended, a pullback into B and a final short lived C to complete wave 2. If so, a great short opportunity is upon us. Yelnick and others thanks a lot for the good and frequently information and input.

Wave Rust

MT,
maybe B ended just before close. tomorrow is the beginning of C and friday open is the end of C

as I said on comments on yelnicks last post, i still think the ddrop could get extended and pushed out in time toward xmas.

still a great short here if the market can get it up high enough to get everybody bullish,,, maybe as high as neely says.

wave rust

Suzy

Id the ED is correct, it is not in the twisted form STU show. Their end to the ED could be simply wave C completed which "looks" better. Now we have wave D finished or finishing and then final thrust down to complete. Not saying that is correct, just that STU are more than likely wrong - again!

Ham Actor

MT's view of another leg down in a diagonal 5th certainly fits for the Bradley date of 14 December.

I'm on the sidelines now for the first time since May and will remain sceptical of the bounce until the above time frame.

If the (3) is in fact over and we are in (4) then I will look to buy a lift out of a b wave retracement at the start of c.

yelnick

Suzy, 'tis plausible that we are still in a downward triangle, and are in leg e of it. What matters is if we have bottomed or not, or more precisely, what is the downside risk from here compared with the upside potential? Both Neely and the STU believe the large wave C down is not over, and hence after some form of rally - really short (leg e), middle (Neely X wave) or multi-week to multi-month ave (4) (STU), we fade down again and break the recent lows. Sy Harding's seasonal pattern says we should be relatively safe until Feb/Mar. Pick your poison.

Steven_737

Ending diagonal divergence and VIX

Yelnick,

Thank you for your kind words;

MT, your ending diagonal has merit; indeed it is plausible. I am watching price action with keen interest.

The only observation that reduces its probability to occur is the rsi and macd divergences:

http://farm4.static.flickr.com/3029/3059930998_c77f9ce79f_o.gif

Then again, when divergences fail, the continuation move is strong.

I am not an expert on VIX behaviour; but VIX has displayed divergences as well, implying that the probability for large moves is diminishing; a lot of technicians correlate that with higher probability for the end of the down wave.

But at those levels of VIX, maybe the correlations are weaker.

http://farm4.static.flickr.com/3016/3059098049_25c9c4f712_o.gif

I am investigating the VIX behavior, so as to have another technical tool when at crossroads of alternate Elliott wave counts, in the future.

MT, are you using indicators to support your count?
if so, which ones?

cheers.

Forkoholic Serge

Experts on stochastic anyone? I found fascinating fact - recent

STO on CPC look like a spike where black line is 2x faster vs red

line. So I decided to check when we had such spikes in the past -

looks like only 3 in past YTD. Also on CPC itself note green dashed

trend line was penetrated both times and at the line right now. in

first case we rallied 2 more days and dropped to retest low in

second case we continued to drop immediately. What do you guys

think?
http://forkoholic.com/images/CPCstudy112508.jpg

Hank Wernicki


Exactly Pick Your Poison !

Do we really need EW ?

Comments ?


yelnick

Hank, we need more than pattern recognition. Man is really good at that and it misleads. This is the core of why I have watched wave theory for years - the hope that it is something deeper. Still but a hope! At times it seems to work. As now. Now, fractalizing waves and bringing the theory into the age of complexity/chaos theory is a great direction to go in - the direction you are investigating. I do not comment on your stuff as much as I should - it is a lack of time (this blog is a hobby not a profession!!) not a lack of interest or respect for what you do.

Canadian Money

The possibility of the rally having ended was still a possibility at end of trading today. A possible small irregular wave 2 nearing completion for both DJIA & SP500.

If true, wave 3 downward coming soon and wave 3s that follow irregulars can be powerful.

As always this continues to be only one possible future.

CM

Hank Wernicki

Duncan,

IF Elliot found a fractal construction that BP and STU uses and Neely formulates his grand theory or call it what you may, why not just go with the pure fractal ?

