Elliott Wave Training

Are you looking to learn the Elliott Wave principle? Or maybe you already have some experience and want to find the ways to improve your skills better.

Click on this post for details:

http://wavepatterntraders.blogspot.com/2012/04/elliott-wave-training.html



Monday, April 29, 2013

Elliott Wave Education (Ending Diagonal)

I thought i would write a few post about the various Elliott Wave patterns but use real life examples to show how readers can trade the pattern and where to put stops etc.

So the 1st pattern i want to show is the ending diagonal.

This past week i had been tracking an ending diagonal on the AUDJPY pair

Before


After


The pattern is basically a wedge shape, but it has 5 legs and each leg is made up of 3 waves.

Wave 5 can never be the longest, and as its contracting wedge shape, so wave 3 tends to be shorter than wave 1 and wave 5 shorter than wave 3 etc. Although there are instances where wave 3 is slightly longer than wave 1, we call this an unorthodox ending diagonal, as if the pattern meets the other criteria then its a valid working idea, especially if the overall look has a wedge shape and wave 5 is shorter than wave 3 etc.

I was looking for a 5th wave to a new marginal high but i also knew that it must stay below 102.88,  that was our risk point, this was a live setup, "not after the event" so members were fully aware of the risk that came with the setup

By knowing your risk control point you can feel at ease and not have to be concerned about extended losses, as by knowing your maximum loss before being stopped out is far easier to deal with, than being stopped out when you have no control and cant admit the idea is wrong

Elliott Wave gives you that risk control point with patterns and ideas, i don't know of any other system that offer this control.

You can read about ending diagonals in Frost & Prechters book here:

http://www.scribd.com/doc/7381626/The-Elliott-Waves-Principles-Frost-AJ-PrechterRobert-R

Page 12


Sunday, April 28, 2013

GOLD VS HUI

I initially wrote about the link between the markets back in Dec 2012.

You can read the article here: http://www.marketoracle.co.uk/Article38090.html

We now have the 250-270 target on the HUI i spoke about in that article, although the decline on Gold is far lower than i initially pencilled in for a low.

The idea was to find a low for the larger X wave decline into the blue support area on the HUI and Gold would follow and put in a low.

Anyone that has followed Gold and the HUI for a while will know that the Gold stocks were leading Gold lower, in fact the HUI topping in my long term target zone back in Sept 2011 was one of the reason i was able to the call a top in Gold back in 2011, so using the HUI again could potentially help find a potential low in Gold.

But that's all in the history i am sure readers want to know what is going on in Gold stocks and Gold.

With the HUI testing important support its vital for both Gold and Gold stocks to find a meaningful low around the 250 area, if not then i feel a test of the 2008 lows are more likely and based on the movements in the HUI and Gold i suspect Gold could see another $200-300 lower and test under $1100-1000.

HUI


You can see the link is still very much intact, and the HUI was the weaker market back in the 2008 crash, much like today.




Gold

Currently i still feel that the is a chance for the bullish case to make a stand here and whilst it might come back to test the recent lows on Gold and the HUI, i want to see evidence of buyers stepping up and buying Gold around the $1300 area and buying Gold stocks so the HUI will find strong buyers in the blue support area.

Losing the $1300 area on Gold and the support area on the HUI around 250, will then suggest an alt idea i am working and a much more bearish outcome is likely and Gold could be seeing well under $1000 before this move is over.

So the bulls need to step up up now and support the areas on both the HUI and Gold if they don't want to see these markets crash any further.



Saturday, April 27, 2013

Elliott Wave Analysis of USDJPY (short term)

Update to the idea i posted last week http://wavepatterntraders.blogspot.com/2013/04/elliott-wave-analysis-of-usdjpy-short.html

It seems the bulls got trapped for the 3rd time, with everyone dead sure it was going to 100, the market generally does not make it that easy.

I was reading many traders getting long right into our sell target zone i highlighted in my last post.

It simply amazed me that many traders would even buy into a move just underneath the 100 area and looking for a few pips, when the risk as we have seen has been nasty if you were long looking for the same trade 99% of traders were looking at.

Its a good job we were looking lower and not caught out by the market making a trap.

Elliott Wave analysis nailed the move, whilst everyone looking higher we were looking lower.

There is the potential for some sort of temporary low in place, although it would need to see a strong break above the 98.75 area 1st, its a bit early to say a low is in place, but if any bounce is corrective and fails to get above 98.75 then, i suspect we will see more downside and a much more complex decline, one that could take this well under 95.00.

