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Friday, September 25, 2009

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EN

Looks like a fall and a bear flag to me. Got a daily sell signal with the Friday close below 1045.

Sherman McCoy

My smoothed Donchian crossed negative 5 days ago after generating an 11.6% gain in 41 trading days in its most recent bull trend. While this is just a short term model, it says you're silly to still be long.

What are you waiting for, approval from your Mom to go short? Or, maybe you 've been stopped out so often you're gun shy? The funny thing about slavish followers of the putative heirs to RN Elliott is they can't accurately call a top. Ralph regularly nailed tops to the day and to the price peak.

Cary Lloyd

How come Ralph died broke?

Willie Wonka

Daneric has been so absolutely WRONG for the last 140 SPX points UP that he has lost all credibility. The guy doesn't even TRADE for christ's sake! That is, unless you actually count getting in and out of a $1.50 stock like E-Trade Financial. LOL!

In fact, week before last he changed his count from P3 to P2 and then back to P3 all within a 24 hour period. I would suggest that he's nothing but a "Perma-Bear" with a bunch of college aged kids following and posting on his blog.

vipul garg

sherman , are you now saying that you are unable to nail the highs and the lows with elliott?you are losing form man.

also now that you are short and not silly long like most of us are , based on your crossover system , can you elaborate on stops and targets.i just feel like following you on this trade and hopefully make some money.

DG

My smoothed Donchian crossed negative 5 days ago after generating an 11.6% gain in 41 trading days in its most recent bull trend. While this is just a short term model, it says you're silly to still be long.

5 days ago? Amateur. This is what I wrote about the SPY target price on the Neely subscriber blog on Wednesday morning:

"108.62 was the original "waterfall effect" calculation and the high so far is 108.06. Since there is at least one spike upward after the Fed (typically), regardless of whether or not the market sells off on the Fed, I wouldn't be surprised to see that target hit."

The high, adjusted for the recent SPY dividend, was 108.54.

george

vipul,
here is the trading system
that sherman is using:

Donchian breakout trading system example (4 week rule)


The 4 week rule was developed by Richard Donchian and has been proven to be an effective base for many profitable trading systems. The original rules were used for trading commodities and can be summarized by:
1) Cover short positions and buy long whenever the price exceeds the highs of the previous 4 calendar weeks
2) Liquidate long positions and sell short whenever the price falls below the lows of the previous 4 calendar weeks

DG

I think one of Daneric's problems is that he tries to apply Elliott labels on 1-minute charts. That is bound to lead you to "premature" market calls.

Jing Chen

There is one piece of the puzzle still missing: at a major top, the breadth should be narrow. So far, that has not happened. Therefore, the top is not in yet.

Now there are many ways to measure breadth, but here is my favorite: I would like to see a major index (e.g. DJIA) making a new recovery high, which is not confirmed by other major indexes (e.g. DJTA or RUT) or sector indexes (e.g. Bank Index). At the minimum, I would like to see a Dow Theory non-confirmation: DJIA and DJTA not confirming each other.

Until that happens, I would not worry about going short or wave count details. The reward/risk ratio is just not attractive enough yet.

Thanks

da bear

The EWI alternate count would put us at DOW 10,000 for a top...

that could very well happen.

that would also give the dollar more room to run lower, and perhaps indicate how high gold will go...

da bear

DG

Jing,

That's exactly what happened this week, though. The Bank Index didn't make a new high above the September 17th high and the DJTA also didn't make a new high, while the DJIA and the SPX did.

I give a price high being in 50-50 odds, but I wouldn't be surprised to see us take another run at it in early October and have that run fail.

yelnick

Jing, the Trannies topped a week earlier and already have overlapped with the prior wave 1. The DJTA has no business even trying for a new high. You could add the SSEE which retraced 40% of the 73% decline from Oct07 from Nov08 - Aug09 and have since tumbled. The SSEE made a lower high on Sep18 while the DJIA made a higher high. And breadth in July/Aug was really narrow in that 5 financial stocks made up over 30% of the action. Even f the DJIA makes a higher high in Oct (best target is around Oct9-15) at slightly over Dow10K it won't be that much upside (4%). Why take the risk? The old adage is:

bears make money
bulls make money
pigs get led to the slaughter

yelnick

Daneric may be making his way as an ewave analyst and missing some calls on the way but I posted his chart for two reasons: it tracks closely to the STU count, and Daneric is brave enough to lay it out every day for all to see.