I totally ignore all the theories because everyday one can do a fractal count ( and there are so many that Elliott did not mention ) and map the direction with uncanny precision.

Precther a few times attempted his own inclusion of unfounded fractals when things were not working aka elliott wave. This alone tells you something.

In Terms of trading if you were reading the triangle assumption and were short <<<<< and then what happens when now we have a ED and you are forced to cover and go Long ..

I think that's an insane path to drop alot of money on the table AFTER THE FACT.

Doesn't help me one bit

Happy Thanksgiving !

Hank Wernicki


Hank Wernicki

TYZ8 Top 121.1719

KRG

Hank :
I think EW adds a very fine structural dimension to other Technical Analysis. In my opinion, for trading purposes, it could be particularly useful in ending diagonals and in the last stages of a 4th or B triangles. At other times, perhaps you are right. A trading call cannot be made on an anticipated count and by the time the count is clear, it is too late for an entry or your are already anticipating the next move.

Since many of us try to anticipate before we participate, subjectivity is bound to creep in. If the trading entry is close to the stop levels, at least the losses can get limited. Else it may be better to stay out rather than put a lot of money on the table even if your forecasts turn out right! That is one reason why I think Neely scores way above EWI

On fractals,I noticed that you gave some great calls; Cann't however figure out how to get these in real time to get precise results as you say.. may be you could throw some light

Cheers

Rogue Poster

I got a crossover on the smart/dumb money indicator today with a high angle of attack. This is a very reliable indicator. Typically a crossover results in at least a week long rally if not a multi-week rally. Bears take note.

rs

Has anyone noticed the Wave 5 developing on 30 year bond futures? This is worth watching for a short opportunity! Any comments from anyone? The rally began a few weeks ago....

martin

What the #^£$ is the smart/dumb money indicator!
It made me laugh anyway, and Dow Predator, you could turn out to be right to be bullish - and after all the cruel remarks gthat were made recently!

martin

Is this the 'wallstreetcourier' smart/dumb money indicator
or one of your own indicators DP?

I like the idea of fractals but man has been seeing 'patterns' where there aren't any since time begun. I am no expert on EW but it seems far superior to just looking for repeating fractal patterns.

I know people in the UK who have used EW successfully, but not fractals on their own, except for one man and he actually made his money selling fractal information to punters rather than fractal trading.

Hank Wernicki


KRG An introduction will be published on Market Fractals soon ..


Today : http://www.elliottfractals.com/front_page_11_26_08.jpg

Hank

KB

Whether information you are selling fractals or Elliott Wave or whatever you need to keep attracting new,fresh meat(suckers) to replace the old ones who wise-up and move-on.

Steven_737

KB

Let the man speak.

I come to these blogs to find technical analysis information and pointers that may interest me or might be of use to me.

This is an Elliot Wave Blog and this is the kind of material we expect people to be posting about.

If Elliott Wave / fractals is not your cup of tea, there is no need to tell Hank that he is looking for suckers.

You might as well ask that the books by Prechter and Neely to be thrown to fire and be banned from Libraries!

On the other hand, if you read the introduction on Market Fractals and you can point to flaws in the methodology, I am really interested to hear your criticism of the method.

To end on a positive note, which are your favorite trading books?

Happy thanksgiving.

Steven_737

Hank.

Martin has a strong statement.

"I am no expert on EW but it seems far superior to just looking for repeating fractal patterns. "

Would you care to explain why you consider fractal patterns better than Elliot Wave??

Thank you

Happy Thanksgiving.

Steven_737

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@
@ . . . . . Yelnick and fellow wavers
@
@ . . . . . HAPPY THANKSGIVING to all.
@
@ . . . . . Take care.
@
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DG

Whether information you are selling fractals or Elliott Wave or whatever you need to keep attracting new,fresh meat(suckers) to replace the old ones who wise-up and move-on.

