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« Monty Hall Market | Main | Inverted Head & Shoulders Pattern Worked »

Wednesday, May 26, 2010


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The EURO continues to rally hard.
FXE now at 123.50 and near the highs of the day.

Roger D.

The market opened up 230 pts in the 1st hour, nice to see the manipulation machine still works. Since then the market risen all of 20 pts since 7:30 am. Looks to have or still trace out a ending pattern.

If the market would have opened flat and risen the 230 pts on real buying I'd be impressed, I am not. A close below 10200 would be extremely bearish in my view with a possible collapse to follow.

Roger D.


Upstart, I cannot resist. I agree with your statement but not in the way you mean it: "Monte is revealing to the contestant that at least he didn't choose ONE of the goats...That's all it is.  That has no meaning with regard to the probability of how the two remaining objects are placed behind two doors."

The odds all depend on information you have or lack. They are not the same for people before and after the pick. The prize never moves, but the information about it does. 

The odds do not shift for the contestant. Before you see the goat, your odds were 1/3. After you see the goat, your odds of that pick remain 1/3. As you say above, opening the goat door does not change the odds of your prior pick. All that has happened is that the 2/3 chance the prize is in the unchosen doors has collapsed from two choices to one, meaning switching to that choice has the odds of both doors, or 2/3. When you say showing the goat has no meaning with regard to the probability of where the two remaining objects are, it means your 1/3 first pick remains a 1/3 chance. 

If a new person shows up not knowing which door you picked, his odds are 50-50 since he lacks information that you have. 

This choice to switch is not an independent event for the contestant. It is not as if we shuffle the goats after the choice in a form of Monty-Hall Roulette. It is not as if we roll the dice all over again at craps. The second choice is dependent on the path of the first choice (yours and Monty's). Count the odds of the dependent path:
you pick, he shows a goat, you stay = 1/3you pick, he shows door 2, you switch = 1/3you pick, he shows door 3, you switch = 1/3

You have 2 shots to get it right if you switch, since Monty did not choose randomly. 

Let me try this. Think of Deal or No Deal, where you pick a case and then walk through all of the other cases to find the $1M. The odds you picked the winning case change as more cases are revealed, because the choices of unopened cases are random, and you might reveal the $1M prize along the way. If you hang on to the end with two cases, never revealing the big prize, you are at 50:50.

It makes a world of difference if the host knows ahead of time where the big prize is, and chooses for you. The evil host could open every case other than the one you picked and the $1M, and ask you to stay or switch. In that case the odds are not 50:50 at the end. You should switch. Your odds of you choosing the right case were 1/30 (if there were 30 cases), but the evil host is trying to fool you. The odds the prize is in the remaining case is 29/30. The odds you failed to pick the case was 29/30 from the start. The evil host is not choosing randomly. 


"It is not possible to countwaves on 5mn, 15 mn charts."

They don't always look nice (counts) but
when they do
you can have excellent trade setups
ES globex chart


"The market opened up 230 pts in the 1st hour, nice to see the manipulation machine still works. f the market would have opened flat and risen the 230 pts on real buying I'd be impressed, I am not. A close below 10200 would be extremely bearish in my view with a possible collapse to follow." - Roger

I think that you spend far too much watching the Dow Jones and S&P, and as a result "discount" a lot of the market action with your bearish, dismissive bias.

There are many stocks that opened +$1.00 and then continued to RUN HIGHER all day long to $3 and $4 gains. That is a trader's DREAM.



"you simply have to resort to some other analytical tool."

yes you do;
to complement these setups.

I was commenting on price action and setups based on price action.

Don't expect much more on a day after a huge overnight rally.

Either it is going to exhaust itself and one has to identify where, or it will not do much.


"Sounds like could go up . . . could go down."

this is the case when price action is inside a triangle formation;
chop chop until it decides to break out decisively.

price action setups help you understand where it might break out decisively.

Mamma Boom Boom

Goat ropers will always rope goats.


"If the market would have opened flat and risen the 230 pts on real buying I'd be impressed, I am not." - Roger

Real Buying???

And how are you able to determine what is REAL BUYING, and what is not real buying? Even more importantly, if you are trading and your clearing firm/broker pays you in PRICE . . . who really gives a flying $%&^)?

Somehow, I don't think that anyone who is long this market is trying to determine whether or not there was REAL buying today. I'm sorry Roger, but your comment is one that is highly reflective of someone that is RATIONALIZING why they missed making money on today's move to the upside.

Isn't the goal of trading to make money???

vipul garg


the 15mn chart you have posted has far too many errors.
just like one correct channel can pay rewards as opposed to having too many on a chart, similarly too many labels spoil the broth.
it is a secret not many e wavers propogaters want to admit ( only a practitioner can admit) : it is simply not possible and certainly not profitable to count and trade waves on small frame charts like 5 and 15mn.

i would say you donot complement ew with other methods but use other methods exclusively on such time frames.
and just to add: it works very well with larger time frames.


ok vipul

It is not easy to count them correctly all the time;

this ending diagonal though, still is at the end of a run;
a run on the 5min and 15 min chart;

I know that I will probably relabel it; it is almost obvious at least on the 5 min ending diagonal.

The fact is, that it helps identify what can be expected at this point in time, in this minor wave up.

I started this methodology discussion to exchange methods and tactics.

If you want to participate, please do.
:) :)

vipul garg

participation doesnot simply mean 'to be in agreement'.


"participation doesnot simply mean 'to be in agreement'."


I would like to know how you view today's price action, which tools you used to that effect.

I did not post charts for you to agree, but to tell me your point of view, i.e. comment on them.

I thought that the phrase
"I started this methodology discussion to exchange methods and tactics."
was clear.


Hello Duncan

since you have an excellent understanding of triangles
what is your take
on a possible running correction a-b-c for wave w4
a the 1051 to 1089 leg on Friday and Monday
b the drop to 1037 on Tuesday morning
c the w-x-y rally since Tuesday?

Having reached an important retracement level at 1098.5 (in the price range that w4 could retrace),
on an ending diagonal price action,
seems logical to examine this possibility.

How about a w4 triangle that can give leg d down from where the market is now and a failure wave e after that?


Steven_737, that wave iv triangle is disproportionate to the prior wave iii in time and retrace.


Yeah, more of a b wave

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