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waveslider

Market Wizard
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Posts posted by waveslider

  3. 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.

  9. Posted

    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

  10. Posted

    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

  12. Posted

    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.

  13. Posted

    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?

  14. Posted

    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.

  17. Posted

    example:

     

    Ranging system:

     

    entry: Fade upper/ lower Bollinger bands

    exit: close trade at mean

     

    Trending system

     

    entry: breakout after retracement to a trending moving average.

    exit: trailing "x" avg true ranges

     

    These "canned" systems certainly do not outperform on their own due to their under-performance in the unfavorable market mode.

     

    The next step would be to examine the equity curves of these systems as a time series through the lens of a Neural Net. If the neural net indicated that the equity curve would rise for one of the systems, might would take the trade. In a sense it's just a confirmation of your signal. One could take 100 various systems and examine the NN consensus, etc.

     

    Make sense? I'd be surprised if this isn't being done somewhere..

  18. Posted

    I wonder if NN users apply their technology to basic systems performance (equity curves) instead of price time series.

     

    The age old challenge is to apply a trending system to a trending market and fading system to a ranging market. The problem is of course when to apply which, and to know in advance that a market is likely to slip into a mean reversion or trending mode. Basic systems using archaic indicators can identify profitable zones in the proper circumstances, so why not apply Neural Nets to the equity curves of some of these systems to point out when it would be advantageous to act on their signals.

     

    Anyone doing that?

  22. Posted

    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.

  23. Posted

    Hi waveslider,

    The way I see it, the move up (or down) to pivot 2 is also designed to drag around people's emotions, and it's the interplay of pivots 2 and 5, pushing traders first one way, then the other, that gives the Wolfe Wave its unique power. In the bullish case, traders are giddy with euphoria going into pivot 2, which by definition (well, my definition at least) has to break into new highs, sucking in the breakout traders. Then they get slammed the other way into pivot 5, scaring the pants off of them and washing every last one of them out of their long positions, which they held through the chop between pivots 2 and 4. Well, that's the way I see the WW.

    Tasuki

     

    explained perfectly! I think it works even better on markets that are actively traded, where traders get frustrated..

  25. Posted

    Hey Tasuki, good to hear from you again. Must be getting hot down in SD these days, I heard the water temp got up into the 70's! We're having a little heat spell on the island here too.

     

    I do remember that Bulkowski took (downward sloping neckline) H&S as being one of the most successful longer term chart patterns. The 50/200 cross has been discussed quite a bit also.

    The problem is that everyone sees these, so back to the age old question - are chart patterns self fulfilling or a product of an underlying dynamic.

    With this WW it's the same argument.

    The target is there up in the 1140-1150 area.

    This 1040 area is previous support, now resistance. If prices flip over it there would likely be a big move higher, since technically the weekly charts are still bullish.

    WW does work plenty of times (particularly on lower time frames) , and is pretty accurate, and certainly self fulfilling too. But the dynamic I like about the pattern is the move from point 4 to point 5. If that move is strong enough and scary enough, and you see the pattern forming before hand, the participants in the scary move are like deer caught in headlights.

    I'm still more inclined to trust a pitchfork than most chart patterns, then again I personally don't trade chart patterns so I guess I don't trust any of them.

    Someday when I have a few little play accounts I would love to just trade patterns, they are fun..

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