PANIC!!!!! (Strategies for those long)

[It's Snake Pliskin]

This is a heathy correction.

Lucky we are having it because if the market had have kept going verticle we might have had a real crash. pe's will start to look more attractive soon, and the specuative money is being shaken out of resources, especially uranium.

A nice healthy correction.

Everyone keep their head.

Good words Kennas.

The rabbits are getting over reactive in their misunderstanding of what goes on in a chaotic world.

 

[Sean K]

Sure, but that's one hell of a wave 3 (assuming it is), so 4 is a LONG way down... even if it is a bull...

I thought it was a 5. Now A. Maybe. Can you post your count up Mag.

These are my 3 year and 1 year, both with wave 5s.

There's a couple of anomolies in the 3 year, but it's smoothed out on the monthy.
On the 1 year, I know wave 3 supposed to be the longest, but hey, it fits here!

I don't rule out another 5 wave up after this correction.

 

[Sean K]

I thought it was a 5. Now A. Maybe. Can you post your count up Mag.

These are my 3 year and 1 year, both with wave 5s.

There's a couple of anomolies in the 3 year, but it's smoothed out on the monthy.
On the 1 year, I know wave 3 supposed to be the longest, but hey, it fits here!

I don't rule out another 5 wave up after this correction.

Disclaimer: My basic knowledge on this maybe too basic and therefore anything I say could be rubbish....

 

[Rafa]

Disclaimer: My basic knowledge on this maybe too basic and therefore anything I say could be rubbish....

hehehe

Sorry, but this is the funniest thing i have heard all day...

 

[Magdoran]

I thought it was a 5. Now A. Maybe. Can you post your count up Mag.

These are my 3 year and 1 year, both with wave 5s.

There's a couple of anomolies in the 3 year, but it's smoothed out on the monthy.
On the 1 year, I know wave 3 supposed to be the longest, but hey, it fits here!

I don't rule out another 5 wave up after this correction.

That’s a classic McLaren “3 thrust” pattern you have there on your chart. That looks like the top of wave 3 at the high, depending on your count (especially if you look at the base count as having different degrees in action, and the ED extended 5th wave in the next degree down over the past couple of months or so). Wavepicker is the one to ask re the most accurate counts though…

Sure, fully expect a struggling wave 5 up after this correction is done... McLaren is calling for a correction to set up the 2008 bull drive... But the wave 4 I'd expect to be prolonged and choppy as hell...

 

[tech/a]

Kenna's

Your one year wave count cant be correct as wave 3 is the shortest wave.

Moggi thats an easy one you should have picked that!!!

 

[tech/a]

I'd written up a whole heap and replied in edit from the last post to Kenna's.
Got called away and 500 words got wiped due to the 20 min expiry time.
Cant be bothered writing it all up again but here are the charts.

Top chart is weekly and the bottom daily.
Kenna's no often in indexes the 5th wave is the longest the 3 rd wave can never be the shortest. And yes if its wrong then the whole count is incorrect.

 

[Sean K]

Kenna's

Your one year wave count cant be correct as wave 3 is the shortest wave.

Moggi thats an easy one you should have picked that!!!

Yes, the rule is that it can't be the shortest, but as I inferred in the post about it supposed to be the longest, that perhaps it might be wrong. If this rule is broken, does invalidate the entire count? If so, I can't see how a count can fit into the chart. Perhaps EW is invalid for the XAO?

 

[Sean K]

Thanks. I see you've started the count from May 05. Looks like it fits ok there, but is this just convenient? Has everyone else started the count there? Perhaps that's where I've gone wrong here...

 

[tech/a]

Kenna's this may clear things up.

Radge has a count on his "Chartist site" and its different to mine both come to the same result. I may well be incorrect in "Exactness, but I believe both are valid. I'm sure if Radge sees this he may comment.
He's the expert I'm the Student.

 

[Sean K]

Kenna's this may clear things up.

Radge has a count on his "Chartist site" and its different to mine both come to the same result. I may well be incorrect in "Exactness, but I believe both are valid. I'm sure if Radge sees this he may comment.
He's the expert I'm the Student.

Cheers. Perhaps I better join myself.

 

[Kauri]

And hey I'm the odd man out again.. . But it's all a learning curve.