RangeFinder

Here here! I'd like to see many of those here who have been quick to criticise Daneric, step up and chart to the standard he achieves.

I personally think the top is in and that Monday will bring a shocker. I might be wrong - I often am but there's something not right about the tape and my money in on P3 being with us right now.

If it goes higher - great - more altitude to short from - if not we're in the DZ and my parachute is on and ready to deploy.

See you at the bottom.

DG

Yelnick,

I think it's clear that Daneric has a great work ethic. It takes effort to put all those labels on the charts! I also think working at lower, more frequent, timeframes gives you the one thing that all wavers need: practice. I do hourly charts with NeoWave even though Neely says they aren't going to be as accurate for trading as longer-term charts, which conforms to standard theory about multiple-time frame analysis, i.e. that higher timeframes rule. So, it's a trade-off between getting the necessary practice to do good wave analysis and potentially lower levels of accuracy at the smaller timeframes. Over time, you come to a balance as a trader. Unless you get free commissions on your trades, though, it's important to recognize that your fixed cost per trade is a factor in your returns. This is where Livermore's discussion of how he went from being a good trader, focused on each little movement of the tape to being a great trader focused on catching the big moves, is so important to understand.

I saw in Daneric's comments section that someone claiming to represent an asset management firm was talking to him about a potential job, so he's doing something right.

Also, hey, since I know you're a Neely subscriber, any time you want access to my blog, send me an e-mail or just let me know with a response here. I'm also laying it out there every day, although, as you know, trying to keep it private to protect Neely's stuff, which I heavily rely on.

Cary Lloyd

Talk about work ethic... I just spend the last twelve hours poring over my charts, stochastic models, and dream journal correlations! I have only confirmed one of the things I have tried to make clear: We may be going to short term highs, but they will not exceed 1200, nor will lows drop below 1000 (at least by a few points). I am not mincing words: This is a serious long-term trading range that will reinforce itself for decades. The VIX topped out less than a year ago but it will continue to drop like a stone. The bear has only entered what Wolfram described as a third class attractor and it will succumb to more negative feedback and dissipate.

If you want to make the fish/amino acid play, I'm afraid there are few ways save for mid-sized frozen food distribution. Chemical companies are simply too diversified.

The Chromium/helicopter hedge probably has some time left.

I have one other idea that I have not acted on. Beginning in October, there are several luxury hotels that will change hands after bankruptcy proceedings. The linen and toiletry supply companies might remain the same, but contracts will be negotiated. Several tissue and toilet tissue companies will be under pressure as other divisions (including paper and corrugated cardboard) are sinking fast. There are a few ways to play this, but one would be to short big hotel service companies while going long warrants for commodity sensitive toilet paper suppliers etc.

The charts are not promising but dreams I have had since 2007 suggest an inflection point to say the least.

psycho_puppies

"while going long warrants for commodity sensitive toilet paper suppliers etc."

You want us to buy US savings bonds?

Wave Rust

it's a 4th, already!

every time a real 4th shows up all but a few (DG, min, duncan) here start losing all perspective. then all the counts start flipping and flopping like dying fish at water's edge.

no, there's nothing wrong with looking at possibilities. but the markets get so oversold in one or two days, and then the disaster crows start squawking.

it's going to look like a real mess getting to a 5th if it overlaps by more than spx 3 or 4 points because then the compression of the new 3rd, 4th and 5th gets convulsive..

but the spx and dow are going to run fast once they break loose from the 4th. failed 5th or not, it will be the chance to get out or hedge.

your real problem is not the short term, it's the weeks after the 5th. many will be so sure of new lows (below march lows), are coming that you will miss the turn up and the resuming up trend.

why will many miss is, doubt it, short it ? you are seeing this whole rally from march in too low a degree.

