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May 16, 2008

Market Update: Proprietary Trend Indicators Quiet the Noise
by Dominick

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The rally off the March lows has been exactly the sort of choppy action that drives Elliotticians crazy - there are so many potential counts and yet it's difficult to even determine whether the move is impulsive or corrective. Though TTC began as a place to practice Elliott wave theory, our approach at times like these is to put off counting the big picture altogether and rely on our numerous other resources.

Among our assets are proprietary trend cycle charts like the one above, showing the SPX daily. As you can see, the chart consists of a standard bar chart with a color coded trend oscillator. Going into the March low, the oscillator had just reached the bottom of its range. It then pivoted off that bottom and has been steadily moving higher ever since. With this chart alone, some TTC members forgo our real time chat room, where the majority of our membership engages in intraday and other short term trades, and, with these slow moving indicators, filter out the noise and plan profitable swings.

The trend cycle charts are available in several timeframes and are used together to formulate thorough interpretations of price action. So, during the periods in April and early May when it appeared the daily chart above was going to begin a rotation back toward the bottom, members looked to the 60-min chart oscillator, which would have had to stay pegged to the bottom of its range to get the daily chart to make a significant reversal. When it didn't, swing traders knew their long positions would still work.

In similar fashion, charts in other shorter timeframes provide guidance for the 60-min chart and the daily offers insight into the weekly chart, shown below just starting its long march higher.

TTC's proprietary trend cycle charts are also available in other markets, including the DAX, euro, oil and gold, shown below. Notice how perfectly the weekly chart captured all of the move up from last Fall, a swing trade worth almost $400/oz. Now that the debate continues whether the correction in gold is over, the daily trend chart has members ready to come in off the sidelines as the weekly prepares to complete its full cycle. Members will be watching for the 60-min chart to peg at the top of its range, and confirmation on the daily, as price reacts to an area Elliott wave suggests will be a near term low in gold.

TTC was founded to salvage the name and practice of unbiased Elliott Wave theory, which has fallen from favor in the minds of so many traders because the vast majority of its adherents only present counts that validate their preconceived notions about where the market should go. But the secret to consistently profitable trading is to listen to the market and let it tell you where it's going, with or without you. Our proprietary trend cycle charts help us do just that, even in the most challenging of wave-counting situations. These charts, in numerous markets and timeframes, are always available in our forum, but to see what they're saying right now, you'll have to join.

If you want to be a TTC member and trade the unbiased way, there's still time before our May 31st cutoff date when we will close the door to new retail membership. Since our inception in January 2006, our ranks have grown exponentially and, in the interest of maintaining a manageable group of dedicated traders, we will not be accepting new members after May 31st. The only exception will be institutional traders, who've already become a big part of our team, and on whom we'd like to focus our effort. All members before the cutoff can remain indefinitely, so join now and be grandfathered in at the current rates.

Have a profitable and safe week trading, and remember:
"Unbiased Elliott Wave works!"

Dominick,
a.k.a. Spwaver
TradingTheCharts.com

This update is provided as general information and is not an investment recommendation. TTC accepts no liability whatsoever for any losses resulting from action taken based on the contents of its charts, commentaries, or price data. Securities and commodities markets involve inherent risk and not all positions are suitable for each individual. Check with your licensed financial advisor or broker prior to taking any action.

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