Erratic Range-bound Trade

By: Joseph Russo | Sat, Jun 30, 2007
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As the financial sphere and all of its participants scramble to position themselves on the proper side of the next big move, the "house" goes about doing what it does best. Particularly over shorter periods of erratic range-bound trade, "the house," (any consolidating broad-based index) becomes most intent upon confusing as many participants as possible. Amid such chaos, the marketplace (by design) will efficiently assimilate a fair portion of the majority's active trading capital in what is for most traders, a rather frustrating price-discovery process. Perhaps this chronic frustration is origin to a denial-based allusion that "the market is always right." We also ponder if such mechanics are a suitably alternate way in which to perceive the "efficient market hypothesis."

OVER TIME, THE HOUSE MUST ALWAYS WIN ? OR THERE IS NO HOUSE
Many have often compared Wall Street to one giant casino. There is fair evidence of truth in this, to which short-term traders will no doubt attest. At the other end of the spectrum, institutional money managers along with the most passive of individual participants are likely to embrace the long-term "investment" argument. So long as secular up-trends quickly resume and remain generally stable, the investment argument will always prove to be the brilliant no-brainer. However, upon the inevitability of a long-duration secular decline, such brilliance painstakingly returns to the lowest common "casino" denominator. Indifferent to all outcome preferences, on every level, in due course, across every time-frame, and with no exception - BULL or BEAR, "the house" must always prevail. Most players readily accept such realities upon venturing into a casino, and should likewise be cognizant of similar dynamics forever present throughout the financial sphere.

While Index Traders Edge Vol. 5, contemplated whispers of instability, this issue suggests more of the same - as the bulk of hyperactive participants will no doubt fail in their valiant short-term attempts to stay one-step ahead of a rather fast-paced and erratic "house-cleaning" consolidation. During such episodes, "standing aside" can prove to be a suitable and prudent tactic for various shorter-duration trading strategies. Only those "quickest on the draw," in possession of carefully calibrated price targets and precise trade-triggers, will profit amid the sharp, erratic, and abrupt reversals. In kind, traders who attempt to distance themselves from the intra-day malaise will require more patience, flexibility, and risk tolerance in prudently trading through such bi-polar consolidations.

For all such traders, there is no better road map or range-tracking medium than the stunningly accurate, impartial analysis, through which Elliott Wave Technology concisely documents, and archives its unique brand of trade-triggers and price targets. No matter the time-frame, and regardless of the prevailing market climate, we are steadfast in keeping subscribers in the profitable minority, and fully abreast of both fast-moving, and longer-term market dynamics.

That said - let us look at where the weekly charts are trading, and what might be on tap in the week ahead.








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Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the dot.com 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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TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/