The move from 99.88 appears to be a corrective decline, so based on the next bounce, it will confirm if this is setting up for more downside, as if its a weak 3 wave corrective bounce that fails under the blue line, its not a good sign for the bulls.

Before 





After




Elliott Wave Analysis of EURUSD

Whilst it remains under 13093 i am looking at 2 ideas for this pair, although at this current time i am not biased yet to any idea, as we are right between both ideas

Idea 1 - Suggests its currently in wave [d] of a triangle and probably head towards 12970 before a bounce in wave [e], then head lower towards 129-12875 (as shown in red)

Idea 2 - Currently in wave [iii] of a possible ending diagonal (ED) and form what technicians called a "bullish wedge" although Elliotticians call this an ending diagonal (as shown in black)

Suffice to say traders can look to sell this market if it pushes to around the 13050-60 area with limited risk to 13093

Both ideas rely on staying below 13093, its that simple.

Target 129-12875


Elliott Wave Analysis of DAX, CAC & EURSTOXX 50

Short term there still appears to be some missing pieces to the advance, i suspect the decline we have recently seen is a small 4th wave pullback, so a new high would complete a 5th wave advance and a cycle from the 19th April low.

Unless we see something that really suggests an aggressive reversal, the odds still favor more upside before a pullback to at least correct the advance we have seen so far.

So ideally early next week we see further upside to make it a 5 wave advance on all 3 markets.


Thursday, April 25, 2013

Is Gold Really Bullish?

If you only looked at Gold you could be thinking its strong and bullish looking, and i would agree with that, its most certainly stronger than the other metals.

But the clues from Palladium as well as Silver could also be telling the next likely price action in the metals.

If you look carefully at PA and SI they suggest a triangle, and i suspect its a 4th wave triangle, so whilst GC has pushed higher the other metals have lagged severely.

The next expected decline on SI and PA is a move lower and "thrust" lower for wave [v], so i still suspect Gold will follow and eventually push lower and join the other metals when they have finish the triangle patterns.

Sunday, April 21, 2013

Elliott Wave Analysis of Oil

Update to this chart http://stocktwits.com/message/13001528

If we just focus on the move that started from $97.77 we have a basis to find a trade, the long term picture has not moved in over 2 years, but there have been plenty of smaller setups we could have traded.

It can be counted as a 5 wave decline, there is enough gyrations, but i suspect that with the wave Gold and Silver are looking we should see further downside in all 3 markets.




If you look at Silver is relatively weak compared to Gold and it actually looks like a triangle much like the idea shown on Oil.

This could also pop to around $89.30 and still be fine for wave [iv] as its well under the standard fibbo retrace of 38.2% of wave [iii].

Corrections are difficult at the best of times, and 4th waves are the worst wave of them all, this is where i tend to hedge ideas and allow for many ideas, so scale in positions and allow for variations in the ideas such as this idea, that way you don't continually get stopped and chopped to pieces.

Much above $91 is likely to suggest the idea in blue and we indeed have completed a 5 wave decline from $97.77.

If it moves lower now for wave [v], then i am targeting $84.00, so a decent move.

Staying under $88.75 supports the triangle idea as shown.

We can use $91.00 as the bull/bear area short term.




Saturday, April 20, 2013

Elliott Wave Analysis of USDJPY (short term)

Short term this pair looks like a 3 wave bounce from 95.78.

By definition a 3 wave move is correction, so the odds suggest, that we likely see this advance from 95.78 completely retraced, i am looking for a reversal early next week from the 99.50-100 area.

I think this setup will offer trader the chance to sell this pair, if you look at the other JPY crosses you can see the same 3 wave look, some pairs like NZDJPY, AUDJPY and GBPJPY show a weaker move than the USDJPY


I would also watch the RSI if we saw a minor new high into the target area. A strong break under 98.50 should help confirm a several in place.

My longer term ideas are reserved for members.

Friday, April 19, 2013

Elliott Wave Analysis of AAPL

I have received a few requests for this stock and could i explain my projections and ideas.

Normally i don't really do requests, expect from members, but as its been more than a few requests i am going to make an exception.

If seems many bulls are still pulling their hair out trying to understand what is going on and i think many are "desperately" trying to convince themselves that this is suddenly going to rally back to the lofty highs it attained at the $700 mark.

Having studied and researched the DNA of many "blow offs' in history it was without doubt IMO a blow off, to those analysts that actually took the time to research this, you could see all the hallmarks of a mania and the likely reversal that ALWAYS occurs after such a move.

Gold, Silver, Oil, other commodities etc, AAPL traded like a commodity and reversed like a commodity as well. A momentum driven speculative bubble driven on greed.

