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Member’s Video for Friday, February 9th, 2018
Markets crushed again today and we’re short in the Russell looking to add the other half. Is this the top? Looking like we’re at the top, but watching 2500 support.
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Hey Todd, what needs to be key to close short and play the rebound? Know Prechter sees today wave as an impulse iii of a larger A. What would invalidate his count?
Christian
Hey Christian – Yes, I’m seeing the same thing. I think we completed a 5-wave impulse up in A (or wave 1), and looking at wave 2/B decline tomorrow. I believe I covered that in tonight’s video (for Feb 13th). -TG-
Todd,
Supporting the bullish case, here’s the SPX wave 4 on a 5-min chart labeled as a (nearly) completed zig-zag. With a further large breakdown the labels change to the bearish 1, 2, 1 of 3. In either case, a bounce is due.
https://www.screencast.com/t/2kibuLIwKsh
Tom McClellan thinks stocks rally to a new high in March. See video here: https://www.mcoscillator.com/
Bill
Hi Bill – Careful as your blue C-wave looks to be much shorter than your blue A-wave, so possibly the move down to Friday’s low was wave 1-of-blue C?
Wave B/2 has not spent enough time. Not even 38.2% time elapsed. I am thinking that this is a false break to new low (we have not broken through 161.8% extension). Looking for a mind blowing rip higher (so a smaller abc), to complete 2. Then we get the awesome move down.
This might be a bit conservative, but I have scares to prove how vicious the rip higher can be. 🙂 So want to be sure before I go all out short.
Hey Upen – good thinking as today was straight up. I’m not in a big rush to sell this rally, as much as I want to! Good job showing patience.
Todd.
what will make you move the primary wave to the last high in spx?
Hi Robert – Right now the count that places us at Grand Supercycle Wave 3 top is the Blue Count on the S&P 500. Currently we’re rallying W. ‘green 2’ which is the minor degree. If W. ‘green 3′ down exceeds the 100% Fib projection of W.’green 1’ then I’ll move to this count as my preferred. Does that make sense?
Greetings,
Just curious on fib relations between the 24 hour chart of the sp500(overnights) and the sp500 futures hours chart. Which one do you prefer to trade off of? You can see two different fib projections and chart patterns using different of those. How do you choose?
I guess i should have watched the video to the end, Nathan Nabee had the same question and thoughts.
No worries, Nathan. There are definitely arguments to be made for both, but I’ve always grown up as a trader tracking the SPX market rather than the futures.
Revised SPX count with alt, including today. Looks basically the same as yesterday with C extended plus the bounce, but nothing conclusive. What’s it going to take to invalidate the bear case?
https://www.screencast.com/t/4twr71uz
It’s possible, Bill! If we exceed the 78.6% retracement of the drop from the top – Jan 26th – at 2795 then the bear case becomes unlikely.
Hi, I have a question about trade management. As a trial member I do not seem to have access to the training courses so if there is a course in there with regards to this you can just direct me to that one and I will watch it once I become a full member. However, when you enter into say a vertical put spread, like I did on the 7th when the SPY was at 268 I bought the 260 puts and sold the 258 puts with expiration on the 23rd of feb. I got them at a debit of .30.
My risk was then 30 USD per spread and my max profit 170 per spread. Yesterday when I saw the complete five waves down I decided to take my profit at 1.30 for the spreads in case of a bounce. This obviously changes my risk reward ratios over the long term since I risked 30 to make 100 instead of risk 30 to make 170. So, my question to you is how do you usually manage your trades, do you look at them more mechanically where you would have keept that spread closer to expiration in order to get more of the last 70 out of it because of your long term risk reward ratio or would you trade around it like I did and look to re-establish the spread at say 0.6 – 0.7 within this bounce?
Hi Stefan,
I think I’ll address this question in depth at the Tuesday webinar tomorrow, but basically reward does not factor into your thought process at the time you enter a position. The only two variables you have partial control over are entry and stop loss. Using the wave principle you can identify a good entry price and where the trade will become invalid, which is where you stop loss will go. Beyond the next 1 or 2 expected market turns, you have very little edge or ability to forecast what will happen so don’t try to predict it and calculate the reward. Even worse, refusal to trade the underlying market with Elliott and “tape reading” is trying to impose your will on the market and that’s just not a good idea. Can you imagine if I didn’t book profits on our short IWM trade when it was the lows because we weren’t yet at max reward?
Basically, the only two things you have control over are entry and stop. With those 2 paces of information you can calculate an appropriate position size according to your risk profile. From there, your job is to trade the underlying market using Elliott and tape reading as you did – good job! The market doesn’t care at all where you entered so it’s foolish to not exit a trade b/c you haven’t hit your 1-to-2 risk-to-reward ratio.
Lastly, you risked 30 USD and made 130 USD. Job well done!
It looks almost for certain that we are in a major 4th wave in the nasdaq. Looking at the apple and atvi charts, you can see wave equality in waves 1 and 5 and an extended wave 3 as part of a major wave 3. So wave 3 appears to be done. If the abc pattern is in effect, look for major gaps to be filled with the c wave, For apple,there are gaps at the 120 and 100 dollar levels, baba 125, amzn 975. I’d definitely go long, if these stocks ever go that low.
Got it, thanks Madhan.
Hello Todd,
The text message I got Friday morning at 10:53 AM PST was to add to the IWM position and I didn’t get the text to sell half the position until 4:17 PM PST. Should I unwind half the position upon the market open on Monday?
Thanks,
Wow – a 6 hour delay? That’s unbelievable. We have hundreds of subscribers who received the text on time. I would call your network provider, restart your phone, take it back to the store, but get some answers. A 6 hour delay for a text message is unheard of. Keep me posted.
Todd.