Better post a chart I guess... mm won't post???

 

[Kauri]

gotcha....

 

[tech/a]

Kenna's.

Yes I know what you mean. One of the hardest thing to get your head around. The dynamics of the wave counts. I'm certain you'll get practitioners who will argue all day as to which count is correct. I try to have the rules satisfied without any rule which cannot be broken --broken. If it is then I do another count.
Often the question is how far back do we go.

Most wave 5s develop from triangles so I look for them to find completing wave 5s to start new counts. Generally wave 1 of the final wave is nested in the triangle.
As for validity which is often questioned (and I have/had questioned it for years myself) I need the following answered:
(1) Where is the trade relative to the current move?
(2) Where is it likely to go?
(3) When is it likely to get there?
(4) At what point will the analysis either be validated OR invalidated?

Elliot is the only analysis that Ive found that can answer all 4 in the way I feel comfortable with.
It never ceases to amaze me with its accuracy and I'm no expert.

Experts get it spot!
Oneday in a few years. Its worth the effort.---well I think so.

Beat me to it (Added a little adjustment.)

 

[gavmit63]

Re: PANIC!!!!!

The pullback was well overdue and I for one have a few stocks on my radar to add to my long term holdings should the price be right once the dust has settled.

I'm with Pager on this one. Looking forward to picking up some stocks on my watch list at reasonable prices.

 

[Magdoran]

Kenna's

Your one year wave count cant be correct as wave 3 is the shortest wave.

Moggi thats an easy one you should have picked that!!!

No, Daffy, I was talking about the 3 in the next degree up, but agreeing with Kennas that the last drive up was an extended 5th wave, but in an ending diagonal with a smaller degree 5 wave strucure in the extension of the smaller degree 5th wave... consistent with Prechter's model for ED...

 

[MichaelD]

Well, here's my scorecard for this correction to date after having been caught napping and being entirely long at close of trade last Tuesday.

1. All my short term longs are now wound up, leaving me with 5 short term losses in a row, 4 of which were small/moderate sub 1R losses and one of which was 1.04R. The exit strategy I use for this system was designed to take advantage of dead cat bounces to improve the exit, and I'm very pleased to see that its first real test with real money worked out so well. The nett reduction in my overall trading capital was 1% or so. Considering the great run up over the last few months with this system, it's a perfectly acceptable and within specification drawdown (10% drawdown of the "play money" pot allocated to the system, 1% of overall trading capital).

2. No long term long positions have yet hit stops, but I suspect a few will tomorrow. Pretty much all of them are pyramided multi-R trades, so if they do close, it will be long term trend following payday in the next few days.

3. I'm now set to go short with my short term system as of tomorrow. I dabbled in shorting unsuccessfully last year, but came up with another system which has been paper trading for six months with an acceptable positive expectancy - the trading signals are there in abundance for tomorrow, so here goes with real money.


The biggest difference for me in comparing what happened last May with the last week is in my mental approach - the current market conditions simply are what they are as far as I am concerned, and I'm looking forward to the challenges presented, not reeling in pain.

 

[Magdoran]

gotcha....

And where you have the two 5s at the top is where the major 3 is in the next degree up... we think...

 

[mrWoodo]

I am a fan of the Money Flow Index indicator (this is the green line in the attached chart, overlaid on top of the all ords). For the last three corrections, I've drawn yellow lines on the approximate date the market bottomed out. For these three dates, the MFI percentage was 9%, 33% and 22% respectively. (generalising a bit, but <25% can be a potential bottoming out). What worries me is today the MFI is sitting still in the upper band, at 81% ! I would hazard a guess that there is still a fair way to go before we see a bottom, and a corresponding 'oversold' MFI to match. My guess is 5200. (The trend line I've drawn dates back to early '03). Sorry the chart is a bit cluttered, my disclaimer is that I'm a novice so it won't really matter if I'm totally wrong


edit - whoops, stuffed it, uploaded a new chart

 

[nizar]

3. I'm now set to go short with my short term system as of tomorrow. I dabbled in shorting unsuccessfully last year, but came up with another system which has been paper trading for six months with an acceptable positive expectancy - the trading signals are there in abundance for tomorrow, so here goes with real money.

Why have you waited until now to go short?
Your entry gave No entry signals until now?