Trading Strategy: Nasdaq-100 (Medium-Term)

By: Joseph Russo | Thu, Jan 20, 2011
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Elliott Wave Technology Brief: Then, Now, & Next

In holding our strategic trading systems' long-term performance histories to task, this brief supplies two charts. The first reviews how our proprietary trading systems had been engaged in the recent past (THEN), and the second chart illustrates the efficiency of these trading strategies along with how they are positioned (NOW), and how they may respond to market conditions in the future (NEXT).

In sum, the strategic position charts shared summarize how our medium-term Level-III strategy is performing in the title market and how it is currently positioned relative to its primary directive of profitably trading Elliott's Minor Degree's of trend:

Without further ado, we present past and current Level-III positions taken in the...

...NASDAQ-100 Daily Bar Chart: THEN (2-19-2010 - 9/8/2010)
NDX Futures Chart

Previous Engagement | Medium-Term:

THEN (2-19-2010 - 9/8/2010):

As equity markets finally began moving lower in May of 2010 following extraordinary gains achieved from the 2009 bear market low to the peaks reached in April, our Level-III trading strategy, which is algorithmically coded to capture Elliott waves at the Minor Degree of Trend, turned defensive.

Uncertain as to whether the peak in April was a 3rd or 5th wave terminal at Minor Degree, our systems alerted us to move short ahead of the Flash Crash, which occurred on May 6, 2010.

Each of the star-points (*) noted on the above chart represent potential pivot terminals that could have represented Minor Degree turning points. As such, our medium-term Level-III trading strategy responded accordingly at each of those plausible terminals and sub-terminals.

Although somewhat disappointing in its non-levered net gain of only 2.12% for the eight months spanning February - September of 2010, the result of following a disciplined rules-based strategic approach to engaging the market was prudent and credibly effective.

In the timeframe above, Level-III held the volatile and whipsawing market to task in executing a total of six trades in attempt to fulfill its primary directive.

The net result was four losing trades and three winners, the last of which remains an open position.

...NASDAQ-100 Daily Bar Chart: NOW & NEXT (1/20/2011)
NDX Futures

Outcome & Current Engagement | Medium-Term:


As of mid-session on January 20, 2001, the exemplary Level-III long positions established on September 8, 2010 have amassed (Non-Levered) open profits of nearly 23% in four months time. Obviously, those using levered ETF's or futures contracts have amassed far greater returns.


Despite prospects for an imminent Minor Degree crest near at hand, Level-III shall remain positioned to the long side of the market until such time as our embedded trading criteria alerts us to take profits, and shift positions to a bearish posture.

The five-month bullish stampede from September 2010 through January 2011 has yielded highly respectable gains, and provides us with additional confidence that Level-III is indeed meeting its primary directive of capturing the lion's share of Elliott waves at the Minor Degree of trend.

Going forward, we are fully prepared to endure future periods of uncertainty and whipsaw similar to the six months from April of 2010 through September of 2010. That is just one of the many ancillary benefits of employing strategic trading tactics vs. the best guess/gut feel discretionary approach used by the vast majority of participants.

This brief exemplifies information shared weekly within our NTO-Systems Trader publication.

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Until next time,
Trade Better/Invest Smarter



Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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