Big Advantage of Trading with the Wave Principle
Big Advantages of Trading with the Wave Principle
Plus: Discover Where to Place "Protective Stops"
March 7, 2011
By Elliott Wave International
"Technical studies can pick out many trading opportunities, but the Wave Principle helps traders discern which ones have the highest probability of being successful."
"...although the Wave Principle is highly regarded as an analytical tool, many traders abandon it when they trade in real-time -- mainly because they don't think it provides the defined rules and guidelines of a typical trading system.
But not so fast -- although the Wave Principle isn't a trading "system," its built-in rules do show you where to place protective stops in real-time trading."
"How the Wave Principle Can Improve Your Trading"
- Wave 2 can never retrace more than 100 percent of wave 1
- Wave 4 may never end in the price territory of wave 1
- Wave 3 may never be the shortest impulse wave of waves 1, 3, and 5
- How the Wave Principle provides you with price targets
- How it gives you specific "points of ruin": At what point does a trade fail?
- What specific trading opportunities the Wave Principle offers you
- How to use the Wave Principle to set protective stops
February's NFP
What was particularly discouraging was the fact that both the wage number and the workweek were flat. Nominal wages, in fact, have been stagnant in three of the past four months. Weekly average earnings have also been flat or negative in three of the past four months. How on earth can these statistics possibly be viewed as bullish for the economy? The year-over-year-trend in average weekly earnings in the past three months has softened from 2.6% to 2.5% to 2.3% today. At the same time, it is probably reasonable to assume that surging food and fuel costs will bring headline inflation to, and possibly through, 3% in coming months. In other words, the growing risk of falling personal income in real terms, even with the positive growth in payrolls, is a glaring yellow light as far as the consumer spending outlook is concerned.
… Yes, the unemployment rate dipped again to a 22-month low of 8.9% from 9.0% in January and the nearby high of 9.8% in November. This reflected a 250k rise in Household employment — the third increase in a row — and a flat participation rate. A couple of behind-the-scene facts: from October to February, an epic 700k people have left the work force. If you actually adjust for the fact that the labour force participation rate has plunged this cycle to a 27-year low the unemployment rate would be sitting at 12% today. Moreover the employment-to-population ratio — the so-called “employment rate” — stagnated in February at 58.4% and is actually lower now than it was last fall when “double dip” was the flavour du jour.
All that matters in these employment reports is what the jobs environment means for income, because workers generally spend in the real economy. With credit harder to come by, and with fiscal policy soon to become more focused on austerity, it is the income that the labour delivers that will prove to be the critical determinant of the economic outlook. So while the “spin” may be over near-200k headline payroll gains, another dip in the headline unemployment rate, the organic income backdrop can really only be described as tentative, at best, especially in real terms as gasoline prices make their way to $4 a gallon by the time Memorial Day rolls around."
Happy Trading!!
Breaking News Bulletin: News Is NOT the Main Driver of Stock Market Trends
Breaking News Bulletin: News Is NOT the Main Driver of Stock Market Trends
A FREE myth-busting report from Club EWI reveals the real force behind long-term trend in financial markets
March 2, 2011
By Elliott Wave International
A FREE myth-busting report from Club EWI reveals the real force behind long-term trend in financial markets
- "US Stocks Advance Ahead of Bernanke's Testimony" (International Business Times)
- VERSUS -- "US Stocks Turn Lower As Bernanke Testifies To Congress" (NASDAQ)
- VERSUS -- "US Stocks Rise With Bernanke In Focus" (MarketWatch)
- VERSUS -- "Stocks Decline As Bernanke Comments Fall Flat." (Wall Street Journal)
"Suppose the devil were to offer you historic news days in advance. He doesn't even ask you for your soul in exchange. He explains, 'What's more, you can hold a position for as little as a single trading day after the event or as long as you like.' It sounds foolproof, so you accept. His first offer: 'The President will be assassinated tomorrow.' You can't believe it. You and only you know what's going to happen. The devil transports you back to November 22, 1963. You short the market. Do you make money?
The first arrow in Figure 6 shows the timing of the assassination. The market initially fell, but by the close of the next trading day, it was above where it was at the moment of the event. You can't cover your short sales until the following day's opening because the devil said you could hold as briefly as one trading day after the event, but no less. You lose money."
- The Problem With “Efficient Market Hypothesis”
- How To Invest During a Long-Term Bear Market
- What’s The Best Investment During Recessions: Gold, Stocks or T-Notes?
- Why "Buy and Hold" Doesn’t Work Now
- How To Be One of the Few the Government Hasn’t Fooled
- How Gold, Silver and T-Bonds Will Behave in a Bear Market
- MUCH MORE
EURUSD Attacks Key Confluence Zone
A Book Review: Fibonacci Analysis
If you have experience trading Fibonacci levels might I suggest a good read in Fibonacci Analysis by Constance Brown. This is not a beginners book, however, if you have been exposed to the basics of Fibonacci numbers, ratios and confluence and want to take it to the next level then this book might be for you.
