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yeah looks like the reason for the rally today was my post yesterday. straight to the moon!

 

So, where are we now? See attached chart. Looks like that was one great call, Waveslider! Good job!

5aa7101c456a9_WolfeWavebullishESdailyTS01.thumb.png.a9aba35a803eafe9dcc7fb2399a5737b.png

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My feeling is that the flash crash is going to affect this pattern, distorting the 1-4 line target... ,maybe even an overshoot of the target line.. but it does look like the pattern will play out, some cheap calls would be a good way to play it.

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So target is the upsloping line P1-P4? (or does Wolfe label pivots from zero or with letters, all these different conventions!)

 

Cheers

 

nice, compare this chart to the bottom of pg 123 of Street Smarts book... they are basically identical. buy the reversal with a stop under this low is the trading strategy associated with it.

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just thought I'd bump the thread as it looks like this target might actually get hit. Amazing the zigs and zags that will trick you along the way.

Certainly the market is show strong resilience even with oscillators peaking and market breadth falling.

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To all,

See attached. Looks like a near perfect bearish WW setting up on the Dow.

1) pivot 1 in middle of range

2) pivot 2 scared the pants off investors

3) pivots 3 and 4 lulled them to sleep

4) pivot 5 (not sure it's formed yet) will, I trust, give investors (false?) hope

5) target would be somewhere south of 9500

 

Tasuki

5aa71032cb5fd_WolfeWaveonDow.thumb.png.feef556430a503cef5fe631770864db1.png

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Agree Tasuki!

I like how quickly that 4-5 move is developing - with no hesistations. It does look great.

 

The conflict I see is that the andrews pitchfork target (april high, July low) is still higher - -what do you think?

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Battle of the Patterns.

See attached charts of Dow and SPY.

Both forks do look bullish (very, actually), but both have met their initial, official objective--the median line. Note too that both forks are pretty steep. The chance of price continuing up to the next objective, the upper medianline parallel, is (IMHO) vanishingly small. So, if they don't meet that lofty goal, what will they do? Fail, of course, but how and when is the question.

 

That Wolfe Wave I drew has a bit further it can go to make pivot 5 before it needs to turn down (for the pattern to work) so we may find that both patterns work, to a degree.

 

Like they say, may you live in interesting times.

 

Tasuki

5aa710334f9c5_Dowfork.thumb.png.4e4123f1491418c53da0db1c99a948f6.png

5aa710335838a_SPYfork.thumb.png.9211d4f0ae329c79fc9dd2d7b910b10f.png

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you know, I was looking at a bigger scale, maybe weekly chart would demonstrate it better.. sorry my charting is updating right now..

anyway for the pitchfork, point 2 would be the high in april, the low in july. That corresponds more with the original WW identified here months ago..

who knows, but volatility is still on the bullish side.

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Thanks Suri. Appreciate another perspective adding depth to the possibilities of current patterns. It seems like we are all a little bullish, but don't see this market action holding up for long. The possibility of blasting to new highs hasn't even been discussed... and since it hasn't I would imagine that we're not alone and not many would suspect it. A great motivation for the markets to do just that!

 

Have you had much luck with quantifying and testing patterns like gartley over large and diverse data/timeframes?

It seems like the Gartley patterns are somewhat rare in that they require certain harmonics in their set-ups.

 

waveslider

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Hello fellow traders, first post. I am not too familiar with Wolfe and waves but it's a good time to start reading about it so thank you for sharing all these charts.

 

On another front, my ultra-simplistic analysis tells me there is staunch support at 9900 dow, 1058 sp and 2130 naz. Staunch as in never having failed in over 10 years. And it has been tested twice already, on 6.27 and again on 8.22. So there you go, my simple view.

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Thanks Suri. Appreciate another perspective adding depth to the possibilities of current patterns. It seems like we are all a little bullish, but don't see this market action holding up for long. The possibility of blasting to new highs hasn't even been discussed... and since it hasn't I would imagine that we're not alone and not many would suspect it. A great motivation for the markets to do just that!

 

Have you had much luck with quantifying and testing patterns like gartley over large and diverse data/timeframes?

It seems like the Gartley patterns are somewhat rare in that they require certain harmonics in their set-ups.

 

waveslider

 

Hi Waveslider,

 

Thanks for your post...

 

I think the patterns I posted are near Perfect Gartleys and they should reach at least the Pattern Completion Zones (PCZ) marked on the charts. So far with the given X5 (5-point) rules, they fit Gartley Bullish patterns.

 

Currently I am finishing 4th version of Auto-Gartley (X5) detection algorithm. Looks like writing Auto-Gartley algorithms has been my fascination for the past 4-5 years. Once I complete this current version, I'll implement the Automation with new TS 9.0 to test various instruments and time-frames. Every year I build new ideas to write Auto-Gartley and I write it from scratch thinking this is it :) This year I may have a far better algorithm (that's what I thought Last year too :) At least now I have gathered knowledge the type of Gartleys (all 5-point patterns) work and when they fail and what are the pre-requisites etc. My current ABC Pattern detection/trading has been great and I am using that experience to build X5 patterns. ABC pattern is a critical part of all X5-patterns....

 

I'll try to post more X5 patterns soon...

 

Regards,

Suri

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I still don't get it, the pivot 3-4 from the chart must be in the channel. There is no channel unless 2 lows and 2 highs are made. So 1 & 3 must exist to draw a line, so does 2 & 4. I got this rule from investopedia but does't make sense. I think this pattern is classified are broadening pattern in the classical TA.

 

Torero, google "wolfe wave" to learn the pattern. Technically I would call it a descending wedge.

 

Point 2 is the recent high. Point five is the bar from friday, which penetrated the 1-3 line.

