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Simple Guy's Simple Outlook


simple guy

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OK... I see Doc set up a mini board here for my simple stuff

 

That said

 

Option 2 is that we dont go to the 975 gaps this week, and we start to move up off of Friday's close.... but SG doesnt think Option 2 happens... so I didnt bother posting more info on it.

 

Here is the bottom line on my thinking

 

Major wave 2 of the 3rd of a 3rd of a 3rd downwave in this bear market ended on or about Dec 2... at 1155 NDX

 

Wave 1 (of 5 waves now, stay with me) began there, and has NOT YET ended. It will end at 975 ish....IMO

 

Wave 2 of this 3rd major wave will begin there and move towards 1050 to 1065 ish...

 

This is when you want to get short and nastily short IMO....

 

Now, E waves are in 5 waves.... so when wave 3 bottoms around 774-788 on NDX... there is a wave 4 upward move (I'll update that down the road) and then a final wave 5 down to even lower lows....

 

I expect the market to bottom in early to mid march.... followed by a fairly powerful rally... but its too early for that... one week or so at a time

 

Re the QQQ index... 24.55 or so this week to bottom.... a move up to about $26.45 on the high end from there

 

Now this all could end up being wrong you know... just my SG ideas here... so dont assume this is gospel please.... but its how I view it right now. Im in cash and waiting....

 

I'll keep Y'all updated on the IDS as usual....

 

IM OUT, Go PATS

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First, let me say that, while I do have some basic knowledge of Elliott wave analysis, I do not rely exclusively on it in my trading and am by no means an expert Elliottician, so apologies if I say or ask something dumb below.

 

I was reviewing my Yahoo mail and noticed that two different free reporting services that I receive have both made basically one and the same call - they are calling for a significant low the next week, followed by yet another rally to a point above the December 2 high. I think that both services use Elliott Wave analysis, but one of them is quite technical and explicit about it, while the other does not say what their analysis is based on.

 

Basically, the idea is that we're in an ABC upward correction since the October 10 low - i.e., a major bear market rally. So far, so good. However, my e-wave analysis had concluded that this ABC correction is over and ended with the December 2 top. There clearly have been 3 waves in that movement.

 

The first service argues that, since the second of these 3 waves did not retrace 38.2% of the first one, the whole move from the October 10 low to the December 3 high was just wave A. They seem to think that since Dec 2 we've been in wave B. That wave is supposed to retrace 50% to 61.8% of the Oct 10 - Dec 2 move. Once it is over (like, the next week), it will be followed by yet another rally (wave C) to a point higher than the Dec 2 high.

 

They also admit that if this wave B retraces more than 61.8% of the Oct 10 - Dec 2 move, it would mean that their wave count is incorrect and they will have to redo it.

 

SG, does the above count make sense to you? The indicators that I use suggest that we aren't going to get another big rally any time soon - but I am always on the lookout to be proven wrong.

 

Regards,

Vesselin

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Yosh, when using ratio charts at StockCharts, always use line-style charts - not bar charts and not candlestick charts. The reason is because when you use ratio charts, StockCharts computes them by dividing all of the elements (Open/High/Low/Close) of the first component by only the Close value of the second component (instead of using the respective Open/High/Low/Close values of the second component). So, any ratio chart that charts anything but the Close value of the ratio is incorrect and misleading.

 

To illustrate what I mean, take a look at a ratio chart where both components are the same:

 

SharpChartv05.ServletDriver?chart=qqq:qqq,uu[l,a]dacaynay[dc][pf].gif

 

Common sense dictates that it should be a straight line at 1 - but it is not. As opposed to that, a line-style chart of the same ratio is correct:

 

SharpChartv05.ServletDriver?chart=qqq:qqq,uu[l,a]dalaynay[dc][pf].gif

 

Regards,

Vesselin

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Bontchev

 

The ABC potential does loom out there, but I have discounted it as unlikely, and my preferred posture is we already started Wave 3 down, and we are almost done with the first of that wave 3 structure (of 5 total waves)

 

If this was to be 3rd of a 3rd of a 3rd... then wave 1 should be fairly strong. One can argue that taking QQQ from 28.70 to 24.55 or so is a fairly good size wave 1... and to me, it looks like the count Im using.

 

Also, keep in mind, Im a simple guy... I use simple analysis and dont get too overly caught up in minute waves, or ABC's and the like. For some strange reason, my results are quite fine.

 

I believe I have made one bad trade in my last 10 using my SG analysis, and I quickly recovered that loss on the next trade. Any time I make a bad entry or exit, its usually because I dont follow my own SG analysis.

