Market Update: Diary of an Unbiased Trader
Another week, another high: that seems to be the theme of late. Earlier in the month, 20th Century Fox announced it's going to produce a sequel to Wall Street with Michael Douglas reprising his Oscar-winning performance as the champion of greed, Gordon Gecko. Use this link to read my article Market Top III: Return of the Gecko. Another week, another high was the theme back then, too, back in 1987. One day... one day the story's going to change and I'll shift my strategy to selling rallies and buying right before a short squeeze. But not until I'm satisfied with calling an end to this rally.
Then again, on second thought, we do that every day anyway. As traders, we don't get caught up in a weekly "count" and insist the market has to do this or that. As traders, we trade ... 20, 30 or even 50 times the point range in any given week. But don't think that means you have to be a scalper to join us - it took 150 points to reach the target we called at the 1364 low in March, and our members don't seem to mind!
Once our 1510 target was reached, I waited to see a reversal off the high before calling the top. In last week's update I said:
The other ingredient needed at a turn is the correct sentiment, and believe me, realtime sentiment is working even though traditional readings aren't. I continue to try and wait for the traditional ones to line up, and until at least some do, this market could have more to go.
And it did have more to go! But, as the S&P once again put in another intraday high, we also got the traditional sentiment readings to show us the first sign of excessive bullishness. Seeing that, at the same time, the S&P futures entered our expected area for a reversal, the trade against this week's high pretty much set itself up for us.
How did we trade it last week?
Last week was full of points to grab. The chart above shows the QQQQ pattern and target we had coming into the week, giving us good reason to expect a move up on Monday's opening, labeled 1 on the chart below. I was looking to see 47.36 reached before taking a look at any reversal. This week's high was a penny above the target at 47.37!
That afternoon I called a "cowboy", or extremely aggressive, short at the position labeled 2, which proved to be a tick or two from Mondays high. Near the close of trading Tuesday, position 3, the following statement was posted in the forum:
I think we should lean to this afternoon's drop being a C wave of a flat correction that sees yet again another high. If that is not what's happening, we will know quickly in the morning and get on the short side.
Though we would have happily gone short if wrong, the C of a flat idea proved correct, and going long Tuesday's close was a profitable decision. Looking for the next trade, I posted the following message at position 4:
"I would love to see a reversal from there. Above that is bullish
I'm watching any hesitation in the 1534/1537.50 area."
The high was 1535.75, and on confirmation of a reversal, members were able to profitably trade the short end. At position 5, I told members to expect a bounce or slowdown around 1525/26, just a point or two from the bottom of that move.
At position 6, I posted what turned out to be the chart of the week. It was saying I had a complete 5 wave count down into the globex low and that the opening gap lower on Thursday was another bear trap. It was saying that a tradable rally was setup for the morning.
But, more importantly, it has us short the bounce that so many bought leading up to the 10:00 report that started the selling. Once we ruled out a possible 1519 bounce, we knew we had confirmation for lower numbers. The following two charts were posted at position 7, right before the drop.
At the end of Thursday, position 8, I was again talking about buying a reversal at the close in the chatroom in realtime as we were finishing an ending diagonal. That pattern suggested the area labeled 9 would be short tem resistance, and it was. By the time the market reached position 10, it was getting late in an overall profitable week, and so the strategy in chat became "TMAR", take the money and run!
If you're not a member of TTC you must be thinking, "Yeah, right." I'd probably think the same thing if I didn't see it done myself. But, this is really what TTC puts together when the market trends - this is what unbiased Elliott wave analysis, proprietary targets, proprietary trend charts and the 18 hour days I put in can get you. The market doesn't always give out nice ranges, but this week wasn't a one-time deal either.
Want to see it done? I'll run the money back special again since the results are amazing. Join by June 1st and if, after a solid week of using the site, you don't like what you see, simply email me and request a full $50 refund, no questions asked. But our monthly fee is going up on or about July 1st, so this opportunity will not last.
Going forward, I don't think the violent moves we saw this year are about to calm down now that the struggle to put in a top is about to begin. As you can tell from this week's update, our trading is not based on a signal count, but rather changes to suit what the market gives us each and every trading day. I'd rather see more of a pullback soon, but, after seeing what's been going on in this major index, it's questionable, or maybe this market is doing something different altogether.
I feel that I know an area the market should "recognize", both in the very short term and somewhere around the beginning of the summer. Call it, Return of the Gecko. But, once there, the market will need to confirm that it recognizes the target, and reverse from it. Otherwise, just like the elevator idea from last week, I won't be going up 50 floors to get to my car in the basement garage.
More and more, I'm in the camp that says we need to keep an open mind to the possibility of an additional high in the near future. If so, you haven't seen the fireworks yet! A move from our targeted areas will rocket up like the Macy's 4th of July show. Come to think of it, that might also be nice time for a turn just about there. It's also where we plan on instituting the price increase we've been mentioning.
So, if you haven't made some handsome profits this year, it's time to really think about what you're doing wrong. If you've watched from the sidelines as the markets screamed higher or if shorted a rally from the 2002 lows only to watch the S&P recover all but 20 points of the initial decline - it's time to try something new! If this is you, it's about time to understand why you trade a certain side of the market and learn how to find the real money. Join now, become part of TTC, and begin to "earn and learn". Now is a perfect time to join because the fee will be increased before the summer (read below for more details).
If you are a registered member and need your username info, email me at Dominick@tradingthecharts.com
The Dax continued to power up to a spot that our members where aware off because of the posting of this chart. Join and trade along with many fine Dax traders as they are about to find out if the old high or the fork winds
This chart back from April gave you a fifty-point rally in gold and nailed the reversal! After Thursday's selling, gold and silver closed below their trendlines. Skepticism is growing about the metals - read Joe's Precious Points update for what's next.
*To Current and Prospective Members:
TTC will be increasing it monthly subscription fee sometime before this summer. The increase has become inevitable due to our ongoing expansion of the Website, computer and software upgrades, and the addition of services such as trend cycle charts. Current members and anyone that joins before the increase takes effect will not be subject to the new price, and will continue paying the current $50 subscription fee on a month-to-month basis. So, if you have been thinking of joining, this is a great time.
Thank you for your attention to these changes. If there are any questions, please direct your email to firstname.lastname@example.org.
Have a profitable and safe week trading, and remember:
"Unbiased Elliott Wave works!"
For real-time analysis, become a member for only $50
If you've enjoyed this article, signup for Market Updates, our monthly newsletter, and, for more immediate analysis and market reaction, view my work and the charts exchanged between our seasoned traders in TradingtheCharts forum.
Continued success has inspired expansion of the "open access to non subscribers" forums, and our Market Advisory members and I have agreed to post our work in these forums periodically. Explore services from Wall Street's best, including Jim Curry, Tim Ords, Glen Neely, Richard Rhodes, Andre Gratian, Bob Carver, Eric Hadik, Chartsedge, Elliott today, Stock Barometer, Harry Boxer, Mike Paulenoff and others. Try them all, subscribe to the ones that suit your style, and accelerate your trading profits! These forums are on the top of the homepage at Trading the Charts.
Market analysts are always welcome to contribute to the Forum or newsletter. Email me @ Dominick@tradingthecharts.com if you have any interest.