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DOW : The Great Dow Highs of Summer 2007

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*(From the new GANN thread):

 

That's a mere 1% miss on a Double.

 

A 50% retracement to near Dow-10,500 would be a possible Gann target

(Note: Dow-10,729 might be a more precise figure. That's 49.5% up from 7,778)

 

Here's the recent action, since the 2007 Peak ... update

 

biggb9.gif

 

Now look back. What was the the price range on the day of the recent Low?

 

Tuesday, July 15, 2008

Closing Price: 10,962.54

Open: 10,938.11

High: 11,201.67

Low: 10,731.96 - that's just 3 dow points away from the Target Low (above)

 

Anyone who thinks this is "random price action" must think that the time the sun rises each morning

is random! There must be some natural law at work here. Gann tried to discover it.

 

/see: http://www.greenenergyinvestors.com/index.php?showtopic=4141

 

BTW, the above chart looks like it is set for another fall, I expect 10,732 (or lower) will be tested soon

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Well, I've just closed my first ever CFD trade and made a pocket-money sized sum by having sold 3 units of the FTSE some days ago and buying them back again today. Please I made money. Timed my exit badly wrongly though. Can take Mrs Wanderer for a pleasant dinner on the proceeds but if I'd waited till this afternoon could have taken her to a hotel for the weekend.... Hope this means my Gold luck will change.

 

I'm not sure making money on a first CFD trade is a long-term good thing - I've read several people here make small money to begin with and then lose big money...

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Well, I've just closed my first ever CFD trade and made a pocket-money sized sum by having sold 3 units of the FTSE some days ago and buying them back again today. Please I made money. Timed my exit badly wrongly though. Can take Mrs Wanderer for a pleasant dinner on the proceeds but if I'd waited till this afternoon could have taken her to a hotel for the weekend.... Hope this means my Gold luck will change.

 

I'm not sure making money on a first CFD trade is a long-term good thing - I've read several people here make small money to begin with and then lose big money...

 

Yeah, beginners luck seems to be a common theme :blink: . I think maybe it goes due to complacency and lack of discipline creeping in.

 

Anyways, we got the turn bang on the 11th August 50% date as i was looking for, but the action since then does not appear impulsive, so am largely standing aside whilst i wait for the market to show its hand. Ideally from a pattern perspective it will make a marginal new high in the not too distant future before continuing the bear market.

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Yeah, beginners luck seems to be a common theme :blink: . I think maybe it goes due to complacency and lack of discipline creeping in.

 

Anyways, we got the turn bang on the 11th August 50% date as i was looking for, but the action since then does not appear impulsive, so am largely standing aside whilst i wait for the market to show its hand. Ideally from a pattern perspective it will make a marginal new high in the not too distant future before continuing the bear market.

 

Yep, I got stopped out on the recent pop up, FTSE seems to be showing some decent strength vs other indices. Greed or ego got in the way I think...

 

Would like a test of 5720. 50% fibo. Thinking a oil drop may do it...

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Bother, if I'd held on I'd be taking Mrs Wanderer on holiday by now!

 

This is a continued feature of my trading - from Precious Metals to Euro/Pound etc. When I got a strong conviction about something - based on evidence I see around me and that I gather from my position at work - often at or near inflexion points, I cautiously invest small amounts and make a good profit as a percentage and sometimes take profits early.

 

Then, when the trend establishes itself and I've made some small money, I tend to throw more or much more in, often in time for the trend to reserve and for me to end up bitten or in the red.

 

Does anyone else suffer from this?

 

The lesson I'm drawing is that I need to throw more in earlier when I'm nervous about it and when the trend isn't yet established. Although this is more gut wrenching, I suspect it is more profitable. Any thoughts on this lesson I'm drawing? Is this the right one?

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Bother, if I'd held on I'd be taking Mrs Wanderer on holiday by now!

 

This is a continued feature of my trading - from Precious Metals to Euro/Pound etc. When I got a strong conviction about something - based on evidence I see around me and that I gather from my position at work - often at or near inflexion points, I cautiously invest small amounts and make a good profit as a percentage and sometimes take profits early.

