Can anyone count that drop yesterday?

[theoryman]

Just suppose the possible completed 5th, rather than just the RTB of the 5th was what that last High turned out to be.

The first bit is "straight forward" IMO, 24 hr data Nov 1st to 8th.

(Approx levels since they will vary from supplier to supplier.)

Start 5335
End 1 5496
End 2 5381
End 3 5602
End 4 5430

Now for the 5th. I am happy with the start 1 2 3 A, then the a of the RTB, then the b of the RTB, then it got difficult (it was dancing to the tune of the S&P at this time).

One option was the next move up was a completed five, for the c of the RTB.

The other option was to shorten the c of the RTB - based on a section where my data had a lot of same level stuff (could have been anything).

So what was the C4 of the 5th of the c of the RTB became the C4 of the whole final 5th

Following on from that; what was the 5th of the c of the RTB, became the 5th of the 5th.

So those last two small moves, end up stuck on the end of some much bigger ones; when viewed on a timescale that lets you see all eight days.

End 5 ???? 5650

Now 5430 was the start of another count and that level got hammered yesterday, so what follows from that is still possible.

However, using an extreme case of my reward, risk, probability of success approach led to me thinking about that completed five.

Given where we think it is in the bigger picture, what must happen?

Well it can't get retrended because that would mean it was an A in a 1 2 3 A RTB C4 5 count and no-one has raised that as a possibility.

So IF it is a completed five, the FTSE must bounce before it hits 5335.

This morning it bounced off 5337 .........., which is either a total coincidence, or a level acting as support when it needn't do (psychological rather than structural) or my analysis could indeed be correct.

The maths at the time was interesting and allowed me to wait for a mini bounce before trading instead of standing in front of a runaway.This will now form a part of every "brick wall" trade I carry out while watching the charts.

Even when it came back up through 5345, the reward:risk was still around 30:1 and I rated the probability in the range of 5% to 10%.

Can anyone count that drop yesterday as a completed three? Or anything else for that matter?

It has me beaten apart from one section that I think is a C4 which I was trying to find yesterday.

It was forming as I was looking in the previous data. What a costly error that turned out to be in terms of lost profit.

cheers theory

[Perry]

Well for what it’s worth, it looks like a 5 to me on the S&P futures (ES).

[theoryman]

(11-10-2011 02:10 PM)Perry Wrote:  Well for what it’s worth, it looks like a 5 to me on the S&P futures (ES).

Hi Perry.

Do you agree that at this stage it is impossible to say whether it is a three or five?

So you favour the five count as opposed to the three but you are not saying that the three has no chance of being correct.

So can you construct a three count?

I had a go on the FTSE, starting with the 4C that I mentioned; I made it the 4C in the C and worked from there.

I ended up with a short A to start and and then a short B ( a bit like the short 1 2 we often have at the start of a five, never bothers us then.......).

The very long C then has a shortish 1, short 2 and long three 3, nice A, three for the RTB and it hits the 4C I had already fixed in place.

The final 5th of the C is quite long as well, has an A and a decent 1 2 3, a lousy RTB (could be anything) what probably turned out to be the C4 (but could have been anything at the time). The bounce took out the start of the final 5th anyway, so it's over.

Yes it has weaknesses as a count but it has some strong points as well - certainly a non-zero probability option.

cheers theory

[Perry]

Can I construct a 3? Yes. I assume by your question you mean a completed 3, not a 3 of 5.

All completed moves are either a 3, 5, RTB 5. Of course, what looks like a completed move may turn out to be only part of the move, like 3 of 5. But, you know all of that, I say it just because whether I count the ES move down from 1275 on 11/8 to 1218 on 11/9 as a 3 or a 5; many of the sub-waves are going to count the same either way.

The only difference is the move down from 1272 to 1240 on the 9th and even within that the last part is going to count the same…so the differences get down to where I don’t have enough detail at 1 minute.

Without an assumed context (count) of the larger degree, I’d be relying on alternation, and/or speed changes to distinguish the count…which is a stretch of my ability at this point.

I’m still learning, so if anyone sees flaws in my thinking, I’d appreciate the feedback.

Perry

For all charts created using Elwave, the wave count and analysis were done manually and not generated by ELWAVE.

   

   

[theoryman]

(11-11-2011 08:18 PM)Perry Wrote:  Can I construct a 3? Yes. I assume by your question you mean a completed 3, not a 3 of 5.

All completed moves are either a 3, 5, RTB 5. Of course, what looks like a completed move may turn out to be only part of the move, like 3 of 5. But, you know all of that, I say it just because whether I count the ES move down from 1275 on 11/8 to 1218 on 11/9 as a 3 or a 5; many of the sub-waves are going to count the same either way.

The only difference is the move down from 1272 to 1240 on the 9th and even within that the last part is going to count the same…so the differences get down to where I don’t have enough detail at 1 minute.

Without an assumed context (count) of the larger degree, I’d be relying on alternation, and/or speed changes to distinguish the count…which is a stretch of my ability at this point.

I’m still learning, so if anyone sees flaws in my thinking, I’d appreciate the feedback.

Perry

For all charts created using Elwave, the wave count and analysis were done manually and not generated by ELWAVE.

Hi Perry,
I did mean a completed three as opposed to the first three of five - sorry for any confusion.

There is one section, that you have as 11.4 to 11.5 on both charts that I think has a very good 1 2 3 A RTB 4C set of subwaves, so must lead into a pivot at some degree, which it did.

The next bit you have as a completed three but it could easily split into a five IMO which then gets retrended. (It has a longish first, middling length 3rd and a shortish 5th.)

That is a very common problem and it happens because there just isn't the detail available to place the splits. Even when you know it is over, you cannot see the final 1 2 3 A RTB 4C 5 pattern for the final part, so seeing where the starting bits were is a non-starter.

All I then do is keep looking at the next bit and see if that reveals anything significant and maybe it allows me to place what the previous section is more likely to be.

I have just been reading a post elsewhere that reflects the problem with that drop on the S&P - which was mainly out of hours. The guy posting really rates another site which has it as a five but he has it a solid three....

cheer theory

[theoryman]

Still using the count that starts at 5335. Just had yet another close visit to 5340 when the DAX opened.

So IF it is a five up to 5650 and THEN a three down to 5337, the next move up is still alive and the minimum target is 300+ pts away for a risk of <10.

cheers theory

[Perry]

(11-13-2011 04:46 AM)theoryman Wrote:  ...
The next bit you have as a completed three but it could easily split into a five IMO which then gets retrended. (It has a longish first, middling length 3rd and a shortish 5th.)
...

Yes, I can see it easily counted as a 5.

Thanks for continuing to share your thinking!

Perry

[theoryman]

Low probability count was wrong, outcome in terms of trading was positive.

IF it had turned out to be correct then ............

cheers theory