Posted by: KB | Wednesday, November 26, 2008 at 06:02 AM

This doesn't make any sense, really. The amount of money a person can make from actually trading well DWARFS the amount of money someone can make selling crappy recommendations and churning subscribers. And the amount of money one can make from a "regular" job is likely to be greater than the amount of money one makes publishing a struggling newsletter. Hell, just go work in the marketing department (since it seems you think these guys are good marketers and nothing else) of any Fortune 500 company and you'll make $60-70K a year by the time you hit your 30's for a pretty cushy office job. I doubt 1 in a 100 e-wave newsletter guys make that much from subscriptions.

And where exactly are these wiser individuals moving on to? Buy and hold? That's not a trading strategy, that's a 401(k)/IRA strategy, and even then, you have to start young. T-bills? Sure, if you like 1% real returns. What, exactly? You seem to think you've got it figured out, so let us peons in on your secret, eh?

I know people like to sound oh so smart by seeming cynical about the financial newsletter industry but use a little common sense, too. 99 out of a 100 failed traders screw themselves by not following rigorous risk management techniques. The day I learned that risk management was the key to trading success was the best day of my trading life. I only wish it had also been the first day of my trading life because it would have saved me a lot of red ink.

For the record, I think Neely's the best wave theorist out there right now and even though I don't know anything much about "fractal"-based trading, I highly doubt it's an improvement over Neely's methods in terms of accuracy, although it does sound like it's a simpler method, but "simple" is not my key decision factor.

Ron C

"The amount of money a person can make from actually trading well DWARFS the amount of money someone can make selling crappy recommendations and churning subscribers."

The key word there is "can." Theoretically, you can start with $500 and become a billionaire in a few weeks. But most people don't do this. Most traders go bust because it's worse than a zero sum game; it's a negative sum game because your broker takes a commission.

I suspect that newsletter writers make more money selling subscriptions they they do trading. I suspect that Prechter and Neely and Eliades et al couldn't make a go of trading for a living.

DG

Ron C,

Unless Neely is lying, he is trading his own forecasts, because he says things like "My fill on that recommendation was X". Also, and I keep bringing this up, he continually shows up near the top of Timer's Digest. You would essentially have to assume that even the top timers can't beat the market as traders for him not to be able to trade for a living. This is possible, because trading and timing are different, especially if you are the type who doesn't like to admit you're wrong. Again, Neely tells you where to put your stop as soon as you enter the trade, so why wouldn't he be doing the same thing and cutting his losses in the same way he tells his subscribers to cut theirs? Neely has also been very upfront in his "Question of the Week" section on his website on how difficult it is to translate wave analysis into trading success.

Also, I would encourage you to do some Googling and see what the Internet has to say about whether Neely has been successful as a trader or not. Again, I wasn't there, so my ability to verify is limited to what I see in the archives, but what I've read is actually very encouraging on this score.

Finally, Neely (and the others you mention) aren't stupid people. I'll say it again in case you missed the implication I was going for: These individuals could EASILY get jobs that pay more than "wave theory newsletter writer". Well, Neely could anyway. His website's traffic is so low that www.quantcast.com doesn't even track it (which probably means he gets less than 5K hits per month), while EWI gets over 40K hits per month. Translate Neely's 5K hits, which I swear is too high, into subscribers and you get, what, 500? He's got 8 people listed as working for him and each has to be making $40K/year, which means he's got a $300K/year cost in salaries. An office for 8 people probably costs $3-4K per month in California, so that's another $40K/year cost. Let's say he's got another $60K/year cost in employee benefits (remember, these other people don't HAVE to work for him, so he has to pay them competitively or they'll go work for some other company) and another $30K/year in technology, electricity, marketing, etc. We're almost up to $450K in costs.

He charges $12/month for his "Forecasting" service and $30/month for his "Trading" service and he's got 4 markets he follows.

