The setup for the big trade

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Mon, Jan 2, 2017 - 11:19am
Pete
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@eclectic

I am half-kidding--I don't really mind. But that horseflesh is beyond tenderized at this point.

As for your technical point about 5 vs 3 waves up at the top, I agree with you. I cannot see a 5 in the first wave down, only a 3 per Elliott's rules. The thing is, I wouldn't put too much stock in either interpretation because the EWP "rules" seem to have morphed over the years in adaptation to feedback loops created by traders who use EW theory. This is characteristic of a complex system. I know this is painful when you want to have a strict rule set. You can develop one, surely, but it will only approximate reality despite your best efforts. The market is constantly "evolving". The end result of this, philosophically and practically, is the necessity of strict risk-management unless you want to lose money. You take your best shot and then cover your butt if you are wrong. And you stay away from anyone who is very certain of his prediction of the future.

There is a lot of classically faulty EW "analysis" on the web, where the rule of alternation of the corrective waves within an impulse wave is ignored, for example. Plus, and I think it's important, futures contracts were not in existence when Elliott made his observations.

My point is, markets are radically different in many ways. Even the best minds out there struggle with today's markets.

Mon, Jan 2, 2017 - 12:37pm Pete
eclectic
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Pete: More on EW

(:-) Definitely tastes better the next day.

Here is a post by a chap named 'pedro deleon' over on GoldTent. I have zero contact w/anyone over there and I do not know Mr. DeLeon. To quote him:

"I disagree with his LT count, as I have his III IV and V at one degree lower (ie, 3, 4, 5). At the same degree as the 1952 to 1970 move, which becomes the wave 2. So the 2011 high becomes 5 of III."

He continues:

"Joe is correct that “we have a problem” in gold, in that the ongoing B wave can take various forms, and that none of the options can be ruled out yet. At least not in EW terms."

You provide good advice about EW. Too many cooks in the kitchen. Also, I would use only physical where most analysts seem to use the futures. And that's how I came to be 'beating that dead horse' about 3 vs 5 at the top.

Video unavailable
Tue, Jan 3, 2017 - 11:12am
Pete
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Great link eclectic

Thanks for that terrific link eclectic. That is the most coherent, level-headed presentation I've seen on those markets. Definitely remembering Trader Joe! At least what I see from my Andrews/Babson perspective is not out of synch with what Trader Joe is saying is possible. I feel like I have a buddy out there.

Expanding and contracting diagonals for first waves--first time I've ever heard of it, not that that means anything.

Andrews did most of his analysis on Commodity Price Charts. There was no intraday data back then. Fortunately, the hourly movements also lend themselves to the AR methods and are often a big help in analysis and the fine tuning of entry and exit points.

Love the 78.6% and 90% R references in the video. My posted possible scenario terminates at/near 78.6.

Wed, Jan 4, 2017 - 7:08pm
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The same Trader Joe made a

The same Trader Joe made a video critique of the Elliot Wave Theory last year.

It's an objective and realistic summary of difficulties which of course are the limitations applying to EW's positive attributes:

https://www.youtube.com/watch?v=dXXVjYjBYRw

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Wed, Jan 4, 2017 - 8:58pm
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Basis intraday, Gold now has

Basis intraday, Gold now has an ORB to the upside, leaving the end of year thin trading week below, and the pivot established at/around 19 December stands.

Round number resistance proximate and likely to be tested next. Short term upside momentum remains. The 1200 level which is significant, gold is below that. This is a retest to the upside at the moment. That is why I am sitting in previously described position.

End of Jan there is a pivot expectation. G-V is due to rise end of next week, and by mid Jan to end of Jan G-V suggests geopolitical interactions will be running in high energy mode. That's when the levels will likely get challenged and verdicts received as to the power of bulls and bears at these new levels.