Lets start with some of the basics to a "blow off"

1. Parabolic curve and insane angle -  AAPL clearly had this as i posted right before the "top" (check)



2. Mania herding - Traders piling in at the top, not a care in the world, revised targets every day, cant do no wrong, its the easiest trade in the world, Grandma and Grandpa are making tons of money. (check)

It was clearly a speculative mania, that brought almost everyone to buy this stock.

Remember the calls for $1000, 1200 etc. its the easiest call on the planet to just  follow others.

People giving their life savings to a rookie such as Andy Zaky of Bullish Cross is a classic example of greed and how the mighty have fallen. Zaky destroyed many lives in the process as well, although he is not to be blamed, the investors that never understood the risk have to accept their mistakes as well.

http://tech.fortune.cnn.com/2013/03/04/apple-zaky-bullish-cross/

3. Greed and denial -  When i made the call on Twitter to get out of AAPL at $700 as it was likely going to crash  i was harassed for days and abused by the bulls, i had emails calling me names and telling me i was a fool and an idiot, AAPL will never go down because it makes gazillliioonnnsss, and a cash cow, that was basically the gist of the emails.

Oh how wrong those AAPL bulls were. If they just stopped to look at history they really could have saved themselves a lot of pain. Instead of looking at history, the AAPL bulls were too busy counting the millions of $$ that they thought they would be getting and not looking at the potential for things to go wrong.

4. I guess a completed Elliott Wave pattern, that suggests the end to the trend and end of wave 5 would help as well , i posted this to members before the peak.

So lets look at what is going on in AAPL and what i expect to happen going forward

Long term


If you look at the long term chart it shows a 5 wave advance from the lows made in 1997, and furthermore you can clearly see it was a 5th wave "blow off"

Its rare to see such a move in a stock, as generally extended 5th waves are seen in commodities, such as the move we saw on oil into the all time high in 2008.

Having put in a 5 wave advance into the $700 area, the likely target and guideline is for the market to come back and test the 2nd wave of the extended 5th wave.

So that's basically a test of $200 (red line). Before readers disregard this target, i want to point out, "my precious" AAPL was at $700 and now sits at just under $400.

If the trend keeps moving lower and it shows no sign of reversing and the declines are moving lower in 5 waves and correcting in 3 wave bounces, then i expect the $200 area to be reached. (subject to bounces and corrections)

There is a 2nd target lower down and target the $75 area, although for now the $200 still seems the safer bet and another 50% haircut from current levels.

Medium term

Its not a clean picture although its clearly moving lower, its not showing much clarity, hence i suggest focusing on the short term charts for trades and risk analysis. When its unclear on a time frame, its much better to move to a time frame that does make sense.

Short term

Whilst it remains under $437.98 we can continue to look lower, whist the medium picture is a little confusing with regards to the Elliott Wave on a 4hr and daily level.

On a 60 and 120 min level its much clearer and we can use $437.98 as a key area the bears must defend.

It appears to be a small 5 wave decline from $437.98, so if a small bounce is seen in 3 waves it will offer traders the chance to sell the market.













Elliott Wave Analysis of IBM

With earnings out after the close on Thursday the potential now is a for a substantial reversal, i have been waiting for the release before i would make a strong conclusion as to where i think the stock is heading next.

The potential now for a strong decline is very real and one that swing traders can take advantage of, with the stock likely to open around the $200 area, the bears now need to see a substantial break here and really confirm the long term peak in place.



The advance from the 2009 lows counts well enough for a completed 5 wave impulse wave and it also appears that it has ended on a triangle "thrust" for wave [5] of what i believe is a larger wave C.


Short term i suspect the decline after hours is potentially a small "3rd of 3rd" so inside a 3rd wave, and more gyrations needed to complete a larger 5 wave decline from its  all time high at $216, its important now for the bears to hold it under $206 and the sellers to arrive and push it lower.

If that is the case and we have a meaningful top in place, things are just getting started.



If we take a look at the long term view, the potential for a very important top is serious enough to warrant watching.

If it has put in a serious top, the decline from here is likely in the order of what happened to AAPL.

Get the popcorn, this could be a great ride.