He need about $40K/month coming in from these services, so he needs about 1500 subscribers at $30/month. His website gets less than 5K hits/month. Unless you assume that over 30% of the people visiting his website are subscribers, his subscriber base CAN'T be much more than 2000 or so (counting the people who aren't visiting the website at all). At $30/month, that's $60K in subscriber fees per month. Minus $40K in expenses per month, he's making $20K/month. That sounds like good money and it is, but are you going to tell me that he couldn't get more money working on Wall Street? The guy CLEARLY understands markets and finance. I know guys making that much on Wall Street who are essentially clueless herd followers. Simply put, in order to cover his "opportunity cost" of not having gone to Wall Street (his bullishness after the 87 crash alone, if he'd been working a trading desk on the Street, would have gotten him a 7-figure bonus every year until 2000, when he became bearish, which would have earned him another huge bonus if he'd been on a trading desk and advised them to short the market). I make no claim to pin-point accuracy with these numbers, but I think I've covered all the major variables and shown that unless Neely is a fool who just likes working for himself and not "selling out" to Wall Street, he clearly has to be making money from trading in order to make maximum use of his "human capital".

Prechter is in a different category because he's the best-known in the market, so his name recognition probably does lead to better cash flow from his newsletter business.

It's amazing how people's biases come out when they don't have concrete information or take the lazy way out and don't think through the issue at hand.

MT

I adjusted Yelnick's extreme case to a moderate wave 4 of Wave 5 instead of his Wave 2, see chart. But I watch closely the unfolding now. My alt is also still on the table (we saw w5 11-21 ?)

Wave Rust your C is possible, watch the 910 zone = 62% retrace = also Neely's expectation. Maybe the odds are now in favor of Neely instead of Prechter.

Steven, yes I use indicators. Later on I let you know wich I prefer and are working well for me. What are your EW thougts at the moment? I can't recognize a real intermediate lasting bottom at 11-21.

http://i366.photobucket.com/albums/oo106/mtcharts/w4ofwave5.jpg

Within a few day's we know the answer.

RonC

DG, thanks for your reply. You write: Finally, Neely (and the others you mention) aren't stupid people. I'll say it again in case you missed the implication I was going for: These individuals could EASILY get jobs that pay more than "wave theory newsletter writer"...


Few people pick jobs because they think they'll make the most possible money. Jobs have a lot to do with people you know, people you work with, connections, visceral perceptions, childhood perceptions, present obligations to employees, co-workers, etc. In short, jobs, like tumors, cultures, and markets, evolve. They're historical processes.

I don't have time to try to verify how much Neely trades and what his record is. I'm content to suspect that he would do about as well as anyone else (that is, he'd tend to lose money over time). I suspect that someone who found a successful trading method would want to keep the method a pretty closely guarded secret until he was a billionaire... which I suspect Neely is not. Or maybe until he found out he had a terminal illness or hit his 100th birthday or something. I don't think newsletter writers are much motivated by a desire to make the rest of the world rich; I think they're motivated by a desire to make money, themselves. And, again, I think newsletter writing would be folly or self-defeating or, at the least, a waste of precious time if you, in fact, had durable tricks for making money in the markets.

So, while I'm not totally confident of this, I think Prechter and Neely and Eliades and the rest of them are bunko artists.

Ron C

By the way, I don't see a lot of people on this forum talking about how Prechter or Neely made them rich. Any testimonials?

And it's cool if you've kept your money in cash because you followed Prechter's advice. But what opportunities have you missed? And, mind you, everyone, Prechter's has lots of different advice and lots of different predictions. You could just as well have lost money following Prechter's advice as made money. He claims to help traders, not just the most risk-averse and long-term horizon people.

I saw him on Bloomberg and he was talking about helping people and I really think that's disingenuous. Who's he helping? Traders? I doubt it. The first people out the exit door? Well, then he wants his cake and wants to eat it, too. What about the masses who will inevitably still be in the burning theater? It does most PEOPLE no good to scream "fire." The markets are very perception-driven. He should keep his panic to himself, make whatever bets he wants to make, and shut up.

And maybe he is stupid. I mean, do you really want to be fat and happy and saying "I told you so" when the world has collapsed and people are penniless out of work and hungry??? He's a schm-ck. They all are, those cocky parasitic newsletter writers. Go make something. A new kind of band-aid. A more comfortable shoe. Open a great restaurant.