I don't see either a clear buying or selling level which has reduced risk. If I was leveraged I'd be out long ago, but I'm not and can't be dislodged. No further action indicated for me. It's just churning. Steady hand on the tiller and watch the waves toss the smaller boats around.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Thu, Jan 5, 2017 - 3:43am argentus maximus
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argentus maximus wrote:Basis

argentus maximus wrote:

Basis intraday, Gold now has an ORB to the upside, and the pivot established at/around 19 December stands.

I don't see either a clear buying or selling level which has reduced risk. If I was leveraged I'd be out long ago, but I'm not and can't be dislodged. No further action indicated for me. It's just churning. Steady hand on the tiller and watch the waves toss the smaller boats around.

Ah finally I think I was able to interpret the post. AM is already long since 19Dec and now he sits still in the boat looking at others trying to get in or being stopped out. Yes I like that. But mother nature makes things twice, is a horrific second low lurking around? Btw what is an ORB ? ORBit ...

Nice chart eclectic, Gold has an eight year pulse, it's like a clockwork, hopefully not an orange one. The last 8year green vertical line is corresponding to my own work "my own work" haha I am on my way to become a trader, hopefully a successful one.

Decoding (It's like playing Myst, do you remember that game. My brothers kids got it as a Christmas present and they loved it):

  1. Basis intraday, Gold now has an ORB to the upside, and the pivot established at/around 19 December stands. //Here he went long?
  2. I don't see either a clear buying or selling level which has reduced risk. //No, the buying opportunity was at point 1.
  3. If I was leveraged I'd be out long ago, //Like mid summer 2016? or due to volatility, choppy waves during bottoming process.
  4. but I'm not and can't be dislodged. // A second low coming? or no stops placed ?
  5. No further action indicated for me. // Let the trend be your friend, be right and sit tight.
  6. It's just churning. Steady hand on the tiller and watch the waves toss the smaller boats around // A little bit of turbulence, we just got airborne, but we are in a boat, or a plane, it doesn't matter ... so far so good
Thu, Jan 5, 2017 - 6:07am
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Translating trader-speak into English!

Trader language .... ORB = Opening Range Breakout.

For day trading, each new day may have a new trend direction. So how to establish the trend direction before deciding which is the correct game? Which is correct for the fresh day, to sell the highs or alternatively buy the lows? I need to have a way to deal with this.

Also the opening of a market is usually under reduced volume. Therefore the reduced volume trades are easier to Manipulate (if you wish) or merely to use for pulling stops (if you prefer that description) or merely for consolidation against the trend (which is the way I regard this pattern).

Applying practical traders' logic to the problem results is a possible early diagnosis that the early trades of a new session may be contra trend, may create what will later be seen as the high of a down day or the low of an up day. But we can't be sure. Also we need to have a level at which we perceive ourselves as being wrong, in other words we need a stop. Not a stop that gets harvested, in other words a better stop.

The first trades of the day are observed from the sideline. After eg a half hour or two half hour periods the opening trading range is considered. A breakout from this price zone is a opening range breakout. An ORB.

Set stops, trade.

But what if I am a longer term trader?

OK the market is fractal. The game is the same.

So in our case at Setup I have run a trend down from middle of last year. This downswing is mature. It may not be over, or it may continue. Odds favour continuation statistically by a tiny margin, but it's balanced and must choose. No certainty. But the Christmas break has interrupted down momentum. So the market is in pause mode. When it restarts, that will be a new session (longer term). So I chose to wait the first few days of 2017 out, establish a three day ORB. This is my new entry basis until more prices appear on the 2017 session.

Right now there are three pivots already under price acting as support or urgent exit warnings. The 19th Dec, a few days either side has an interim low which is now a few weeks old and is hardening. There is the retest of that and an upwards breakout as the next supportive pivot. And now there is a 3-day ORB breakout. Three levels under price to use. What is above price? Mainly a 1200 resistance level to be challenged. Also multiple fibonacci and fractional levels from the recent swings. Some volume levels.

Short term direction Up.

Medium term direction Stopped.

Long term direction Down or beginning pause. But retest of recent low not done yet.

