Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Stock Market Update: Trader's Best Friend

Stock-Markets / Elliott Wave Theory Sep 16, 2007 - 01:06 AM GMT

By: Dominick

Stock-Markets If last week kicked off the top of the ninth, then you could say we definitely saw some base hits and some runners advancing this week. You may have noticed we basically got a mirror image of the previous five days, finding a bottom on Monday and closing Friday near the highs. But, unless you're already a member of TTC , you probably didn't buy that Monday low. If you were like many, chances are you figured the bottom had dropped out after that employment number, that it was another 1987, or maybe we were about to get hit with another 9/11.

Last week I cautioned against using the anniversary as anything other than a chance to remember and honor the lives lost that day. That's exactly what we did – and then we traded the charts like we would on any other day because you can watch all the CNBC you want, or listen to all the bulls and bears in the world, but an unbiased chart, with the right numbers or count, is still a trader's best friend in the whole wide world!

Remember the last update included a composite of five charts we had used to navigate from the high on Sept. 4 to last Friday's lows. Having gotten the end of day weakness anticipated in the third chart, it wasn't difficult to foresee a move to the downside on Monday. But a bottom?

Well, yes – and, frankly, it was easy provided your weren't trading on the news or the chatter or some preconceived bias. Remember, unbiased means you can trade to the downside without giving in to some end-of-the-world crash scenario. Keeping the possibility of a bullish week in mind, and with no bearish count looking remotely plausible at that point, the following DOW chart was posted before the opening on Monday with our downside target.

The gap up gave us the needed fourth wave, but that quickly evaporated under the pressure of all that crisis talk and, before noon, we were already in the target box. The timing of the decline into this particular low actually made it easier to trade than most because there wasn't the risk of buying into the close and facing an overnight move. In other words, it was fairly easy and low risk to put on some longs with a firm stop and watch for the index to move up out of the box by the end of the day. Sure enough, the move was choppy, indicating a real struggle, but the market clearly had its sites set higher. By 1:30, the chart looked like this:

As the chart says, this is clearly a bullish setup and swing traders who got into the long trade could have just sat on their position for the whole week. Of course, as usual, we found some nooks and crannies for the scalpers anyway and these had to do with those now famous numbers we mentioned last week. The last update mentioned 1467 in the S&P futures and once again you only need to look at a chart to see how the market continued responding to this critical level.

In fact, for at least a month now we've been keying off of this number, among others, reacting to the choppy, rangebound market, rather than trying to force our expectations or read into the economic data like so many tea leaves. In turbulent times, our numbers are reliably unbiased and whether the indices vibrate around them, find support or hit resistance, they provide excellent trade setups week after week. Of course, every trade has to have entry and exit points and we usually reserve at least one of these for members only. But, as you can see in the chart below, as the S&P moved off the lows up to 67 and then retraced back down, we zoomed in to a 5-minute chart and found another long entry point for the quick and the brave.

The safest exit point for this trade was to simply sell the return to 67 as the market vibrated there for a few hours. But, for traders with a little more risk tolerance, we posted a 72/76 target. The chart below shows this target box captured the top of the move quite nicely.

Of course, getting out of a long trade doesn't automatically mean it's time to short, but you better believe we saw an opportunity when the market quickly sagged back down to and held 1467!

And, as you probably know, the markets moved higher from there and haven't looked back, at least not to 67, since! We had a sreong pattern idea going into Thursday, which gave us an upside target that happened to coincide perfectly with one of our numbers (1491) and also happened to be the exact top for the week. That did seem to be an excellent area to switch and get short, and we were vindicated by the gap down on Friday, back into our previous 72/76 target box, which resulted in 15 points profit.

The gap down open on Friday also gave us an opportunity to do a few other things we do really well at TTC. The first was to practice what I call “rolling analysis”, meaning that we trade the chart that works in any given moment but are always ready to abandon a count or pattern, or target or chart, if the market proves us wrong. In this case, I suggested we abandon the triangle pattern and TMAR (“take the money and run”), which is another thing we do well, and the reasons are simple. Not only had the gap down taken us back to our previous target level, but the move also exposed us to a potential impulsive upward move. Booking 15 points and reassessing the situation is always good in my book. But I guess the fact that the market quickly reversed and closed positive for the day, totally validating the call, wasn't so bad either.

Usually I close these updates with some outlook for the future. Today will be a little different because I don't honestly think it matters what I think at this juncture. After getting out of the short Friday morning, it didn't seem to make sense guessing about where the market would wander the rest of the day, not with the Fed, the brokers, and option expiry all looming next week.

So, I didn't take a position then and I'm not going to bias my readers now with so much news about to jump on the tape. I will say, though, that I'm fairly proud to have had the discipline not to have commented on whether the July highs were the “top” because that left me and my members unbiased and free to trade this range bound market in both directions for the last two months. I mean, if you were convinced that July was the top for sure, could you have bought Dow 13000 on Monday or SPX 1375? We did and also traded hundreds of S&P points as the markets remain in a range.

As we go into next week and what looks to be a Fed rate cut, the fact that we're only 70 points from the all-time high in the S&P can only be bullish – I mean, that distance could feasibly be covered in a day or two, let alone a week. Still, we can't allow ourselves to put blinders on now because, as I mentioned last weekend, we are approaching what could be major reversals, not just in the Dow and S&P, but in a wide range of markets including currencies, oil, gold, and commodities. So, I'll end, then, with the latest update on my gold chart below, a reminder to read Joe's article for more on the metals, and the promise that we'll be all over the markets whichever way they break over the next few days and weeks, not by watching the news or interpreting the economic data, but by trading the charts because they are, after all, a trader's best friend.

Finally, be sure to check out our weekly “road maps ” as that's where the real big picture shapes up, where we compile charts of any market that talks to us, ranging from a look at the last few weeks to huge timeframes all the way back to the 1900's. Remember the chart below of the Dow Jones transports where we found the exact top.



Gold continues to follow our precise path for the last 2 weeks. The chart on the left was posted to members before any breakout and the chart on the right shows the advance from that breakout.

“Unbiased Elliott Wave works!”

By Dominick

For real-time analysis, become a member for only $89

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 @ if you have any interest.

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.

Dominick Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules