Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Coronavirus is America's "Pearl Harbour" Moment, There Will be a Reckoning With China - 6th Apr 20
Coronavirus Crisis Exposes Consequences of Fed Policy: Americans Have No Savings - 6th Apr 20
The Stock Market Is Not a Magic Money Machine - 6th Apr 20
Gold Stocks Crash, V-Bounce! - 6th Apr 20
How Can Writing Business Essay Help You In Business Analytics Skills - 6th Apr 20
PAYPAL WARNING - Your Stimulus Funds Are at Risk of Being Frozen for 6 Months! - 5th Apr 20
Stocks Hanging By the Fingernails? - 5th Apr 20
US Federal Budget Deficits: To $30 Trillion and Beyond - 5th Apr 20
The Lucrative Profitability Of A Move To Negative Interest Rates - Pandemic Edition - 5th Apr 20
Visa Denials: How to avoid it and what to do if your Visa is denied? - 5th Apr 20 - Uday Tank
WARNING PAYPAL Making a Grab for US $1200 Stimulus Payments - 4th Apr 20
US COVID-19 Death Toll Higher Than China’s Now. Will Gold Rally? - 4th Apr 20
Concerned That Asia Could Blow A Hole In Future Economic Recovery - 4th Apr 20
Bracing for Europe’s Coronavirus Contractionand Debt Crisis - 4th Apr 20
Stocks: When Grass Looks Greener on the Other Side of the ... Pond - 3rd Apr 20
How the C-Factor Could Decimate 2020 Global Gold and Silver Production - 3rd Apr 20
US Between Scylla and Charybdis Covid-19 - 3rd Apr 20
Covid19 What's Your Risk of Death Analysis by Age, Gender, Comorbidities and BMI - 3rd Apr 20
US Coronavirus Infections & Deaths Trend Trajectory - How Bad Will it Get? - 2nd Apr 20
Silver Looks Bearish Short to Medium Term - 2nd Apr 20
Mickey Fulp: 'Never Let a Good Crisis Go to Waste' - 2nd Apr 20
Stock Market Selloff Structure Explained – Fibonacci On Deck - 2nd Apr 20
COVID-19 FINANCIAL LOCKDOWN: Can PAYPAL Be Trusted to Handle US $1200 Stimulus Payments? - 2nd Apr 20
Day in the Life of Coronavirus LOCKDOWN - Sheffield, UK - 2nd Apr 20
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Turning Andrews Pitchforks into Predictable MAP Cycle Forks, MAP Analysis Part 6

Stock-Markets / Stock Markets 2012 May 16, 2012 - 06:07 AM GMT

By: Marc_Horn

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleApology – after re-reading it comes across as all analysis is rubbish except for mine. There is good analysis and bad analysis but I am trying to point out there is a difference between systematic and random. Using systematic analysis you can constantly revise and improve your analysis, where as if you are not systematic and object and draw random lines here and there to substantiate your feeling – that depends on which way the wind blows.


Any analyst that can demonstrate that through a systematical approach rather than random waffle and changing trend lines as the picture develops analysis, I will give permission to use any and all my IP and Copyrighted materials free of charge. 

The concept is to reduce vulnerability by customers that are ignorant (NOT STUPID) in a highly specialized field that they entrust their future dreams on.

Those with the knowledge and position have a social duty of care if we want society to improve for all, rather than those in control of power! 

In MAP Waves Part 1 and Part 2 I demonstrated a systematic approach to wave counting as a high probability method on multiple pivot scales using the foundation stone of all Elliot Wave theory – the motive wave. This overcomes the short comings in the industry of the current practice of the use of endless corrections possibilities that leave a 50% chance of prices going up or down.

In MAP Analysis Part 3 I discussed very basic wave theory where it was viewed in the context of predictable cyclical human behavior. I have also correlated much common technical analysis pattern terminology in relation to Elliot’s motive wave so that from quick pattern association we can increase our probabilities of determining where prices are heading.

In MAP Analysis Part 4 I provided an example of the basic trading lines that, if applied to the correct pivots, provide a probabilistic wave trading model, as opposed to random trend line analysis which is so commonly practiced in the industry currently.

In MAP Analysis Part 5 I reinforced my belief that the driver of the cycle is predictable human behavior, of which the primary levers are ignorance, greed and fear, and through understanding our natural reactions we can break our cycle of predictability and stop being profited on by others, and we can profit from peoples predictable behavior. Andrews and Babston amongst others used Newton’s Action and Reaction theory as explanation of price movement.