Ms. Brown's passion on the subject is obvious. She takes you through her approach in a building block fashion that leaves you knowing that your learning curve is just beginning. Connie also introduces the reader to some basic Gann principals and hints at how these analysis work in concert.
If you are a passionate Fibonacci trader and want to enhance your knowledge on trading using Fib levels then I highly suggest adding this to your collection.
Amerikan Intervention
Oil was once again in the news today, but this time not for another price spike.
Yesterday I wrote, “While speaking at a Bloomberg breakfast in Washington Wednesday, Tax-Cheatin-Timmy of the Treasury admitted to central banking manipulation when he said, ‘The economy is in a much stronger position to handle’ higher oil prices. ‘Central banks have a lot of experience in managing these things.’ If anyone outside the Federal Reserve would have deep knowledge of how the ANTI-free market central banksters operate, it would be the head of the US Treasury. Moreover, Benron Bernanke has already admitted numerous times that his QE policy was designed to manipulate the stock market higher. Add oil to the list now, and soon the destruction of the gold and silver markets.”
From its high today, oil plummeted 8%. Tax-Cheatin-Timmy wasn’t bluffing, but I didn’t think he was anyway.
What got the oil market falling today was a rumor that the Libyan dictator Gaddafi had been shot and killed. With this news the initial reaction of the market was, “Great, now that that’s over relative calm will put Libyan oil back on the market.” My initial reaction was, “Wow, the central bankers just murdered Gaddafi.” It wouldn’t really be the first time that the global banking cartel put a hit on someone that interfered with its interventionist plans – would it?
The real news of what was slamming the oil market come out later: margins. The ICE exchange increased margins for both WTI and Brent crude oil contracts, while the NYMEX (now owned by the CME) increased the overnight margins for its WTI crude oil contract. Overnight margins were increased for speculators and hedgers alike.
With this news the reaction of the market was, “Damn it! I can’t afford to carry all of these long positions and this announcement will keep a lot of new traders from getting long and helping my current positions. SELL!” My reaction was, “Oh, so that’s how Tax-Cheatin-Timmy and Benron Bernanke manipulated the market – with a phone call. With one call from the Chairman of Intervention, the head of the CFTC was given his marching orders to bring oil down who in turn called the exchanges.”
Why didn’t EZ-Al Greenspin do the same with Nasdaq margins in 1999 and 2000? Oh yeah, because that would have brought sanity to the EQUITY bubble and we can’t have that. What was I thinking? My bad.
Trade well and follow the trend, not the so-called “experts.”
Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.
| larrylevin@tradingadvantage.com |
When You Feel the Elliott Waves, Your Eyes Become Wide Open
When You FEEL the Elliott Waves, Your Eyes Become Wide Open
How the waves of social mood led to an investment method worth looking into
February 24, 2011
By Elliott Wave International
Have you ever been at the ocean body surfing, just waiting for that perfect wave? When you begin to truly feel it, your adrenaline starts pumping.
I came to work for Elliott Wave International in the late 1980s -- before the Internet, before ETFs, before smartphones. Part of my job was to review the many publications that came to our offices, in search of articles that spoke to the "mood" of the markets.
It was a task that constantly searched for an answer to the question, Is there a large cluster of articles in print right now to indicate that people are extremely "bullish" or "bearish"? At that time my searches related mostly to the commodities markets, but I also kept close tabs on stock market news.
At first it was tedious. When I found groups of articles that reflected a certain mood, I would clip and save them to a file for our analysts to review. Yet after several months, I actually began to develop a feel for the mood patterns in the articles. I started to use this to see if I could anticipate where the price trend would go over the next several days or weeks.
The idea was simple: When the mood in the news articles got extremely bullish – and our Elliott wave counts suggested that a rally was completed -- it would often represent a downside opportunity; when that mood became deeply gloomy, it was usually time to get bullish.
I was amazed -- my adrenaline was pumping. I actually started to get a feel for the waves -- a feeling for the direction of the market! I was hooked, so I took it to the next level.
I had read Prechter and Frost’s Elliott Wave Principle – Key to Market Behavior before I interviewed for my position. It was interesting, but it didn’t really speak to me. But after I had personally experienced and understood what it means to feel the mood of the markets, I read it again. The second time took on a whole new meaning.
If you read Elliott Wave Principle a long time ago, or wish to read it for the first time, Elliott Wave International has just released an online edition of this investment classic, free to members of Elliott Wave International’s Club EWI. Membership is free. This is your chance to learn how the waves of social mood can change the way you invest forever.
Follow this link to become a member, and to receive FREE online access to Elliott Wave Principle, and the many other free investment and trading reports available to Club EWI members.
