The Dow is in a precarious place today on the intermediate time frames. A look at the 60 minute chart shows us setting up for a Stochastic Continuation Sell. However, the Elliott shows that we have recently bottomed out in a Wave 5. In times like these, we are often asked which one outweighs the other?
The Stochastic is a great trade, made even better by our proprietary False Bar. However, the Elliott out ranks the Stochastic trade, as long as the market is following the Elliott rules. In this case, we have good divergence between the Oscillator during Wave 3 and that of Wave 5.
If you're not already long on the 60 minute chart, then there is not much to do but wait. At this poiint, one of 3 things should happen:
1. There is an XTL Breakout on the 60 minute chart showing that we are initiating an up trend on this time frame.
2. The MOB to the top side will hold, no XTL breakout will trigger, and we should sell off to new lows or a retest of the low.
3. The market will just consolidate here for awhile, leaving us all wondering and waiting where it will go next.
My mantra in trading is to be prepared. As long as you understand the possibilities, and know how to behave in any one of the scenarios, then you will be just fine. In order to not be surprised by what happens, we must do an effective job of learning from the past. My past experience tells me one of those three things should happen, and that same experience gives me trust in my tools to show me the opportunities.
Be prepared!
what is YM61 symbol
is this chart shows $indu symbol. It does not look the same as the $indu symbol
Thank you
Posted by: ahmed | February 19, 2009 at 05:38 PM
The wave 4 setup on the 3min S&P mini's (1220pm est 20Feb09) was textbook. It moved so quickly to a new low that I was stopped out(not without a nice gain). It is still going on as I type this note. MJ
Posted by: MikeJ | February 20, 2009 at 09:58 AM
Ahmed, the symbol I was using is YM #F, which is the continuation contract symbol for the Dow Futures. It runs very closely with $INDU, but not exact. It is simply the difference between the Futures prices and the Index prices. I hope that is helpful.
Posted by: Nate McCartney | February 21, 2009 at 09:21 AM
Mike, I'm glad that worked out well for you!
Posted by: Nate McCartney | February 21, 2009 at 09:21 AM
Is it possible to address the topic of what SPX leg we are in terms of the Elliott wave cycle in todays member event, in view of the comments by Robert Prechter last week.
Thanks
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