Edit - If the gap down today holds, the alt idea (which was my orignal preferred idea) is wave 4 of an ending diagonal, so rallies back above $206 then onwards to new ATH for wave 5 of the ED



 

Thursday, April 18, 2013

Elliott Wave Analysis EURUSD (short term)

With a clear 5 wave decline, I strongly suspect the advance we have seen over the last 2 weeks has ended

Its been a choppy advance and troubling to label, (most corrective structures are a problem) but the evidence of a potential US$ low is strong

As long as any bounce here is in 3 waves and stops under 13198 you have a setup to sell

Ideally a move to around 131-13120 in 3 waves is the target area, but it requires some sort of corrective 3 wave bounce

It may only get as far as 13080 before heading lower

I see evidence of a reversal in other US$ pairs such as the USDCHF and GBPUSD, so the US$ low that i  have been looking for this week, appears to be in place based on yesterdays price action

So more upside expected for the US$ and USDCHF (subject to corrections) and more downside for EURUSD and GBPUD (subject to corrections)

Lets say this is part of a larger correction, even still you have a simple setup, if a 3 wave bounce is seen, its a setup to sell, stops at 13198, target 12875


Sunday, April 14, 2013

Elliott Wave Analysis of EURJPY

If you look at the EURNZD idea i posted below, you can see the potential for an ending diagonal reversal, I thought i would show you an example of what happens with a low is in place and a strong reversal is seen from an ending diagonal

As the EURJPY pair pushed into wave [5] of C you can see the aggressive reversal as the market has compressed to a point where the sellers are exhausted and the market has nowhere to go but up (thats the wedge shape)

I strongly suspect the same on EURNZD, and a similar result should be seen, so looking forward this year i think EURNZD could be a setup much like EURJPY was last year.

Incidentally EURJPY has a 5 wave advance, so at minimum a 3 wave decline that could take it back to the 110-112 area is likely, which i suspect will align with a serious of "risk off" events across the globe



Elliott Wave Analysis of EURNZD

I have been tracking an ending diagonal idea for this pair since Dec last year, and its slowly coming into a potential low, although it needs a bit lower 1st, but it could be a serious upside reversal if a low can be found on a new low.

I noticed many Elliottcians labelling the low already in place, but one look at the structure should have told you that it needed a new low for a larger ending diagonal.

Now that its coming into a potential low, this is one pair that swing traders can monitor

1st Dec 2012


27th Dec 2012


14th Apr 2013



Although wave [5] of C could push towards the 1.49 area, the min objective that would be needed is a minor new low, and it could be a major low as well

This is a trade setup for traders that have time and margin, although i don't track this pair that much, i do watch a number of pairs on a weekly scale for members

Saturday, April 13, 2013

Name These Markets?

Here is your chance to win a month free

Simply answer which markets are shown, the send your answers to enquires@wavepatterntraders.com

Cant be simpler than that, the 1st 5 correct answers will win a free months subscription

Good luck

Rules:

1) Not open to current members

2) Not open to owners or affiliates of any trading service

Friday, April 12, 2013

Elliott Wave Analysis of GBPUSD

I originally had 15350 penciled in for a target, and once we confirmed a new move higher had started from 14831, i was expecting to see a corrective structure (some sort of 3 wave advance)

Its morphed a little from the original idea, although its now at areas of interest where i think sellers will stamp on this pair

The advance appears corrective and i am labeling it as WXY correction, we can see the waves overlap each other, so its NOT impulsive, and it channels nicely, so i strongly suspect one this finishes its correction, a move back under 14831 will be seen

A strong break under 153 will be the 1st clue a reversal is taking place


Thursday, April 11, 2013

Elliott Wave Analysis of ES

There are 2 waves that can be suggested

The idea in blue is the alternative idea and potentially a dip then push to a new high and a strong reversal after completing a 5 wave advance from 1533ES

The preferred idea is in black and its currently in a 3rd of 3rd wave and needs a few more gyrations higher, so could see about 20-30 points

As long as the market stays bid above 1572ES i like the idea of more upside here and traders should remain bullish until we either see a strong break down under 1572ES

Or a 5 wave advance from 1533ES


Traders MUST stay bullish above 1572ES and forget selling this market unless you see a strong breakdown under 1572ES

If you see a choppy decline and holds around 1575-1578ES then i suspect more upside for the idea in black

So based on the next decline will help suggest which path

Dont forget the 10 handle rule

Monday, April 8, 2013

Elliott Wave Analysis of Natural Gas

I have been watching this idea for a few days and waiting for a move higher to finish this potential larger WXY correction idea, this last leg up looks like a 5th wave of wave C of a larger wave [Y].

Although simply put, its a 3 wave movement from $3.14, much similar the prior 3 wave movement from $3.07.



Hence its what we Elliotticians call a WXY correction, from $3.25 i suspect its now in a small 5th wave of C, so as its pushed to a new high its met its minimum objection, although the [Y] =  [W] target has been met as well.

