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waveslider

Wolfe

By waveslider, in Market News & Analysis

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nandv    10

nandv
Posted

Today's major indices (SPY, Qs, etc) are going well according to the plan so far, waiting for the 'peak' then drop, but I really don't know when...

 

Today's TBT (and TLT) are of perfect actions, as seen below, the hourly and daily charts.

It is very important to have a 'smaller contrary wave to be embedded in the point 3-4-5 of the larger wave' to make the wave perfect.

We have here a perfect example (notice the hourly is a bullish wave embedded in the larger daily bearish wave).

 

We'll see if indeed it reach the top, then drop...

 

As a good exercise, you can try to plot the same (in reverse howerver) of TLT and see if indeed there's a bearish hourly wave and then a bullish daily wave for TLT.

 

Enjoy.

 

TBT Hourly

 

TBT Daily

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elovemer    10

elovemer
Posted

please forgive my intrusion.

i also don't see any wolfe wave in these charts.

 

you are the self-proclaimed expert here so i can't say i am correct.

...but according to my understanding of wolfe waves, points 1,3,5 should form a trendline

Wolfe Wave Home Page

....also...1,3,5 should form a series of either higher lows or lower highs

 

i notice that all your charts are from TOS .

i also use TOS for its charting... but would not dream of using it for actual trading because of its unreliability.

 

sorry for the intrusion.....to those who don't see any wolfe waves here... you are not the only one

 

 

 

 

 

 

 

 

Some additional comments on this thread, in predicting the market path.

 

1. It is NOT recommended to predict, or even act on the WW waves other than from P5 to target. Ie., The charts I have posted so far are possible paths, based on potential WW formation.

 

2. In predicting the overall market path, one should look at all major indices to get confirmation. Today (I should have done this much sooner) we look at the RUT as belows, and the smaller bullish wave is formed (P5 is lower than P3), and we're on our way to the target (following the P1/P4 line). With this, there's no point doubting whether Q and SPY are still waiting for the P5 to go lower than P3....

 

The last chart is, once the smaller bullish wave completes, then the larger bearish wave will form, now all we have to do is to wait for the P5 overshoot to complete. This again, is a MAJOR challenge. Often times the clue is big spikes in volume.

 

RUT hourly

 

RUT daily

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nandv    10

nandv
Posted

Your comment is understandable. Please look at Bill Wolfe's web page, under FAQ, and I quote:

 

"

Bill,

I see so much stuff on Wolfe Waves. How do I know right from wrong?

By taking my course.

Do yourself a favor and avoid chat rooms, like the plague. It is truly the blind leading the blind. For the zillionth time I will repeat: I have never seen a properly drawn Wolfe Wave on the Internet. More importantly, they are all drawn after the fact. It is like giving a child a crayon and having them play connect the dots. My students can often frame out the entire Wave—in advance—with only three points plotted.

"

 

If the rules are all WW is about on the website, what else Bill will teach, for his class, for $3K??

I don't claim to be a WW expert, after taking the class, still seeing waves not working, or can't forecast it in advance. My posting here is for for the sole purpose of showing the true power of WW, when used properly.

If you look at all my posting, it's like Bill said, frame out the entire wave, in advance.

 

For those who pay attention to my TBT post, hope you have chased the last leg to target, and get out, since it is going down.

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elovemer    10

elovemer
Posted

it does not matter if anyone pays attention to you.

all that matters is that you placed a trade which is going to be profitable.

since you have not posted any entry or exit .... it must be assumed that you are not concerned with posting entries or exits.

 

 

 

Your comment is understandable. Please look at Bill Wolfe's web page, under FAQ, and I quote:

For those who pay attention to my TBT post, hope you have chased the last leg to target, and get out, since it is going down.

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waveslider    10

waveslider
Posted

Nandv -

I watch TLT a lot and remember your comments on the WW pattern. Would you mind doing a follow up analysis?

Looks like there may be another one on the shorter time frame. Either that or this is about to break down and accelerate.

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suriNotes    11

suriNotes
Posted (edited)
NIce one Suri,

Can you see what it was in the pattern that made it work? What are your observations?

 

 

Hi Waveslider,

 

Thanks for your post/comments.