 

Then, when the trend establishes itself and I've made some small money, I tend to throw more or much more in, often in time for the trend to reserve and for me to end up bitten or in the red.

 

Does anyone else suffer from this?

 

The lesson I'm drawing is that I need to throw more in earlier when I'm nervous about it and when the trend isn't yet established. Although this is more gut wrenching, I suspect it is more profitable. Any thoughts on this lesson I'm drawing? Is this the right one?

 

Its seems to me at the moment (past few weeks) the market (equity indices) is trendless so trying to play the trend you get bitten on the arse. My problem, or not depening on how you look at it, is I'm not sitting at the computer for long enough/at the right times to catch the correct entry points.

 

Quite happy to see the FSTE go in my face... :rolleyes:

 

Patience grasshopper. Or something

 

 

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Bother, if I'd held on I'd be taking Mrs Wanderer on holiday by now!

 

Does anyone else suffer from this?

 

You're not alone. Pyramiding up does not work for me. I just move on and look for the next opportunity but I am also now bolder on my initial trade. I also know I'll get another chance later, on the change. Patience. Actually, a little profit often is a good way to go. It soon adds up. Hard part is knowing when to exit. I'm now OK about banking a profit even if it goes on up as I've been at it long enough to know it will turn and a profit is not a profit until it's banked. I just do a post mortem to see if I can be better at it next time, but don't rush to do this as it needs time to see the turn and get the true picture.

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It looks like the market has turned down in wave 3 without making a new high that i suggested would make the last bit of the pattern look better. So, whilst the correction high was recorded on the 11th August, i think the pattern counts better if the high of 2nd September is counted as being the technical high.

 

If this is correct and this correction is over, then the falls from 2nd Sept to the 5th is a mini wave 1, with the rise to yesterday/today wave 2, with today's falls being the start of wave 3. Far bigger falls lie immediately ahead if this count is right and the correction that started on the 15th July is over. We also had a Bradley turn date today. The last one (June 6th) coincided with the kick off to the first mini third wave of the big summer falls. So, interesting to see how this pans out, would be a nice symmetry if the same proves to be the case this time too. We should soon know if my suggested count is right.

 

If the 3rd wave has started the market will likely collapse this autumn.

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If this is correct and this correction is over, then the falls from 2nd Sept to the 5th is a mini wave 1, with the rise to yesterday/today wave 2, with today's falls being the start of wave 3. Far bigger falls lie immediately ahead if this count is right and the correction that started on the 15th July is over. We also had a Bradley turn date today. The last one (June 6th) coincided with the kick off to the first mini third wave of the big summer falls. So, interesting to see how this pans out, would be a nice symmetry if the same proves to be the case this time too. We should soon know if my suggested count is right.

 

If the 3rd wave has started the market will likely collapse this autumn.

 

 

HUI looks like it may be hitting a climax low near HUI-260.

I certainly hope that holds in a more general selloff.

 

What's the EWI view on Gold here?

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HUI looks like it may be hitting a climax low near HUI-260.

I certainly hope that holds in a more general selloff.

 

What's the EWI view on Gold here?

 

I have not subscribed to their regular updates for some time, but their long term view as far as i am aware is that gold will continue falling, probably reaching the $600 area. I have been very sceptical of their gold forecasts for some time, it seems to be difficult to apply EW to gold. But i tend to agree with this forecast. I have set it out in more detail a few weeks above in this thread. Basically, it is that this correction is correcting the whole of the rise of the last few years and so may target the area surrounding the previous 4th wave, from 2006.

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If the 3rd wave has started the market will likely collapse this autumn.

 

What a week. The markets certainly embarked on their collapse as I mentioned, the S&P falling 170 points to Thursday’s low from the high on the 2nd. But then they took off in a massive way.

 

Fortunately, I exited my shorts late Wednesday and Thursday before the market bottomed in anticipation of the Bradley turn date (due Friday or Monday), which is having a good record at the moment – see my turn date thread.

 

The size of the rise since then has been somewhat surprising. If the markets were to rise above their August highs (which are not all that far above Friday’s close) then it would be worrying. I have not given too much thought to what this would mean yet, but will do if it comes about. But for now I will assume the pattern I have been counting is still in play. This means that wave i of wave 3 finished Thursday, with ii now in play. Wave iii to come will then take the markets to new lows for the year. See chart below.