If i am correct about this idea, and i don't see any reason why atm, then we should be very close to a strong reversal and suspect this whole advance from the April 2012 lows gets completely retraced.

But even if the larger idea is wrong, there appears to be a 5 wave advance from $3.25 nearing a conclusion, if you look at the RSI it argues for a 5th wave much like the peak into the wave [W] peak back in Oct 2012.







Ideally a small minor high for a small 5th wave then a strong move under $4.10 is want i want to see

I suspect there are many ways traders could take advantage of a potential reversal in this market, i personally prefer the futures market, although traders could look at options

I personally don't know of any decent ETF, that really moves 1-1 with the price of NG, so i strongly suggest seeking out ways to trade this before you enter any trades


Saturday, April 6, 2013

Elliott Wave Analysis of GLD (aka (GOLD)

The reversal over the past 2 sessions, argues for a potential low in place.

Its reached its target, and reversed nicely, exactly what you would expect after a triangle "thrust" has finished

What we need to see is a 5 wave advance followed by a 3 wave decline

If we see a 5 wave advance that's a very strong clue of a potential major low in place

So if you are long GLD, watch for a 5 wave move, and you could look to top slice your position and re-buy lower down

Its important to understand without a 5 wave advance its likely not put in a low, but we can see a completed 5 wave decline from $164.40

Once/if we get a 5 wave advance we should see a 3 wave pullback, its here where you MUST focus on price and forget everything else

Price is all that matters, we want a 5 wave advance and a 3 wave decline

On the decline the bears will come out telling you its going to crash and all sorts and get short etc, THAT'S  EXPECTED

You may feel that the market is going to go lower, watch what price does, a 2nd wave is what messes people up, bears will think its going lower but if fact if it remains as a 3 wave decline its the best thing for the bulls as you can load up and get long

Your stop and protection point is $149.10, you know where the idea is wrong, there is NO second guessing

Currently i suspect its close to ending wave [iii] of a larger wave [i], so a small dip for a 4th wave then a new high is needed before a pullback in 3 wave is needed.

I don't want to see it under $151 before a 5 wave advance


Normally i don't bother with GLD as i track and count the larger GC contract, but recently i am been playing around Stock Twits and i am impressed with the site

The larger ideas are reserved for members but this is the short term set anyone can follow

Remember we want a 5 wave advance from $149.10 then a 3 wave dip

The apex of the triangle around $155 should offer resistance, non Elliotticians will also be aware of the potential INV H&S


Announcement

For the attention of US and European stock market subscribers only

Due to the chop and whipsaw the last few weeks, i  have decided to offer any member of either the US markets or European stock market package a chance to trade some other markets whilst the stock markets finish what they need to do

So i will grant a full month free of the full members package

Its a very frustrating market in stocks atm, and there are far far better opportunities to trade in other markets

So if you are interested, let me know your user name (forum name) and i will transfer you into the full members group and whilst the US and European markets chop around and generally create issues, you can follow some of the other much cleaner ideas, that are actually moving and not in chop land

Wednesday, April 3, 2013

Elliott Wave Analysis of SPX

The rally from the Nov 2012 lows appears to be in wave 5, or i suspect it will be a 5 wave advance.

In Elliott Wave terms we call that an impulse wave, it looks virtually text book, although as its pushing higher it still don't look completed, I am currently working 2 ideas

Idea 1

The market is about to push higher in a small 3rd wave of what we call a triangle "thrust", so today should see more upside above 1581SPX, so some sort of "burst" to confirm this idea and negate Idea 2.

Holding above 1558SPX keeps the market bid, so no matter which idea, it is still bullish above that area, and short term aggressive traders can look to buy dips and use 1558SPX as the risk control point.

A potential target for the end of wave 5 is around the 1590-1600SPX, but its subject to wave structure and counting a 5 wave advance from the wave [e] point of the triangle (blue line).



 Idea 2

This is the preferred idea and a potential ending diagonal (non Elliotticians call them bearish wedges).

Although this is limited to 1581SPX as above that area wave [v] would be longer than wave [iii] and that's a rule violation for the pattern, so its actually quite simple, if a move above 1581SPX, it suggests Idea 1 and the triangle "thrust" option is working, failure to break above 1581SPX suggests the ending diagonal option.

Currently the market has not tipped its hand, but by the end of today's close i am expecting to have some sort of edge to which idea is working.



No matter which idea as long as its above 1558SPX the market is still bid.

I wont bore you with the daily chart idea, as that is not important, whats important is the structure appears to be a 5 wave move from the Nov 2012 lows and i suspect a reversal is close, we simply need to let the market commit and confirm which short term idea is in play.