In this part I want to present how Alan Andrews simple pitchfork can be used in conjunction with Elliot’s motive wave to provide a highly predictive as well as probabilistic trading model with a wealth of information which far exceeds the best technical indicators and you can see why understanding you trading scale is critical to your success! What does long term, medium term, or short term mean? Are prices going to go up then down in your term? Can you live with that variation and not panic?

More importantly I hope to highlight that using a methodology that is over 100 years old demonstrates that governments STILL are not able to control the economy under any economic model practiced! I use the word practiced because the simple Keynesian Model they have been claiming to follow has NOT been followed. It says put aside in the good times to stimulate in the bad. Because of people’s predictable behavior “vote for me if I don’t give you a tax cut”, or “vote for me and I will give you a tax cut”! Who would you vote for?

To reduce my risk of being one of the 3P’s I have said I only trade indices. That way I overcome becoming a victim of share pumping, dumping or any other third party marketing schemes as well as false and misleading advertising.

That way I also reduce the risks associated with the insider information and regulation as amply demonstrated by the JPM results and its subsequent 7% drop on the news!

So I will use the SPX to demonstrate how using probabilistic pivot combinations as derived in the complete MAP series analysis presented (and outlined in The Euro as an example of my Techniques) so far on different time scales you can fulfill your duty of social responsibility to reduce your risk of being taken for the 3P’s and vote with your money to get peaceful change!        

SPX monthly 1.JPG

Andrews claimed that 80% of the time prices reverted to the ML. I use the forks on the same pivot scale to see what to expect on that pivots scale, so in this case monthly (orange) pivots 1,2 and 3 (The pivot numbering is in accordance with Elliot’s foundation stone – the motive wave). So we start with a failure?? Or do we? Those that have understood the basic cycle theory presented based on the 3P’s. know that there is interaction between waves when they meet at a point time. So the basic fork actually is giving us the ML of interacting waves. I am sure Alan Andrews was fully aware of this, and dealt with it in terms of action and reaction (as opposed to my human behavior cycle) and he devised rules to adjust the forks such as the modified Schiff fork, warning lines and sliding parallels to name but a few! I am sure given our technology, and much like Elliot would have come to the same conclusions that I am suggesting! His original course is available free on the internet. Just do a search for Alan H Andrews – there is a gold mine of free information!

If we draw in the sliding parallel (SP) and warning line (WL) 1 we get the following which reinforces what I said in above highlighting the importance of using pivots methodically if you want to derive information from them – you need a system whereby you can apply probabilities rather than just drawing random lines!

SPX monthly 2.JPG

Once the next same pivot scale pivot is made, we then draw in the new fork as shown below joining the last 3 pivots. This gives us the ideal wave target where the ML (median line) and the MLL (Median line lower parallel) intersect as highlighted with the orange circle, which is clearly not possible so we have the ideal wave target as shown near the SP and WL1 intersection with the 345 (fork pivot definition points) ML. You will also notice that I have used a gold fork for the 345 fork – because under EW motive waves I have high probability end top on this scale as the monthly pivot -1 is lower than pivot 4.

SPX monthly 3.JPG

The 345 fork is in the direction of the expected new trend which is down. The 345 fork has a very high probability of pivot 1 making it to the ML, which indeed as Andrews stated is 80%, As we will see later when we go into smaller pivot scales this is a fantastic pivot combination fork!

It gives us our new normal trend direction on the new trend channel of the normal wave expected trading range. 3P’s Panic control.

Price movement can be easily seen – the rapid drop to the 2009 low towards the ML, and the subsequent slower rise since to the MLU (Median Line Upper parallel) Also what is obvious is how much steeper weekly ( red pivot scale ) wave 3 is! All predictable under the 3P’s - Panic behavior. So we have a clear momentum indicator and the only one I have come across that is forward looking!

As prices reach the Median line or parallels we have a clear indication of price extremes – overbought and over sold conditions of which there are numerous indicators but none of which give you the information so clearly with definable probabilities and again projecting forward!

What also is very obvious if that just with what we have done so far well chosen trendlines – become useful support and resistance lines – the 234ML was a resistance line to the 2007 top. Its MLL was is a resistance line to the current weekly pivot 3 (which is near the intersection of the last W( Pivot scale – Monthly, Weekly, Daily, 4Hourly, Hourly) 345 fork, and as one scale down Daily pivot 3 has not made it past there is an extremely high probability that prices will not rise above this resistance line for many years to come – unless we change our behavior and break out of the 3P’s.