it's at least an intermediate B of flat primary C. intermediate B has a long way to go, and this is only the minor A of intermediate B.

so maybe some of you can stay out of the convulsions (if it overlaps) and in cash, and just get ready to short the 5th of A in a few weeks.

see you before the low of minor B

wave rust

vipul garg

George,

thanks for the input.
i am aware of the donchian breakout : a system which even the famed turtle traders used and popularised.though i dont use it for my own trading, it has the statistical backing to be used as a potential stand alone trading system and effectively with other systems.

but thats not the import of my comment in the previous post.
if somebody has to sound high and mighty , disparage and make fun ;let them pass at least past some scrutiny.to begin ,post real time trade stamps , if not all , the trade with the most potential.
lets see how good your analysis is, forget about skills as a trader.

you always sharpen your own saw with constructive discussions.

Bollinger

Cary, it seems that you are suggesting a repetition of the period 1965-1980. I.e., small nominal moves of the spx.
Are you suggesting that spx will take heavy real losses, this time also?

Larry Coyd

I, too, have been studying the charts. Forget fish/amino acids and toilet paper suppliers. The real trades are these:

Go short household pet suppliers. As we saw with "Jon & Kate Plus Eight" having to give back their dogs, the recession is forcing households to reassess their spending, either due to job loss, divorce or the decision by the dad that it's just too hard having so many responsibilities. No more money for Fido and Fluffy. Back to the pound for them. That means no more spending on dog or cat treats. There's a nice long side trade here, too. Go long companies that manufacture medicines to treat rabies. Lots of these family pets are just going to be left to roam the streets and woods. When children see them, they'll think of their old pal Fido or Fluffy and run to pet the now-feral animals. That'll mean pet bites galore for these youngsters, who, despite the belt-tightening of the recession, will get their treatments. So, go long those companies.

Also, go long used car retailers. Yes, I know Cash4Clunkers took a bite out of these guys' business, but, what the Street doesn't realize is that means these retailers will re-tool and become used bike retailers. See, when all those people who used the C4C program to buy a car miss their payments, they're going to need transportation. Unfortunately for them, their credit will be so bad due to the missed car payments that the only thing they'll be able to afford is a used bike. The retooled used car dealers will be in the best position to meet this need. So, go long those concerns. Also, go long any motor oil manufacturer who also manufactures bike lubricants. Again, the Street won't see this cash flow wave coming, but those people buying the used bikes are going to have to maintain them. Nothing worse than riding a bike with a squeaky chain to a job interview!

Cary Lloyd

Larry, your name bears a certain hint of a resemblance to mine. Are you tweaking me, mate? My suggestions were legit, even if you disagree with them. I take it yours are apocryphal?

Hank Wernicki


Sunday September 27th
9:30 am

There is a clear instance for a bottom on the ES December Contract.

Tonight go Long --- ( only if the close holds at 1041.25 STOP )

9/10 30M Child


Larry Coyd

Cary,

I'm insulted that you'd think my suggestions are apocryphal. The air-tight logic, combined with my own dream analysis, belies the very notion! I'll kindly ask you to apologize for even suggesting such a thing.

Also, go long footwear manufacturers who have a large proportion of their sales from household slippers. Increasing unemployment means more people sitting around the house. They're not going to sit around the house in dress shoes, are they?

Dreaming

Good one DG.................I mean Larry

Scotty

Yelnick,
The STU Finally has it right.
Push to final top by the 8th 1122 to 1149. My original 9-25 high is obviously a low.

Gannsecret

vipul garg

yelnick,
in the chart of daneric or third chart in your post,
what kind of structure is wave (iv) in black? an ' a-b-abc'?

attempt to wave count on spx, dow at 5mn ,1mn kinda chart is not possible.in the daneric chart there are so many flaws that i will not even attempt to do it.just as an example : wave iv in black has blue a-b-c which is two degrees smaller than wave ii in black but takes more price and time both.and so on

i havent seen danerics work but i am very sure that it is not possible to have a logical and sustainable wave count on spx on such a small time frame.

it is really difficult to understand why is it continously being attempted .the logic doesnot go into my thick head perhaps.
no wonder ewavers on most trading blogs enjoy such a glorious reputation.

