Thread: Elliott Wave Trading Discussion

Originally Posted by aerocom

I think you are in the right spot with the Gbp$. To arrive at my conclusion, I use relationships between alternating waves. The relationship that I get as operative is the cardinal ratio of contracting forms .707 rounded .71. It works out nearly perfect between A and C. Assuming the relationship remains constant between B and D, wave D should carry to a low of .4745.

Now, with this hypothesis, we can go further and estimate the potential for 4745 being obtained. From where you have your first D, we would have to assume the pattern being traced out is an expanded flat. Which I think it is. The common relationship between a and c is 1. Since a is 895p then c would equal a at 1.6127, price has reached 1.6148.

Price has already exceeded 1 and other ratios can come into play. The dominant rhythm here indicates ratios of a square and cube should be considered. The likely ratios here are 1.17 and 1.11. When we apply these ratios and consider that the pattern is an expanded flat, the most likely of the price targets would be 1.11 times a for a target of 1.6225.

Based on this analysis, we can now narrow price range to 6148 to 6279, which is 1.17% of a. The likely target is 1.6225.

Armed with this and returning the Elliott principle of wave equality, we can arrive at likely targets for the end of wave D. Wave a of D is 1475p. If price has topped at 1.6148, the likely wave D low is 1.4673. With the likely target for wave B being 1.6225, we arrive at a target of 1.4750.

From this analysis, we can say that it is probable that we are in an expanded flat that when completed will complete wave b of D. The flat will likely end in the area of 1.6148 and 1.6225. When completed, wave c of D will be underway and likely end in the area of 1.4750 and 1.4745 with a probability of the price extending to 1.4673.

You did a good job. Remember, the real money is in the long haul.

Good Luck.

Arecom, where did you read about the angles & ratios that you talk about?

I went back over my weekly count I posted last week, and I found two instances where I had what I consider to be a corrective wave as a motive wave. The first was the second minor wave down from the 2008 top which is now part of blue wave (2). Thanks to Stanchiam for pointing that out. The second was the first minor wave up from the 2009 bottom which is now part of the ending truncated diagonal. After making these changes, the count has become even more bullish. I have a 3H count I'll post as well.

Originally Posted by aerocom

I think you are in the right spot with the Gbp$. To arrive at my conclusion, I use relationships between alternating waves. The relationship that I get as operative is the cardinal ratio of contracting forms .707 rounded .71. It works out nearly perfect between A and C. Assuming the relationship remains constant between B and D, wave D should carry to a low of .4745.

Now, with this hypothesis, we can go further and estimate the potential for 4745 being obtained. From where you have your first D, we would have to assume the pattern being traced out is an expanded flat. Which I think it is. The common relationship between a and c is 1. Since a is 895p then c would equal a at 1.6127, price has reached 1.6148.

Price has already exceeded 1 and other ratios can come into play. The dominant rhythm here indicates ratios of a square and cube should be considered. The likely ratios here are 1.17 and 1.11. When we apply these ratios and consider that the pattern is an expanded flat, the most likely of the price targets would be 1.11 times a for a target of 1.6225.

Based on this analysis, we can now narrow price range to 6148 to 6279, which is 1.17% of a. The likely target is 1.6225.

Armed with this and returning the Elliott principle of wave equality, we can arrive at likely targets for the end of wave D. Wave a of D is 1475p. If price has topped at 1.6148, the likely wave D low is 1.4673. With the likely target for wave B being 1.6225, we arrive at a target of 1.4750.

From this analysis, we can say that it is probable that we are in an expanded flat that when completed will complete wave b of D. The flat will likely end in the area of 1.6148 and 1.6225. When completed, wave c of D will be underway and likely end in the area of 1.4750 and 1.4745 with a probability of the price extending to 1.4673.

You did a good job. Remember, the real money is in the long haul.

Good Luck.

That WAS my view ... has changed this past week because the move higher has developed in a more bullish manner that cannot be reconciled with the flat... as the short term structure is just not consistent with a top in the 1.6148-1.6225 area (I had 1.6138-96 personally...)

I think the Pound may be forming a series of bullish 1-2s and is getting ready to blast off into a series of wave 3s. If you are short this pair on the daily/hourly timeframe I'd be very cautious if you see a consolidation pattern starting to form over the next week.

Originally Posted by FX-Forecaster.com

That WAS my view ... has changed this past week because the move higher has developed in a more bullish manner that cannot be reconciled with the flat... as the short term structure is just not consistent with a top in the 1.6148-1.6225 area (I had 1.6138-96 personally...)

Interesting. I'm putting my sell order back out on open, if I have time. If it moves through 1.6184, depending on the strength/force of the move, I may change my view. There are 2 other options that brings the price in slightly above the likely target area. One was expressed in a previous post at 1.6165. The other is 2.618 of the 3 wave move that preceded the current 5 wave move which is 1.6289 which is slightly higher than the 1.17% area in the post you referenced. Anyway, I'd like to see what your thinking is.

Good Luck.

GBPUSD wave development must match with other energies, S&P and Dow Jones. I do not know whether it can break the upper trendline or not. I can see that it will go up for another two more months.

Hello guys!

Seems that Gbp/Usd is ready for more gains within zig-zag started on Jan 2012. But we shoudl see strong bearish reversal this year. 1.62 and 1.64 are figures to keep an eye on



______

follow us on twitter

Uploaded with ImageShack.us

This Aussie count esthetically "looks" good. A=C could be accepted. Counting around I've found that 423.6 is common expansion of the first wave of the movement being same degree or not. Start to think seriously of new highs inline with Ahmed alternate of a diagonal triangle for wave 5. This move could be 4 or B of 3 of the diagonal triangle. A move below 1.0225 will invalidate this wave count.