What is also clear is the head and shoulders pattern on the monthly pivot scale, and the bear flag (0-4 bear break line) which is derived by joining pivot 0 and 4 – This line is the most reliable trend change indicator on every pivot scale with the exception of wave failures (less than 20%). So for all the bears on a monthly pivot scale the technical are bullish with the exception of Elliot’s motive wave which has filled its criteria of a monthly pivot scale top as detailed below.

SPX monthly 4.JPG

Now that we have the big picture we are going to move down a pivot scale to Weekly pivots for a clearer understanding of waves within waves and further pivot combinations that give us highly predictable potential pivot locations to show how critical pivot selection is if you want to derive tradable information so as in part 4 where I demonstrated how to apply basic trendlines be used with EW analysis I will use the same methodology but using simple forks, and will be looking from the 2009 low. We will be doing it on a daily pivot scale chart (you need to work in multiple pivot scales to find the appropriate correlations), I would not expect weekly correlations using quarterly bars, etc. Those shown in the table in Part 2 are the combinations I use.

Below I have shown the ideal expected pivot location, together with wave validation criteria, and the 0-4 break line (pivots 0 and -4 in a bear market for a bull break line). This needs to be done as part of your risk management on whatever pivot scale you are trading.

SPX Daily 1.JPG

By now applying cycle forks we can start to see waves within waves, in this case weekly pivot scale (red) within the monthly pivots scale forks (gold and orange). Retrospectively we can see D1/W1 and D2/W1 (daily pivots 1 and 2 of weekly pivot 1) being made at the W345ML, and D3/W1 and D4/W1 being made on the W345MLU. Also obvious is the presence of subwaves in weekly waves 1, 2, 3, 4 and 5 and that wave 2 is simple compared to wave 4 resulting in an expanding pivot formation. Also what is clear is the support and resistance offered by the forks, and the concentration of pivots around the ideal wave target – or volatility! The same occurs on smaller time scales.

SPX Daily 3.JPG

Now understanding that when waves interact at a point in time the resultant wave pivot can be anywhere between 0 and .2 times its frequency we use WL1 and WL4 to define our expected cycle trading range, and now we have defined our trading limits should we be trading on a weekly pivot scale!

Retrospectively we can see that the MML (Monthly Median Line) has been made which Andrews said has a 80% probability – but be warned only if you know which pivots to use!!

Also we can see we would have had no need to panic as this wave off the 09 bottom has shown no unexpected price action within our probabilistically defined trading parameters trading weekly pivots 3P’s,

SPX Daily 4.JPG

However just look at all those ups and downs we could have traded! So moving down to the daily pivot scale (purple) apply the same principles of multi pivot scale analysis. Once W1 is confirmed we draw W451. We also draw D345 to give us our new trading parameters – but on a daily pivot scalel. This greatly reduces our expected trading range as shown for W2 with its ideal and zoomed in parameters! (we will go through smaller pivots and more combinations and techniques as we look in more detail from last Octobers lows – you can then apply the methodology to whatever pivot scale you want). Basic wave theory tells us waves go from one extreme to the other so Had Andrews had out technology I would safely say he would have upped the probabilities to over 80%! Also shown is the SP of W345MLL – between our daily trend channel.

So prices will be moving to the latest ML as shown below, and we have clearly defined trading parameters to control our 3P’s. Also note we are now in our third wave level Monthly, Weekly and Daily! Waves within waves!!!

Also note the value of old support and resistance lines – Look at last Octobers lows! Good trend lines DO NOT come from random pivot selection!

SPX Daily 5.JPG

This is a bit messy! What other information do we have? Our EW parallel which further reduces out trading parameters as shown below and greatly tidies our picture!

SPX Daily 6.JPG

Once pivot 2 is confirmed we draw fork W012, update our D345, put in our EW and cycle fork parallels and SP’s. I know this looks messy and that is why I use colour coding! What is most important though is that you can see we have two trend forks – the W012 and new D345. Waves within waves! So we have highly probabilistic trading parameter so we can control our 3P’s and have managed risk and emotions!

SPX Daily 7.JPG

You will also notice a big ideal target area – we have a confluence of multi pivot scale support and resistance lines so highly probable to expect increased volatility as prices approach this area! Also you will notice pivot 2 was made below the D345MLL. This means it is highly probable to expect additional sub waves!  Using the same methods explained so far on the next pivot scale down 4H, you would have been within 4H trading parameters despite it falling outside of the current D345 daily trend! Also you will if you look back at the previous chart note that D1 and D2 are made around the previous ML!  Once D1 and D2 are in that allows us to draw D012. By drawing the EW cycle fork from D0 to D1 and sliding it to D2 gives us 2 ideal targets for pivot 3, with the intersection of D345 and D012 from which we draw 2 horizontal lines between where pivot 3 is expected as shown below. Again this is confusing so I will tidy it up in the following drawing. You will notice that this also is the intersection of D012 MLU and ML with D345MLU!