DG

"Following shorter and shorter time frames for trading requires you have a progressively greater understanding of the Wave Theory and a 'warehouse' of memorized information at your disposal. The shorter the time frame followed, the greater the likelihood one of the many important, but subtle factors necessary for proper Wave analysis will be overlooked in the rush and excitement of the trading day. We could call this the 'Elliott time crunch'; everyone is subject to it, some more than others. Guard yourself against the danger of trying to trade with the Theory over shorter periods of time than can possibly be handled. If you do not, adverse and unexpected market action will cure you of the habit."

MEW 2-9

Scary Boyd

Trading over longer time frames is just as useless. Elliott Waves have never guided people to fortunes, unless they are selling subscriptions. Ralph Elliott died poor.

DG

Trading over longer time frames is just as useless.

So don't trade. Any other problems you'd like me to solve for you?

yelnick

vipul, you make an excellent point. if Daneric wanted a five wave pattern made up of 3s he should have thought triangle.

min

"Trading over longer time frames is just as useless. Elliott Waves have never guided people to fortunes, unless they are selling subscriptions. Ralph Elliott died poor.

Posted by: Scary Boyd aka Larry Coyd aka Mr Cheap Shots aka Mr Wannabee"

There are pretty bad Ellioticians out there. Part of the problem is that Elliott requires an IQ way north of 90 to make it work, so you just gave yourself away my feeble minded cave dweller.

Move on before you lose the rest of your money and get eaten up by some of those feral dogs that will be roaming our streets soon.

Move So how did you go about losing all YOUR money Mr. Sub 90 I.Q.?To Afraid to post a real name?

By the way are you related to Dimitry or Sherman?

DG

There are two ways to make money in the equity markets. Buy and hold or trade. Within the buy and hold method, you can buy all at once or you can dollar cost average. Within the trade method, you can trade a shorter time-frame or a longer time frame.

If you are going to trade longer time frames, which seems to make sense in an environment where the markets run up big and then drop big, I don't see where you are going to find a better market timer than Neely. I have data on his market calls going back to 1994 and he has been on top of every major turn. We already know that he was bullish after the 1987 crash, so we can say that for the past 20+ years, if you wanted to make only a couple of trades a year or even one trade every few years, Neely has been the man to provide you with the details of when to make it. People who make blanket statements like "trading longer time frames is just as useless" are clearly not looking at the data. They are just spouting an opinion. When there is no data to analyze, an opinion is fine. When there is data, an opinion is useless.

Cary Lloyd

I like to buy and hold for very brief periods and then make a core position of trades. I check the Yelnick site for ideas and then I see if my neighbors are buying or selling. I also like to follow the Baltic Dry Index and I think it is a leading indicator. I love trading! I would not give it up for the worlds. But Elliott Waves are not my bag. If I like Elliott, then I will try stick and candle instead or maybe Gann. Another good one is Jimmy Rogers, the "hot commodity cowboy."

If you think my IQ is 90 then you have something coming! I am a Swiss so I know three languages. I am a semi-master at chess. And I can beat you at this trading game, gents!

Many of you think you are losers because you cannot make a fortune trading. You are wrong! You must get the right mental attitude, too.

I wish you luck and do not forget: Trading is a GAME.

DG

I have read Rogers since the mid-1990s. He is good on the macro view, but you need to be patient and some of his recommendations are out of the reach of the typical retail investor. At one point, he was recommending buying farmland in Africa.

I wish you luck and do not forget: Trading is a GAME.

I agree and what is the key characteristic of games in general? They have rules. Following from that, you can deduce that the best trading will be done by adhering to a robust rule-set that describes the broadest set of profitable trading techniques. Anyone who's ever read Chapter 3 of "Mastering Elliott Wave" will tell you that there is nothing comparable in any other trading manual out there. Add in the additional rules laid out in the "Question of the Week" pieces on Neely's site and you have got about 90-100 pages of pure trading logic. The "rules of the game", so to speak.