 

I am sure you already know I ONLY trade Patterns. I focus mainly from a broader perspective of looking if a Pattern is Reversal or Continuous first. I consider WolfeWave as a Reversal pattern. So, the rules for reversal patterns must fit into the pattern to confirm. As part of my reversal rules, I look for price-action within the pattern formation until it provides a trade-trigger or fails the pattern. This concept is part of my 'Market Context' analysis. I know every trader has (should have) their own theory of 'Market Context' in analyzing Patterns or Setups.

 

When I am analyzing Stocks I look for patterns mainly in Daily Charts (at EOD) and look the first hour and the last hour price-action and see where and how price opened and where and how price closed. This Open/Close price-action must confirm underlying Pattern form, size and direction for the pattern to succeed. Looking at Daily Open/Closes raises 'Gap' theory. I do not trade GAPS but I like the GAP formations inside the pattern I am analyzing to confirm the validity of the pattern and direction. So, in a nut-shell, I like to see GAP Ups in a Bullish Pattern and vice-versa in Bearish Patterns. As part of this GAP theory, in a bullish pattern, if a bearish gap (downside) forms, I like to see it fill the SAME DAY. This confirms underlying Bullish Pattern and vice-versa for Bearish patterns. Case in point is: Recent SPX action from Sep. 2010. Most down-gaps are closed by EOD as the underlying strength is Bullish.

 

Another commonly known theory of Bullish patterns is Prices must show Higher-Highs and Higher-Lows with price divergence in momentum based indicators (if any). Also, the inner patterns (Patterns within Patterns) and its price-action must be bullish. Here is an article I wrote on this topic ("Patterns within Patterns"), published Nov. 2010 in TRADERS' magazine.

 

http://www.surinotes.com/Tradestation/articles/SuriDuddella_PatternsWithinPatterns_Nov2010.pdf

 

Analysis of ISRG chart...

 

In the ISRG pattern, the Wolfe Wave pattern is NOT quite visible for me until Dec.10th or so, as ISRG made lower-lows in its previous failed attempts to signal a bottom. But once ISRG made a higher-low on Dec. 17th (around $240, my first post on TL about ISRG WW), I thought it has a potential of WW and now I am interested to watch its price action to confirm a Reversal for me to trade. So, I look for HHs and HLs in the trends and most bearish PA failed within the setup. And many days I watched ISRG's Daily and First Hour and Last Hour Price-Action for a clear sign to trigger a trade. At this time there was a near-perfect ABC Bullish price-action (see my Chart) indicating both Wolfe Wave and ABC Setup. Finally, the signal came on Jan. 03, as ISRG Gapped Up and posted a wide-range bar (almost a Breakout) with a Higher-Low at $269. At this point, there are two things certain... It is bottomed out and it has ABC Bullish pattern and Wolfe-Wave pattern with bullish Gap/and potential Breakout from the consolidation. This Gap provides a key support area (for STOPs). Most days after that price-action was clearly evident. Now, setting up targets was easy as UpperTrendline of WW (almost coinciding with 200-SMA) around $300 along with ABC's (162%AB) target: $300. The stops are trailed after entry. On Jan. 20th, ISRG announced great earnings (with their strong da Vinci Robot sales) and ISRG gapped open $40+ to complete WW as it traded at a high of $334 on Jan. 21st.

 

Regards,

Suri

 

ISRG analysis from Jan. 11, 2011.

 

attachment.php?attachmentid=23597&stc=1&d=1295716148

ISRG_ABC_Jan1111.gif.832ab612aa4f88a07dd25eb8e8e14c0b.gif

Edited by suriNotes

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altean    10

altean
Posted

I really loved Wolfe Waves in the beginning. Backtest of TF and NQ looked promising, but papertrading was at best around zero. It looks to me that you can easily find Wolfe wave on finished chart, but if you are trading in real-time it fails as often as it succeeds.:(

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TheNegotiator    13

TheNegotiator
Posted

Not may area but thought I'd reply to this:

 

I really loved Wolfe Waves in the beginning. Backtest of TF and NQ looked promising, but papertrading was at best around zero. It looks to me that you can easily find Wolfe wave on finished chart, but if you are trading in real-time it fails as often as it succeeds.:(

 

In my experience, hard work and practise are essential to succeed with any trading methodology. Learning the nuances of specific markets and methods can make a massive difference. Backtesting is a skill in itself and should never be assumed that the results you get are likely in the real world. Even if you are great at backtesting. Finally, money management strategies that you employ can make or break you. So, so important.

 

Anyway, just my thoughts on that.

 

TheNegotiator.

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