 

The target line is 1-4. Sorry, I should have labeled this chart better.

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... i am curious as to what kind of gartley patterns these are

... the gartley i am familiar with has a 0.618 as its first retracement.

... and bearish butterfly a 0.786 as its first retracement.

 

...but this has a 50-something % as the first retracement

-------------------------------------------------------------

 

...also.... i don't understand why your expectation is that the pattern will be completed

... i thought that there was a bearish implication if and only if the pattern completes

 

...i have never read anything stating that if the first two retracements were completed.... that that would somehow cause the third retracement to be completed correctly

 

--------------------------------------------------------------------

....please forgive me if i am ignorant about these patterns.

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... i am curious as to what kind of gartley patterns these are

... the gartley i am familiar with has a 0.618 as its first retracement.

... and bearish butterfly a 0.786 as its first retracement.

 

...but this has a 50-something % as the first retracement

-------------------------------------------------------------

 

...also.... i don't understand why your expectation is that the pattern will be completed

... i thought that there was a bearish implication if and only if the pattern completes

 

...i have never read anything stating that if the first two retracements were completed.... that that would somehow cause the third retracement to be completed correctly

 

--------------------------------------------------------------------

....please forgive me if i am ignorant about these patterns.

 

 

Hi,

 

You do raise very good points.. When H.M. Gartley first wrote, he wrote them as Gartley patterns only. Later Larry Pesavento, Bryce Gilmore, Scott Carney did great work and gave them various ratios and lengths and various pattern names (Crab, Butterfly, Bat, Gartley)...

 

To my knowledge, Scott Carney's work is brilliant regarding the Harmonic Patterns.

All three books from Scott Carney have Harmonic Patterns with great examples.

 

To avoid this massive confusion, I call all of them X5 Patterns signifying 5-point patterns.

Also, for me the position of 'B' and 'D' identifies various form of patterns and tells what to expect. I also have a big poster (self-drawn) with all these patterns on my Trading room wall right above my trading workspace.

 

About B: If the ratio is upto 50% of XA, then it is a Bat with other key ratios. If the ratio is greater than 0.618 and upto 0.786 it may be Crab.. But if ratio is near 0.618 of XA it may be Gartley with lot of combinations of other leg ratios... Very rarely these ratios are precise and if they ever form, they are all called 'Prefect' patterns. I do identify various patterns with these ratios but it is too confusing. Hence, I call them all X5 patterns and focus on how to auto-identify X5 patterns (in code) and look for continuation (CD leg) OR Reversals (from D) to trade.

 

Now Looking at D, if D is within XA it may be Gartley or Bat, but if D is beyond XA range, then it may be Crab or Butterfly. So, knowing this situation, there are TWO targets possible. If Price reverses from D, the reversal is 0.786 to 0.886 of XA (within XA), then it is Gartley or Bat target (and a reversal zone). If Price is from 1.13 to 1.27 of XA then it is Crab or Butterfly target. Hence, I have two areas (targets) for Potential Reversal Zones (PRZ). Price action from these levels shows potential reversal trade setups.

 

I have been studying, building/trading Harmonic Patterns/Harmonic Ratios over 12+ years now along with other patterns and the theory behind them still fascinate me.

 

Hope It answers some of your questions.

 

Regards,

Suri

Edited by suriNotes

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Suri,

 

Have you ever tried dedicating some programming time to WW? It would be interesting to hear statistics on any of the patterns you detailed above..

 

% patterns completed profitable

average drawdown %

Risk/reward

 

I can see some value in what your are doing, but say at this point where we are right now. Would you be long or short biased?

It seems like there is always a target beyond, and if there is not then a whole new trend might develop that doesn't fit the pattern.

 

I guess my question is, what is it that would give you the confidence to switch to short bias here. Would it be the statistical probability of the patterns you detail?

 

waveslider

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Suri,

 

Have you ever tried dedicating some programming time to WW? It would be interesting to hear statistics on any of the patterns you detailed above..

 

% patterns completed profitable

average drawdown %

Risk/reward

 

I can see some value in what your are doing, but say at this point where we are right now. Would you be long or short biased?

It seems like there is always a target beyond, and if there is not then a whole new trend might develop that doesn't fit the pattern.

 

I guess my question is, what is it that would give you the confidence to switch to short bias here. Would it be the statistical probability of the patterns you detail?

 

waveslider

 

 

Hi Waveslider,

 

I have never written WolfeWave code... Few times thought of it, but never did.

I do see the confluence of Harmonic Patterns, WW and Pitchforks tools as great trading arsenal. Recently I have been picking some great interest in the Pitchforks... There is not much of WW information in the public domain other than some snippets.

 

I use the Index/Sector Patterns to trade underlying instruments (Equities/Options) and I am still Long on many positions initiated in the last 4-5 weeks. Some of the similar Gartley patterns existed in GE, GS, GOOG already exited the trades.

 

Pattern reversal zones are (only) suggested by the Pattern with target level confluences.

Gartley Pattern itself does not show any Trend reversals, in my view. I use another set of tools (exhaustion, price-action etc.) to determine if the Underlying trend has changed from PRZs. Also, one-day reversals rarely qualify for a Trend-Reversal. I do prefer the reversals from second/third PRZs than from first PRZ.

 

Here is an example of Gartley formation in recent NQ. See the 1990-2020 area... Although Gartley suggested a first PRZ area, it is actually a Distribution area than a

trend-reversal area.

 

Hope I answered your query.

 

 

Regards,

Suri

 

attachment.php?attachmentid=22673&stc=1&d=1287535802

NQ_Oct1910.gif.0c276cae55c0ead194fee10d25b0edd4.gif

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