Here is Neely's opinion on Gann:

Are you keen on supplementing Wave theory with the works of W.D. Gann?
Answer:

My answer to this question, sent in by Karun Verma, may jar some of you. During the first five years of my career, I spent a great deal of time studying concepts presented by W.D. Gann. I read his books - most of which were poorly written and organized - and tried to apply the ideas in real time. At first, the process appeared promising, interesting and challenging, but ultimately unfruitful. By far the most useless and illogical Gann concept is that of "Fan Lines." Moving up at a "45 degree angle" is different (for the same market) depending on the time and price scale employed, even if using the same Daily, Weekly or Monthly bar chart in each instance.

It wasn’t until many years later, after wasting at least half a decade studying the concepts, that I realized the problem with Gann’s work. Nearly all of his techniques produce a plethora of potential outcomes, but leave no certainty. Therefore, instead of narrowing down possibilities, his techniques increase the number of possibilities, preventing one from arriving at any logical or rational game plan for trading.

All good trading techniques must first focus on risk management and risk reduction, then stop movement and lastly position liquidation. No such process is clearly or logically spelled out with any of the Gann techniques I’m familiar with except his Swing Trading process. After 5+ years studying Gann, the only thing I came away with was an upgraded approach for following market advances and declines (based on Swing Trading). This new process I call the MotionLine and is a crucial part of my new NEELY RIVER trading technology, which I teach in my private trading classes.

Neely the Guru

"If you are going to trade longer time frames, which seems to make sense in an environment where the markets run up big and then drop big, I don't see where you are going to find a better market timer than Neely"

That was the biggest Joke of the year. DG, do you have a mirror at home? For God's sake, look at it.

Cary Lloyd

Neely is the only one I trust. I do not trust Prechner and his people. Neely is strict. Discipline first, ask questions later. And Neely is accurate. His predictions are uncanny. Also, I do not think he needs to sell his service. He does it to better society. He long ago became quite wealthy from acting on his own advice.

DG

Neely The Guru,

You know what I do have at home, in addition to a mirror? Transcripts of interviews with Neely going back to the mid-90s through 2003 and "public e-mails" from 2006 to 2009. I've read them and, since English is my native language, I'm pretty sure I understand them. Know what else I have at home? Access to historical financial data for the S&P? Know what I can do with that data? Compare it to the transcripts of the Neely interviews. Know what I concluded from that exercise?

"If you are going to trade longer time frames, which seems to make sense in an environment where the markets run up big and then drop big, I don't see where you are going to find a better market timer than Neely"

If you don't have data that says otherwise, do not address me with your OPINIONS, or your story of woe about the one trade Neely missed that you were betting on big. I don't care what you "think" (using that term loosely), I care what the DATA say. You seem to be too stupid to understand that distinction, in which case there is nothing I can do to help you.

DG

Also, I do not think he needs to sell his service. He does it to better society. He long ago became quite wealthy from acting on his own advice.

Evidence I've seen says that Neely has definitely become a multi-millionaire from trading his own method. Good for him. He has said on a couple of occasions that he wants NeoWave to become the "gold standard" in technical analysis, which is a bit more lofty than just making money, although I don't know if I'd go so far as to say it "betters society". It certainly would be a nice legacy for him.

Hank Wernicki


Here's the Counter Trend Fractal Rally Chart :

http://www.elliottfractals.com/TRADE_9_28_09.jpg

JR

DG - In regards to your statement that someone on Daneric's blog that was representing themselves as an asset manager contacted him about a possible job opportunity . . .

I know that that was indeed true.

However, I heard from the "horses" mouth that the asset manager was not at all interested in exploring any business opportunity with Daneric after having received a most immature reply back from Daneric. It was just a few sentences of "jibberish" that reflected poorly on Daneric; giving the asset manager the sense that he was dealing with some sort of "kid" on the Internet, and not someone that was very mature or professional.

DG

JR,

Thanks for the update. If he is just a kid, he might not realize it, but those kinds of opportunities don't happen every day.