 

Ignoring the media etc and concentrating purely on the pattern suggests that wave ii up should be nearly over, if it isn’t already, and that wave iii down should probably start this coming week. Furthermore, given the size and steepness of the falls and then rise to date and given that 3rd waves are usually the largest, it suggests that there should be a real collapse ahead, a mini crash even.

 

Maybe I have been listening and reading too much crap in the news at the moment, but I find this rapid turn around scenario stretching even my bearish views. However, concentrating purely on the wave pattern saved me exiting my shorts at the beginning of the week when the Vix was shooting through 30 and people were talking of the falls being overdone. So, I will try it again by buying puts Monday in a smallish way if it looks right and take it from there.

 

SP20thSept.png

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What a week. The markets certainly embarked on their collapse as I mentioned, the S&P falling 170 points to Thursday’s low from the high on the 2nd. But then they took off in a massive way.

 

...

maybe I have been listening and reading too much crap in the news at the moment, but I find this rapid turn around scenario stretching even my bearish views. However, concentrating purely on the wave pattern saved me exiting my shorts at the beginning of the week when the Vix was shooting through 30 and people were talking of the falls being overdone. So, I will try it again by buying puts Monday in a smallish way if it looks right and take it from there.

 

Douche I am a fan of your analysis keep it coming.

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Douche I am a fan of your analysis keep it coming.

 

Thanks gents.

 

Well, right on cue, a nice kick off to possibly the next wave down?

 

Fortunately, I opened a number of shorts and bought a put this morning. Unfortunately, there is no real way of confirming whether it is the next leg down, or just a correction of Friday's rise at this stage. There has not been enough wave pattern to say with any confidence. Plus, given the nature of the rise late Thursday/Friday (basically a one shot higher) there is no hook to say if it trades below that level then it ought to continue down.

 

In times like this i often set stops at a level corresponding to a 78% retracement of the falls from the recent high (in this case Friday's high in the US, today's high in many other markets). On the basis that if a market corrects more than 78% it will more often than not go all the way to a new high. Admittedly, this isn't great as that leaves very little profit even if you were lucky enough to catch the entirety of the falls, but on the other hand losses should be limited too even if you didnt catch the high. Plus, i prefer to be in this market on the short side rather than risk trying to catch a falling knife later.

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...Unfortunately, there is no real way of confirming whether it is the next leg down, or just a correction of Friday's rise at this stage. There has not been enough wave pattern to say with any confidence. Plus, given the nature of the rise late Thursday/Friday (basically a one shot higher) there is no hook to say if it trades below that level then it ought to continue down.

 

AGREED.

FAILED ALREADY? Nope

=====

 

Bloomberg's reportage today makes it sound like the fillip from the bailout has failed already.

But if you look more closely, that's not the case.

 

Yesterday's drop (was on lighter volume than prior days) and it still looks like a "normal" retracement

aa2ov5.gif

 

Considering the huge jump in oil and the CRB index (biggest since 1952),

that's not quite the disaster that Bloomberg has painted

 

At minimum, we need a C-wave up to SPY-128 or so.

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// Support's around SPY-120, and then 118.6 //

SPY: Last [Tick] 118.55[ + ]

Change -2.76

% Change -2.28%

 

VIX back up too, as some fears return:

VIX: Last [Tick] 35.72[ + ]

Change 1.87

% Change 5.52%

Note: High of Day: 36.08

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AGREED.

FAILED ALREADY? Nope

=====

 

At minimum, we need a C-wave up to SPY-128 or so.

 

Not entirely convinced, but either way traders need to be on their toes here as this is most likely a 3rd of a 3rd wave which means that the markets should really plunge in the very near future. We could obviously get a rise now to above Friday's highs, and i wouldn't be overly surprised to see a sharp rise here, but i think the odds favour it stopping beneath the Friday highs if it does come about.