Snake oil salesmen. Probably live a life of tremendous rationalization and denial to pull the nasty stuff they do. Look, there are probably worse people, but they're pretty bad.

Upstart

rs,

Good point on the bonds. I'm going to watch it.

Stocks everybody: Remember an ending diagonal implies quick reversal back to where the pattern started...and we're well on the way.

Steven_737

Upstart,

"Remember an ending diagonal implies quick reversal back to where the pattern started...and we're well on the way."

do you have a reference to that?
I have not seen such a statement, so I do not remember such a trading rule.
You are probably referring to triangles, some people think so.

Please indicate or explain.

cheers

Steven_737

Hello MT,

I just looked at the weekly chart, that displays rsi divergence,
and a bullish engulfing candle.
No divergence on weekly macd though.

Regarding Elliott wave analysis, I do not have any additional thoughts.

Daily close is slightly above ema(20).
This is a make it or break it Level.

We will have to see Fridays price action.

cheers.

DG

I'm content to suspect that he would do about as well as anyone else (that is, he'd tend to lose money over time). I suspect that someone who found a successful trading method would want to keep the method a pretty closely guarded secret until he was a billionaire... which I suspect Neely is not. Or maybe until he found out he had a terminal illness or hit his 100th birthday or something. I don't think newsletter writers are much motivated by a desire to make the rest of the world rich; I think they're motivated by a desire to make money, themselves. And, again, I think newsletter writing would be folly or self-defeating or, at the least, a waste of precious time if you, in fact, had durable tricks for making money in the markets.
-----------------------------------------------------------------------------------------------------------------------
Ron C,

Neely claims he made over $1.6 million on a single trade back in 1986 on the Australian dollar. In 1987, he called both the crash and the recovery, saying the 1987 low would never be seen again in his lifetime. You think he went short then long then, using whatever was left of that $1.6 million? In the early 90's, he apparently won a 3-year long public trading contest. In 1995, he was calling for the S&P to hit 1500. You think he stayed long then? In 2000, he was bearish and claims to have put his mother in a hedged portfolio in 2000-2003 that made her over 50% during the bear, so I'll assume he did the same for himself. He's been shorting the S&P since last October, including nailing the last dump into new lows we've had recently. He called the final uptrend of the gold bull in 2007 and the end of the bull in 2008 (he shorted gold a few weeks ago and made over $200/contract). He called the end of the Euro bull this year. Did every single trade in between work out? Now, I'm not the guy's accountant and on the earlier items he could be lying his ass off, but so long as he cut his losses short and let his winners run, he had to have made more than a few bucks trading, wouldn't you agree? Oh, yeah, and Neely's 20% S&P rally from Friday's low is still trucking along, although, to be completely accurate, he missed the first 6% because he was waiting for confirmation of his count, so he's only up about 10% from Friday afternoon.


If you "don't have time" to check out someone's track record, maybe it's just better not to opine on it? Otherwise, you end up overlooking the exception that doesn't fit your general rules about newsletter writers and their ability to trade, which I agree with by the way. That is exactly why I don't subscribe to any newsletter other than Neely's.

And don't underestimate the intellectual satisfaction that comes from other people knowing you're right about something. Neely seems to make the assumption, rightly, I think, that even though wave theory is the best basis on which to make trading decisions (as he says, wave theory tells you exactly when you are wrong, letting you keep your losses small. Why that is the best basis on which to make trading decisions is a whole different conversation, but if risk management really is the key to trading success, wave theory is the best risk management system out there, if done correctly), not everyone is going to do so. I can't tell you how many people I've seen posting online things like "I can't figure out Mastering Elliott Wave to save my life" or "I'm just going to trade the way I've always traded, that stuff's too complicated" or, as you say, "All those theories are full of crap", so I think his methods also run up against many people's cognitive limits (they're too stupid to piece together all 69 pages of rules you need to memorize) and patience limits (they sacrifice accuracy for ease) and skepticism. As I said in another thread, everyone knows that to give yourself the best shot at living a healthy life you need to eat right, do a moderate amount of exercise and avoid overindulging in vices, yet what do we see in the news? An obesity epidemic caused by not eating right, not exercising and a myriad number of arrests and lives ruined due to people indulging in various vices. So, even if the keys to success are handed to people on a silver platter, that doesn't mean they'll be successful.