Conclusion: A short term rally to try see where the top of the descending channel is located presently. Also if direction turns to the downside this may be very fast and gaps through levels should be considered possible and allowed for. Recently down has been faster than up.

Given that, for myself, the price did not get low enough to trigger my purchases. I sit on old longs looking for opportunity to increase them at defensive prices. The price of gold got to a good time pivot but when it got there it was above the price pivots I was waiting for. I still wait but must allow for possibility that that was it. However there are pivots in many markets about April and gold may return to get to my buying points later, so I can observe the other short term trading running around trying to deal with all this from the sidelines (in my long term long position). The swings I monitor will buffet their positions and make their stops difficult to manage resulting in problems retaining medium term positions.

It's a lot longer when I type it out like that!

P.S. Read Tony Crabel for more trading expertise of this kind, the little jobs and skills that get things done and make trading theory become trading practice.

Some day I will do a Reading Material Part 2 article for the AM blog. I did one on books about markets already - about a year ago. But by now the readers who were interested will have worked their way through those foundation books. I'll make a more advanced list in a new article to take things to a higher level. But it won't be the next blog essay. A couple of other articles are already in in the pipeline on other subjects and they will be ready first. AM

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Thu, Jan 5, 2017 - 9:05am argentus maximus
eclectic
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The Joe Ross books fit quite

The Joe Ross books fit quite well into the Cabrel genra as well for those who are committed to short term trading.

https://www.amazon.com/Trading-Book-Joe-Ross/dp/976810824X

Thu, Jan 5, 2017 - 9:19am
eclectic
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AN EW TECHNICAL SECRET?

Someone pointed out to me years ago there was a price gap in gold at the circa 1054 level. I don't believe I have ever seen this reported in the newsletter media. For those who believe in the technical concept that 'all gaps are filled' I thought this to be an extremely important observation, especially in light of the December, 2016 price lows.

Thu, Jan 5, 2017 - 11:14am
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Tx Am for your post, I guess

Tx Am for your post, I guess I have to do some more of my own work to try to figure out a potential top, I have a few ideas already. JNUG is demanding to own. I keep asking myself all the time, shall I lock in my profits or let it run for a little bit longer. . . already experienced a -22% correction 30 Dec, but I am used to volatility so no big deal.

Sorry for being ignorant but how long is short term ?

aha ok Google do exist, nope this is not inline with my plan. I have to rethink my strategies here.

Short-term trading refers to those trading strategies in stock market or futures market in which the time duration between entry and exit is within a range of few days to few weeks.

Thu, Jan 5, 2017 - 11:55am
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G-V?

Hi argentus, I'm a newbie and want to know about your G-V peak. What is G-V? Please share your knowledge on this! Many thanks!

Thu, Jan 5, 2017 - 1:30pm
eclectic
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Financial Times

The FT is often called the WSJ of London. Are there any London subscribers on this site who can verify the following change in reporting which has been the case for some time now. Way back in the day, readers could track the intra-day price movements of gold when those highs and lows for daily trading were reported in the commentary section. Here's a recent example of the reporting in statistical tabular form, but you will notice there is no running commentary about intra-day price action. Only the gold fixes are reported.

https://markets.ft.com/data/dataarchive/ajax/fetchreport?reportCode=GFCA&documentKey=688_GFCA_170104

Whatever the reason, they stopped reporting the data. I found this to be extremely useful because as often was the case, major turning points in the market occurred when there was a lower daily fix which was not confirmed by a new intra-day low, or a higher fix while intra-day prices recorded a new low. This pricing nuance seemed to telegraph a change in trend in addition to working with EW counts.

For example, here is the data for Dec 3, 2015.

A.M. Fix (lower than the P.M Fix) at 105o.60, January futures low at 1045.70

On December 17, 2015 a lower fix was recorded at 1049.40 while the January futures low was 1046.70.

In this example I had to use the futures price (not knowing if this will be as useful going forward) because as mentioned above, the FT no longer reports the intra-day data.

Can any FT subscribers confirm this data is no longer reported? I thank you for your feedback.