 

That said.... I got out on Friday night because I had a HUGE week one just two entry and exits.... and I use 200% leverage as well. This way I dont NEED TO hit the exact top or bottom of a channel move.

 

I expect downside to unfold before next week ends, interestingly enough, the Full Moon is Thursday.

 

Hint hint.... Dec 2 highs are unlikely to be violated... if they are, it wont matter as Im going to be in cash until I see the intermediate wave 2 top....

 

more on that as the week unfolds etc...

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SG,

 

Since wave two can't do 100% of wave one, if we are in three of three, we will not see new highs.

 

I still see us possibly being in wave 2 abc, as Dr. B points out, which will allow for a higher high but, i'm prepaired either way.

 

Good luck.

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Re Arch Crawford

 

Some of you dont know of him, but probably the most accurate market timer last few years, other than or along with Prechter and Co. Arch uses Astrology...

 

Anyhoo... I pay some attention to him for sure

 

Just listened to his 12-5 interview on marketview.tv today.

 

He basically echoed my comments today... a mild upmove towards year end, possibly into January... and then go short like a banshee... he plans to go short 200% on margin. Just funny, as that is pretty much EXACTLY what I said or plan...

 

SO... take that for what it may be worth. But Q1 should be quite ugly, making q3 o2 look pretty... IMO of course.

 

Thanks for tuning in.. fwiw... remember, Im just a simple guy, and I could be wrong...

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Here is the first analysis I was talking about:

 

NDX_121402_daily_520x402.gif

 

Source

 

(It's of the NDX and the chart is "still".)

 

And attached to my message is an analysis, according to which we've had our ABC correction in the summer of last year. :P (Don't you just love this Elliott Wave stuff?) According to it, we're indeed in wave (3) of 3, which should take the COMPX to around 500. (Source)

 

Regards,

Vesselin

post-2-1039988918_thumb.jpg

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Bontchev

 

COMPX to 500 eh? Now that would be news, but I dont see it.

 

I havent done my math past wave 3 of 3 yet... I'll take her one step at a time

 

Sticking with 1051-1065 max top on NDX next few weeks, with errors to downside on thos numbers.

 

Hitting 975 this week, probably turning up on the full moon for a few weeks MAX...

 

Dont think its Wave b of ABC.... but regardless... heading down next 3 1/2 months in total. I just like to be cute and play the retracements and my reading of the Ewaves.

 

One thing about E waves... tons of interpretations. This is where the whole Simple Guy SCHTICK I use started... I keep it simple.... and it works fairly well.

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those ewave guys who think Dec 2 was just wave 2A and we're in 2B now with one more 2C up may indeed have a point but it is a low probabilty count. They are not looking at other sentiment/technical gauges that SCREAM Dec 2 was the top and is not likely to be exceeded. If a 2C does develop (not likely) it will fall way short of Dec 2 high.

 

This market is too weak to form an upward A-B-C zig-zag. If its lucky at best an A-B-C contracting triangle but doubtful to me.

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Pile, et. al

 

Good points Pile, I agree btw...

 

That said, waves are always open to interpretations. My interpretation is we didnt finish minute wave 1 yet... others say we did, and we already had wave 2, and now we just started 3 of 3 of 3....

 

So... anyone could be right or wrong.

 

I think we can all agree the market heads lower next few months, but in terms of very ST time frames, which is what I trade in generally... its open to lots of interpretation.

 

I generally trade with my following rules

 

1. Dont game the tape daily

2. Be patient, let the charts, indices come to me

3. Take profits

4. Refer to #3

5. Trade at 200% leverage on a position, and generally go 100% into that position in a short window, dont dilly dally...either do it or dont.

6. If wrong, quickly cover and take a small loss... (hopefully)

7. Compound profits by trading large positions, with leverage, in short windows... using my trading rules and instincts....

 

Seems to work...heh heh.... but everyone must develop what works for them...

 

Thanks all for the postings... good stuff... we all learn from each other

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Final notes of the night

 

1. FX... I grew up in MPLS... go Vikes... they are coming around quietly. Beat the Pack, took ATL to overtime, Barely loss to the Pack last week, and this week took out N.O....

 

2. Im out for the night, gotta go decorate the tree and all.

 

See y'all tomorrow on this forum should it still be here, and if not, on IDS... feel free to keep posting, I will check it late tonight or tomorrow and get back on any questions if I can...

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SG. I wished I knew more about Elliott Wave. However, I do look at them. This guy appears to have a pretty good feel for them. I have been following his e-waves for awhile.

 

Note: His last note on the last page, under conclusions.... What could negate the short term pattern, Monday, tomorrow...... I dunno.

 

http://csf.colorado.edu/longwaves/2002/pdf00029.pdf

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