 

Anyways, the markets are obviously very skittish right now and waiting on the events in the US, so any 'positive' decision there could easily trigger a short term bout of euphoria. But, if this is the 3rd of the 3rd then the Dow should soon rapidly plunge below 10,000 and the S&P to 1000 and below. The falls, if my call is right here, should be the fastest and biggest in the last decade.

 

(The Dow is currently 10,868 in after hours trading).

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Not entirely convinced, but either way traders need to be on their toes here as this is most likely a 3rd of a 3rd wave which means that the markets should really plunge in the very near future. We could obviously get a rise now to above Friday's highs, and i wouldn't be overly surprised to see a sharp rise here, but i think the odds favour it stopping beneath the Friday highs if it does come about.

 

Anyways, the markets are obviously very skittish right now and waiting on the events in the US, so any 'positive' decision there could easily trigger a short term bout of euphoria. But, if this is the 3rd of the 3rd then the Dow should soon rapidly plunge below 10,000 and the S&P to 1000 and below. The falls, if my call is right here, should be the fastest and biggest in the last decade.

 

(The Dow is currently 10,868 in after hours trading).

If Congress doesn't pass "the plan", the Dow will shoot through 10,000 like there is no tomorrow. I think it goes without saying that there will be a crash if the plan doesn't get passed, and it is a question of how long the markets will wait for Congress before going into panic mode. Congress usually does not move fast and may feel it wants the time to reflect on the plan and not just be seen to be giving it the rubber stamp. You do wonder how long the markets will wait.

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If Congress doesn't pass "the plan", the Dow will shoot through 10,000 like there is no tomorrow. I think it goes without saying that there will be a crash if the plan doesn't get passed, and it is a question of how long the markets will wait for Congress before going into panic mode. Congress usually does not move fast and may feel it wants the time to reflect on the plan and not just be seen to be giving it the rubber stamp. You do wonder how long the markets will wait.

 

I would be amazed if we dont get a plan of some kind, but the markets appear to be set for massive falls next week (purely from a wave count perspective) so even if we do i think the markets will be disappointed.

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I would be amazed if we dont get a plan of some kind, but the markets appear to be set for massive falls next week (purely from a wave count perspective) so even if we do i think the markets will be disappointed.

You could be right, but the difference between no plan or any plan being passed is probably the difference between a 3-5% fall or a 20%+ fall in the market. There will most likely be a plan, but it may turn out to be not exactly to the markets liking once they look at the fine details. No plan, or if it is rejected = crash.

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...Ignoring the media etc and concentrating purely on the pattern suggests that wave ii up should be nearly over, if it isn’t already, and that wave iii down should probably start this coming week. Furthermore, given the size and steepness of the falls and then rise to date and given that 3rd waves are usually the largest, it suggests that there should be a real collapse ahead, a mini crash even.

 

quote]

 

Bingo. Thank you Mr Elliott Wave. Glad i bothered to learn this tricky craft over the last 8 years.

 

I posted this on Saturday, the day after the markets rose by record amounts. Concentrating on the pattern and ignoring media crap has allowed me to benefit from the entirety of the falls since then.

 

The Dow a few mins ago was at 10430, down below the lows of nearly two weeks ago and down from near 11500 when i posted the above. I have taken some profits, so i cant lose from here.

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Furthermore, given the size and steepness of the falls and then rise to date and given that 3rd waves are usually the largest, it suggests that there should be a real collapse ahead, a mini crash even.

 

Today's falls are massive. The Dow closed around 770 points down (still settling) this is the largest points decline ever.

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Today's falls are massive. The Dow closed around 770 points down (still settling) this is the largest points decline ever.

 

WATCH this: ( I make it to be the 13 Aug. 2004 Low at SPX-1060/)

See the World stock, and Recession/Depression threads for charts

 

(from the How will it play out? thread):

Possibly this:

 

+ Stock market low in the next day or two (target: SPX-1060),

+ A multi-week rally

+ A lower low, later this year or in 2009

+ Escalating job losses

+ More efforts of the Fed to pump in liquidity, which will help make some stock rallies

 

The US must eventually address:

- It uses too much foreign capital

- It uses too much foreign oil

- It overconsumes (as do may countries in Europe)

- It overborrows

- It has an inappropriate "living arrangement", and so must retrofit & restructure its suburbs

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