JR

DG - Interestingly enough, I do not believe that they were actually interested in offering any kind of positions relating to trading or being a portfolio manager. I believe it had to do with working in the technical analysis department of an asset manager. Interestingly enough, the person that spoke with me admitted that they thought that Daneric was far too biased in his technical work, for his own good; and that after watching him and his blog for the past year... could see that he frequently changed his analysis to please his "followers" vs what was actually happening in the market. I got the feeling that they believed that they could take him out of the "blog" environment and prevent him from falling prey to bias. My take on Daneric is that he is simply a "portal" for Prechter, but attempts to come up with very short-term wave counts that more often than not change each and every week to the point of being of very little value to people that are traders.

DG

JR,

It does seem like the whole crowd over there is pretty adamant about the P3 count, which I think is just flat out wrong. But, as you say, they are more or less thinking of wave theory in the same way that Prechter does, which would almost inevitably lead to that wave count.

attempts to come up with very short-term wave counts that more often than not change each and every week to the point of being of very little value to people that are traders.

Yeah, you have to watch out sometimes if you have a lot of followers and they are all craving action. It will bias you toward labeling things so that it looks like there's a trade when there really isn't. Then when the trade goes south, you need to rework it all again. Patience is definitely a huge key to trading success.

yelnick


DG, you are making a very important point. The wave count (EWI) right now is on a cusp. It could be a wave 2 which just retraced precisely 62% at SP1065, and will gap down tomorrow as P3 hits with a vengeance. Or it could be wave iii of (v) up, which could gap up tomorrow on its way to SP1121. No wonder Neely is essentially standing aside and watching.

When this clarifies I will discuss several wave options. I am not in the P3 camp. We could do another X wave and have another corrective up wave into Feb. We could have ended this pattern off March but not fall even down to the Nov lows a year ago before another rally starts. At a larger level, it is unlikely the P3 debacle comes until the next wave of the financial crisis comes, and that seems delayed until we run out of stimulus and run into mortgage resets

JR

Yelnick - Agreed 100%

Moreover, I do not know why anyone in their right mind would want to be short this market heading into quarter end tomorrow. Given the potential for Minute 5 and continued strong NYSE breadth, I see nothing unusual about the current trend in the market.

JR

DG - My feeling about some of these EW blogs, and Daneric's in particular is that the posters that follow are not very experienced in the market when it comes to using even the most basic of technical tools. They take everything as Gospel from people like Daneric, and as a result never once question whether or not their is any predictive value in the indicators that are continually posted in an effort to show "weakness" in the market in the anticipation of P3.

For example, charts of the VIX, RSI, MACD, and the $BPSPX (sentiment index) are frequently used to build a case for a deteriorating market and "weak" technicals, yet anyone that has actually traded from the short side over the past 2 months using these technical indicators has been totally CRUSHED. Interestingly enough, not one of these bloggers ( Kenny or Daneric ) have ever posted a cummulative Advance/Decline chart on the NYSE to show just how strong this market has been since July.

It's quite apparent to me that none of these people have actual SKIN in the game. How else can someone be so wrong since early August and keep pounding the table on a P3 count as being the primary count???

If they actually traded the market and had SKIN in the game, they wouldn't be so "blinded" by Prechter and the call for a P3.

And one last thing . . .

There are several posters that practically "live" on these blogs. I won't mention any names. But if you look at their posts and the comments that they make, it is clear that these people DO NOT TRADE for a living. They are nothing more than "cheerleaders" for the blogger that they post on, and perhaps are friends of the blogger - - - looking to help create web-activity for them with their posting. In fact, one might even be able to make the case that some of these bloggers log into their very own blog with an ALIAS screen-name in order to create a "following" and also to spurn detractors. But I'll just leave that comment alone for now.

Again, if any of them actually acted on any of their BEARISHNESS over the past 2 months, they most likely would be filing for Bankruptcy right about now!

In fact, the other day one of these guys who practically lives on the Daneric blog made a fool out of himself by not having a clue about what a put option was, and that the price of the option would increase with a decline in the stock. Yet, if you ever made a post that challenged Daneric's wave count, or questioned why he has totally IGNORED any kind of "alternate" bullish count - - - you were shouted down by the very same guy that doesn't know the difference between a put and a call option.