Fri, Jan 6, 2017 - 1:18am
Pete
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re this current rally...

Can anyone present a plausible EW count for the hourly chart?

Fri, Jan 6, 2017 - 9:37am muatuyeta2
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Hi muatuyeta2 There is a post

Hi muatuyeta2

There is a post in Setup approximately three months ago which explains as much as is in the public domain.

Short summary: G-V predicts when random events of a certain type will happen, and this includes repricing of assets. I never justified it's track record but merely post a 2-4 week look ahead of extreme level-dates and readers make up their own minds over time as their G-V knowledge base and experience increases.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Fri, Jan 6, 2017 - 9:38am Pete
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@Pete: Complexity is the USD

@Pete: Complexity in the USD crosses is high. Try doing it in silver-Euro or to a slightly lesser extent in silver-GBP and work out from there. It shoudldbe more productive of your time.

I have an RnP video in the pipeline showing cyclical and nonlinear (chaotic) structure and that probably will exclude several otherwise attractive EW counts.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Fri, Jan 6, 2017 - 9:52am
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Sold my JNUGgets yesterday, a

Sold my JNUGgets yesterday, a quick +100% in 2weeks was too tempting to harvest after the gap up.

AM's post helped me to take action and this funny guy called Clif High (some say he is high) said that some bond turmoil is coming in a few days. I am reading his Sci-Fi report as we 'speak'. A call for $600 silver will always whet my appetite. As a big Sci-Fi fan I just couldn't resist to buy the report. In this case a do not know if his talk about ancient cities below antarctica benefits his call for three digit silver. I wish him better luck than Mr Polny

Happy Thirteenday eve, please enjoy:

Clif High-2017 Predictions on Everything
Fri, Jan 6, 2017 - 10:59am
Pete
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What is Clif's track record?

...Otherwise, his predictions might be like the broken clock, accurate twice a day.

@ AM--is there downloadable free data for the crosses you recommend I look at?

Fri, Jan 6, 2017 - 11:27am Pete
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Try Netdania.com or

Try Netdania.com or Prorealtime.com

Pete wrote:
...Otherwise, his predictions might be like the broken clock, accurate twice a day.

@ AM--is there downloadable free data for the crosses you recommend I look at?

Here is a weekly, daily,4hourly set from Netdania:

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Fri, Jan 6, 2017 - 11:55am
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XAU-Eur Cross

The frequency spectrum for gold Euro Cross. The scales are W, D, 4H and the charts are adjusted to display the recent swing or swing to date:

This is Netdania. I prefer the Prorealtime charts a little more and used to use those, but Netdania are very good for FX and the price is right.

I use Esignal 12.4 for data and charts, and export the data into Amibroker for some work I haven't figured out how to do on Esignal yet.

US based analysts should look at other FX crosses to their favourite asset (eg Comex Gold) because the FX are linked via arbitrage trading, and sometimes you will see something in an FX cross that is not easy to see in the home currency (main chart). Also the FX crosses can be used in a breadth fashion. I posit that if something is going up in eg ten currencies, and those are the big FX assets, then that breadth is considerable, and an erroneous trade can be initiated in eg currency #11 due to lack of awareness of the sheer breadth and money momentum opposing the trade. Like standing in front of a locomotive and expecting it to stop in under a thousand yards.

And when all the currencies pull into line, the trend is usually coming to an end in the ones that were earliest. In other words, gold and silver are FX pairs like any other currency. With a few commodity and fixed interest behavioural traits thrown in.

argentus maximus Rhythm and Price http://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Fri, Jan 6, 2017 - 2:42pm
Solsson
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Oh my ... yesterday I saw

Oh my ... yesterday I saw 8.88 and I knew it was good I tried 6.66 this evening, but finally jumped back in at 6.72 wish me good luck, an ultra fast retest of the cup&handle breakout in GDXJ.

https://www.tfmetalsreport.com/comment/658001#comment-658001

My consciousness is connected with the trading Gods ... so far

I found this little interesting chart, worth another post here, of course we are at the little b by now:

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