Aerocom, I'm also interested in those ratios, could you elaborate?

Originally Posted by grega

Hello guys!

Seems that Gbp/Usd is ready for more gains within zig-zag started on Jan 2012. But we shoudl see strong bearish reversal this year. 1.62 and 1.64 are figures to keep an eye on





______

follow us on twitter

I think the take away on the Gbp$ is that there is a consensus that the price will increase but variance on how much.

Thanks Guys.

Good Luck.

Originally Posted by xtura

Uploaded with ImageShack.us

This Aussie count esthetically "looks" good. A=C could be accepted. Counting around I've found that 423.6 is common expansion of the first wave of the movement being same degree or not. Start to think seriously of new highs inline with Ahmed alternate of a diagonal triangle for wave 5. This move could be 4 or B of 3 of the diagonal triangle. A move below 1.0225 will invalidate this wave count.

Aerocom, I'm also interested in those ratios, could you elaborate?

Yes. The ratios are from some information I obtained that is attributed to "Bryce Gilmore." He has some publications that are quite expensive and Software that is available for esignal, also expensive, about A$5k. Anyway, one of the things that interested me, especially while reading Ian's book was the ratios that applied in market movements. As you my have already discovered, the fib ratio's are nearly always approximate.

One of the things Gilmore has done is take the ratios and categorize them in relation to geometric forms. He has further subdivided them into Cardinal, Rhythm and Arithmetic ratios. According to Gilmore the most important geometric ratio is 1. Now, I have also found 2 to be an important number in the markets which Gilmore lists as an Expanding Cardinal ratio and an Expanding ratio of a square. For instance, when price overshoots 1, it will often terminate in the area of 1.05+/- percent, which is in the area of 1 + the rhythmic of (0.111 / 2.)

I have found that when viewing the price movement, if it is following a certain rhythmic movement, the Golden mean as an example, the ratios in that grouping will apply. For instance, the Expanding ratios of the golden mean according to Gilmore are 1.272, 1.618, 2.058, 2.618 and, 3.33. The Contracting ratios are .236, .300, .486, .618, .786.

In application,when I viewed the $yen, in this regard, I came to a conclusion that 1 and 2.058 were the operative ratios and 2.058 was a ratio on the Golden mean. Therefore, .486 would likely be a limiting ratio in any contraction. The $yen did turn in that area. Now, 2.05 is also close to the Cardinal Expanding ratio 2, in which case .5 could not be ruled out.

This is probably too technical for most here But, you can contact me if you want to chat further.

Good Luck.

Yesterday, I posted that the .707 ratio was the ratio in play and set the likely target for the low in wave D. As a result of the discussion, I further analyzed the possibilities in this pair. Specifically, I looked at further ratios in the cardinal ratio sequence and the ratios of a square. In doing so, I assumed that my analysis yesterday of wave a of D is complete and wave a of D is 1475p.

With that assumption, a .707 retracement of D would yield a target of 1.6312. With that in mind, I then set out to find if there were other ratios in the movement that would confirm that the rhythms in the Gbp$ are in relation to the square or if they are cardinal ratios. Most are the same but, the cardinal ratios include 3.00, 2.236, 1.732 and 1.618. The Gbp$ price at 1.6148 has exceeded that lower ratios and 1.6148 is 1.875% of i on my chart. The ratio 1.875 is an arithmetic ratio within the sacred ratios. The next likely ratio is the number 2, which is a ratio on both the cardinal and rhythmic ratio of square line.

The price of the Gbp$ at 2 is 1.6170. The next Expanding ratio of a square is 2.828 which would give a price of 1.6315, consistent with the .707 of 1.6312.

Another option? Alternate count in red which likely means a diagonal is the operative pattern. If it is a diagonal, price cannot exceed 1.6269. Here wave (a) would be 176p and would be 1.41% of wave "a." Then 2 times wave (a) would equate to the reactionary target 1.6148 the actual value is 1.6142. But, 2.828 times wave (a) would equate to 1.6276. A and C are equal at 1.6265.

This would yield a slight revision in my previous target and a turn in the area of 1.6265 to 1.6315.

Good Luck.

I short the JPY last week Friday because i still think that is wave 4 on the top. No so fast yet come to the end.

[QUOTE=2_bits;1120196]

Originally Posted by 2_bits

OK guys, I got deep in the weeds with this one. Enjoy!

Lower original stop on Swissie about half way. Will check in a few hours.

Covered Swissie at about BE. Will reshort on confirmed weakness, which I think we'll see later this week.

I see two scenarios for the Aussie, both of which have the move down from late February as corrective. Because I count white wave 1 as an impulse, I am going with that as my preferred count. However, there's that pesky triangle, which would be an (x) wave in my alternative count. Either way, I am bullish on this pair and looking for some kind of bullish confirmation before I enter.

Originally Posted by JoeyLee

I short the JPY last week Friday because i still think that is wave 4 on the top. No so fast yet come to the end.

Joey;

You may be in the right position. But, if you go back 10 years and look for a similar low, you will find that from that low in a down market, there was a 5 wave rally of 3300+ points over a 2 year period. That move like this one moved up, then side ways for 2 months then up and sideways for about 4 months before moving up again. A similar move here would target 109+ in the $yen. Which as I posted previously is near the terminus of wave 2 of the 5th wave ED.

On another note, the DOW futures has moved up for 37 months, not including April, June would be the 40th month. That is a 3.5 year bull run and an extreme even in good times. If we haven't started down already, we should by the first of June to the first of July. The high may have been put in in March like it was in 2002. If not, May will mark the end with a new high. The Dow has a data with a low in Oct. It should be a minor low that should continue down at least into Feb of 2013 and possibly later.


Good Luck.