SPX Daily 8.JPG

Simplified! By now you will have notice I actually use target lines, the reason is simple – waves move in 2 dimensions and I am working off the last unknown reaction points! I could draw a second target box for the alternative parameters but they are only required if there is a not a clear wave count.

 SPX Daily 9.JPG

Do the same procedure on the 4H pivot scale and you will find the D3 falls within the specified limit defined. Once D3 is in draw your D123 fork and your wave 2 EW parallel. In addition add in you EW D13 parallel and move that to D2 and tidy it up to give the following target area for D4, and pivot falls within 1 day of its ideal intersection of D345ML and D123ML, but Also on the D0123SP MLH to D3, as well as the EW Parallel!

SPX Daily 10.JPG

The normal wave ideal target for pivot 5 is the 345ML and 123MLU SPML to 3. Draw you EW parallels and look where the 4H123 MLU pivot 5 target line – its MLU – all within clearly defined trading parameters!

 SPX Daily 11.JPG

So was the subsequent price action unexpected or was it predictable based upon a different interpretation of research done over 100 years ago??? Remember waves within waves, within waves! Weekly pivot scale – red, daily pivot scale purple, 4H pivot scale blue!   You decide! To me it looks very like the elephant is coming back into the room! We appear to be in wave 3 so where will it stop?

 SPX Daily 12.JPG

You may have noticed I have provided you with pure technical analysis without reference to any news or substantiation from any other source or influence – oh and it still works 100 years later! NOTHING HAS CHANGED and we still let our governments control the economy and money!

Any analyst that can demonstrate that through a systematical approach rather than random waffle and changing trend lines as the picture develops analysis, I will give permission to use any and all my IP and Copyrighted materials free of charge. 

The concept is to reduce vulnerability by customers that are ignorant (NOT STUPID) in a highly specialized field , those with the knowledge and position have a social duty of care if we want society to improve for all, rather than those in control of power! 

For more information of how I do what I do http://mapportunity.wordpress.com/ . Comments and discussions very welcome!

The statements, opinions and analyses presented in this site are provided as educational and general information only. Opinions, estimates, buy and sell signals, and probabilities expressed herein constitute the judgment of the author as of the date indicated and are subject to change without notice.

Nothing contained in this site is intended to be, nor shall it be construed as, investment advice, nor is it to be relied upon in making any investment or other decision.

Prior to making any investment decision, you are advised to consult with your broker, investment advisor or other appropriate tax or financial professional to determine the suitability of any investment.

© 2012 Copyright Marc Horn - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Andrew Butter
17 May 12, 03:35
Very Pretty: But What's the Answer?

Can you give one example (or more) where you published (in advance) a prediction of the price a market would be in the future, or the price at which it would change direction?


Marc Horn
19 May 12, 12:18
Other predictive examples

http://mapportunity.wordpress.com/2011/12/20/bottom-finally-in/

http://www.marketoracle.co.uk/Article34398.html

http://www.marketoracle.co.uk/Article34398.html

http://www.marketoracle.co.uk/Article34023.html

Plus in all the MAP Analysis series - look for moving to latest median line! Plenty examples which you can verify yourself!


Marc Horn
19 May 12, 13:00
Very Pretty - price time lines - not prices!

I just want to also point out as I said in this part: I do not use prices BUT lines! The price depends on which time it hits the lines. This is cycle analysis which is based on wave theory on multiples time scales - so depending on how waves interact at a point in time the price will vary!

In regards your question you need to know what pivot scale

are you talking about targets on Monthly, Weekly, Daily, 4 hourly, hourly, 15 minute, or even smaller time scale?

When I trade options I work in 60 minute, 15 minute 5 minute and buy and sell on 3 or 1 minute. Clearly this would be useless for someone that is not sitting on their computer full time!

For other index funds I again use at least 3 time scales!

If you dont know what pivot scale you are playing at then you may as well toss a coin!

I am updating my forecasts but having a bit of trouble putting them into "simple English". Click to follow the blog so you can get updates as I do them. I will try to publish at least one a week here - the latest update finished on Thursdays. I will be adding other indices, metals, crude dollar and euro over the next few weeks. From the silver and gold charts in part 4 - I am expecting gold to make a new low!


Post Comment

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

6 Critical Money Making Rules