This is all just my opinion, yadda, yadda, yadda.

Rogue Poster

Martin,

SM/DM is a pejorative term that often rubs people the wrong way but it's how most people casually refer to this indicator. I don't think it's all THAT rare. I have two S/W packages which feature this indicator. It is perhaps inaptly named but "Smart Money" is the colloquial term for "institutional money" or "big money" versus "dumb money" which usually refers to retail investors. I don't really know what makes it tick. When I asked I was told it was a proprietary algorithm.

RP

DG

"By the way, I don't see a lot of people on this forum talking about how Prechter or Neely made them rich. Any testimonials?"

http://www.neowave.com/company-testimonial.asp

The mistakes I made when I was trading with Neely in 2006 and 2007 were my own and I see that now. Now that I've gotten a deeper understanding of trading and what it requires (reading Confessions of a Stock Operator definitely was key moment for me), I'm trading along with his recommendations and making money. I'm not going to blame Neely's methods for what were my own screw-ups (position-sizing, mostly).

Ron, the way of the world is that some do and some get done to. That's the way it's always been and always will be. Best to hunker down and try to protect those you love from the storm.

Upstart

Steven_737, I will look it up later...not at home right now. I think that is in EWP. The ED is supposed to give dramatic reversal back to where the diagonal began, I believe.

Steven_737

Upstart,

I found it on page 38 of EWP, (2005 edition)

Thank you.

"A rising ending diagonal is usually followed by a sharp decline retracing at least back to the level where it began and typically much further. A falling ending diagonal by the same token usually gives rise to an upward thrust."

I had in mind the thrust of the move but not the target.

Too many Fibonacci retracements and target projections can do that to you.

Thanks again.
Take it easy.

Ron C

Yeah, I appreciate the thoughtful comments but I don't believe Neely makes much money trading. I might be wrong but the newsletter/subscription stuff just doesn't jive with being a really successful trader, if such a thing exists. Most people who get rich off the markets were lucky early and then starting commissioning other people's money. Survivor bias and a long bull market will make people rich. Anyway, best of luck to you and my advice --which I need to follow, myself!-- is to try to get good at making or bettering something real. This market stuff is destined to morph out of any model you concoct and, at the end of the day, leave you feeling a bit empty. Good luck, God bless.

Forkoholic Serge

> The amount of money a person can make from actually trading well DWARFS the amount of money someone can make selling crappy recommendations and churning subscribers.

You forgetting about RISK :)
Plus you do analysis anyway - why not share it and get paid for it?
Plus you get more people sho trades in your direction - I always want more people on my side of the trade ;-))

Rogue Poster

Ron C, your thoughts on newsletter writers resonates with me--to this group I would add all the pay-for-use chat room operators. Some are clowns. Some are duplicitous and deceitful. Some are disgusting parasites who will ram their ovipositor down your throat and turn you into a cash dispenser. Almost all of them are just basically bad*. Suffice it to say that I have canceled every single newsletter and chat room I previously subscribed to.

*Be especially cautious of charismatic individuals. Charismatics who make splashy presentations are by far the most dangerous and will do you the most harm. Youtube is loaded with them.


DG

Forkaholic,

I agree with both of your last two points. Again, the logic of the "transaction" between a good trader and the people acting on those recommendations, if that trader is also selling a service, actually leads to an alignment of interests between the trader/newsletter writer and those following the trader's recommendations AGAINST "the rest of the market", whose money they are trying to take.

I love it when EWI has a take on the market contrary to Neely's. It's like money in the bank!

Ron C, I actually do have a job in an industry that I think does a lot of good for people, so I'm pretty set there. I'm just a man trying to feed my family, so to speak.

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