My point is, is that if you are new to the blog scene and EW you must be rather cautious about the "perma-bear" crowd that continues to "cheerlead" for their resident "Gurus". Most of these guys have never traded anything other than a couple hundred shares of a penny stock, or something like ETFC at $1.50 They lack objectivity, experience in using technical indicators over a large portion of market history, and probably aren't even old enough to have been around for the Crash of '87, let alone Prechter's horrible calls thereafter and in particular his resounding bearishness back in 1993.

These are the very same people that believe that you could not have possibly gone LONG over the past several months for FEAR that the market would gap down several hundred points.

In the blogosphere...

Buyer Beware.
:)

DG

JR,

I think one of the big mistakes (and it is a typical beginners' mistake) they are all making is trying to catch "the top". Jesse Livermore said that the first and last 1/8ths were the most expensive 1/8ths of them all. They keep trying to say, after everything that looks like five waves, that it's the i of 1 of P3. Man, if it's really P3, who needs to catch the i of 1 of it? That's just pure greed. Shoot, the market practically screamed to take a flyer on the long side in mid-July. With a tight stop, of course, but long nonetheless. I did think in mid-August that we were going down, but, again, the market told me it wasn't time yet. Same thing in September.

The other day when we moved down off the Fed meeting, I wanted to short that initial move like crazy and I did have the target for the move right to within a dime, but I had planned out that short for two weeks and was waiting for a specific retracement level to get hit off whatever high we got. I missed the first few percent of the move and even now I could get stopped out, but the entry only happened after the market "proved" to me that it was showing weakness relative to what it had shown since the September lows.

I got that trick from Livermore, too. He tells the story of one time when he went bust and got a loan from a broker who knew him well, but it was only a small loan, so he said, "I had to play it just right". He knew what stock he wanted to buy, but told himself to wait until it crossed a certain price. He waited six weeks for that to happen, bought the stock, and within a few weeks was back on his feet!

JR

Exactly.

But these guys are so wrapped up in stroking and massaging their own EGO's and trying to gain all sorts of internet "celebrity" from picking the top that they are a complete waste of time.

And that's why I am quite certain that these people DON'T TRADE. They are simply a bunch of college kids playing on the Internet and fantasizing about being a big time TRADER someday. They are able to keep chanting "P3! P3! P3!" because they simply don't trade. And for those that have followed the Kenny's and Daneric's of the blogosphere, they know how costly these idiots have been in trying to pick the bottom of the US Dollar, and the top of the S&P. No one could have been following them since August, committing risk capital on buying the dollar and shorting the S&P without having suffered tremendous losses. That is for sure.

In a way, it's almost like "theater".
Complete with a poster named "Trader Steve" who goes on one rant after another about market manipulation, high frequency trading, Goldman Sachs, and all the other "conspiracy" theories anytime shorts get squeezed as institutions continue to put cash to work heading into the close of every day. In fact, I've found that these two blogs (by Kenny and Daneric) have been some of the greatest CONTRARY indicators of all.

It's so incredibly ironic. They keep saying how the "sheeple" will be lead to slaughter when in fact, these idiots have been the one's getting slaughtered to the point of having absolutely no risk capital left to risk. Even if these morons are eventually right about a P3, my guess is that they will barely make any real money off of it. It's just about EGO. Nothing more... Nothing less.

In my opinion, these guys are merely a "portal" for Robert Prechter and EWI. In fact, I wouldn't be surprised if they receive some sort of commission or "promotional" fee from EWI.

Enough said.

Rob

Daneric does get a commission from EWI. He mentioned it recently during EWI's Free Week and has a thread on it. He gets $3 for something. Woopty doo! That will go a long way in Starbucks.

I just found out about Kenny and Daneric about 3 months ago. Kenny was adamant that 995 - 1000 would be the top for the SPX.

But then again Neely swore 956 was the top for the SPX, so go figure.

From what little I know about EW, I would have to save we will be concluding wave 2 down of [5] of Intermediate C of Primary Wave 2 (or B) tomorrow.

I expect the market to top during the week of options expiration (SPX 1105 - 1121).

How is my credibility so far?

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