TRADING FORK EXTREMES – 3 month Setups.

[Summerset]

Originally Posted by Summerset

Monthly:- (See Monthly Chart)

The confirmed break above 3650 as indicated by price break > the Gold fork high median, has negated formation of a double top on the monthly.

Long term, there are now only 2 possibilities:-

1- Wave-1 is the 1^st primary bull wave of a Bull market effected by 9/11, and has been dully fully corrected by a zigzag wave-2 to an orthodox 38% of its overall Fib size. The breakout above 1-v indicates that we are now in wave-3 on the monthly, and negates possibility of any complex corrections occurring in wave-2 other than the completed zigzag.

2- If the current undergoing correction falls and closes bellow the Gold fork high median (3720). The analysis in (1) becomes negated, as this would mean that we are still seeing at least an expanded ABC flat in Wave-2, that could still even unfold in a more complex correction.

Primarily, as we take trades only with a momentum proven trend, the Monthly & weekly WSI readings & plots are both showing Eurodollar to have broken out in bullish trend, and therefore we are biased to have broken out in Wave-3 –(possibility-1), and will take long term trading commitments based on this probability.

Projected long term targets for wave -3 calculated from the confirmed Wave-1 Swing are :-

0.618 of wave-1 swing = 1.6770
1.00 of wave-1 swing = 1.8710

Note that as with all wave-1(s), wave-1 on monthly has taken price ideally to a test of the broadening formation, formed on the monthly from Augst 89 à Dec 95.

The current pull back / correction should sustain within the monthly rising wedge, and proceed to break above and support atop levels of the broadening formation > 1.45. Technically, I believe this will proceed as described by virtue of the already broken double top @ 1-v. Having broken the formation, there is no sense in falling back on it except to support on a broken resistance.

We therefore recommend long term to aggressively accumulate 1.3760/1.3720 till 1.3680, for a preliminary advance to 1.46, and further possessing the issue, and holding for mark up until 1.6700.

Keep in mind that as the FED eases on rates, and the ECB raises its anticipated once or twice (25 basis points hikes), interest rate differentials between the Euro & Dollar are bound to reach parity earlier than many speculators anticipate. And the central banks diversifying their reserves in Euros are counting on this premise to dawn on investment & speculative markets and appreciatively mark up their holdings accumulated at 1.32-36 to the dollar.

Its becoming a matter of limited time as the markets begin to discount this as a fact.

Let now evaluate, why the 3760/3720 zones are targeted for accumulation.

Weekly:- (See Weekly Chart)

Wave-1 of anticipated Wave -3 on monthly, breaks up into the confirmed 5 wave counts shown on the weekly. Wave-5 of this wave -1 confirmed on failure at the Elliot channel drawn parallel to the Wave-2 & wave-4 channel line

Typically, we are commencing on a 3 wave correction, pending a 5 wave progression. Because the correction, is going to be as complex as they come. We will not concentrate on the wave form or count, but on its ultimate Fib expansions.

In order to project the ultimate correction's Fibonacci projections, we need to detect & confirm the 1^st complete down leg (Wave-A) of the correction, to throw extensions from. We will therefore move to a smaller time frame to break up the weekly candles

Daily:- (See Daily Chart)

Wave-3 is a confirmed extension (1.618 x wave-1), that should be double retraced. Once by current Wave-4 (down), then a tranculated Wave-5 up. And another ABC correction down (the 2^nd retracement that will make a double ).

Typically too, wave-4 should retract to top of Wave-1. (3720 zone shown).

Note that Wave-2 was a flat. So we expect the start of Wave-4 to be a simple or double Zigzag first.

To project its bottom we need leg "A" of this zigzag to complete. (lower lows on daily must cease to be made) and leg "B" should commence to a Fib retraction of "A".

Currently this is not the case, as a new low of 4015 was made to day.

Once a low for "A" is established, we will take a fib projection of 1.618 from "A" top to its bottom, and therefore forecast "C" (our long entry zone). Currently with respect to the lows recorded, the 1.618 projection of "A" stands ideally at Wave-1 top (3720). This is yet not confirmed however, until "A" ceases to make lows

Once a low is made for "A" too, we will sell 0.618/0.38 of "A" for 3720 "C" projection

We will also sell the close of the day that closes below the low of the high candle that marks "B"'s top

We will add to our sells on a break of the established "A" bottom.

All to target the 1.618 Fib extension of "A" of course

We will be using the WSI to confirm our short entries, and calling the entries in real time on the thread.

We expect to reverse at 3720, provided the daily WSI confirms, or at a max of 3440 (Long term median on the weekly chart) also on a signal confirmation of the WSI too

In the meanwhile, until a low for "A" is confirmed. Intraday traders can sell the down trend line shown on daily

Profitable Trading.

MONTHLY:- (See Chart)

We still believe to be in Wave-3 on monthly as outlined under(1) above.

Within the internal structure of this wave (Shown in the monthly chart below), Wave-1 is 1330 pts. Wave-3 has already recorded a magnitude of 1330 pts = Wave-1. The mext target at 1.618 = 2150 pts from Wave-1 top = 1.5125. Initaly, last week we would have prefered to long at 1.618 extension of Wave-1 = 3720/60, and attempted to short a correction to such levels on a weak momentum signal.

WSI Momentum does not warrant this now on the shorter daily & 4hr frames. Further more after last week's action, price has supported on the median of the weekly Fork, on a 3rd test of it. (See weekly chart).

This support > median, confirms a permenant break of the rising wedge upwards. A test of the monthly .618 (3720), is NO longer forth coming, and relaying on a close monitor of WSI momentum we will stand prepared to reverse & long at this weekly median.

DAILY:- (See Charts)

we have 2 possible counts shown below:-

Daily-i :- Shows the 1st possibility, according to wich, we expect to be currently in a tranculated V.v that should tranculate between 4465-4500.

Our WSI daily momentum chart supports this, & is actually about to forecast a tranculation.

However, I am not biased to see this playout because of the price action that has been unfolding last week. (This is detailed under Daily-ii).

Daily-ii & ii Zoomed. Here, we are in a higher degree 3rd wave (W-III), wich should be equal to previous W-I, or greater than its magnitude by 0.618.

This fact is emphasized by the observations that :-

1-The ii-iv Elliot channel line of past WI, was supported on, effectively terminating WII from making a prolonged bearish ABC correction

2-The iv-A line of the I.iii, & I.v waves, appears now to be breaking upwards, to be supported on. These familiar with Robert Fischer's work & Fib applications, will know that if there was going to be a tranculation here, the iv-A line should have held as a resistance, for a flat or zigzag to commence down to the ii-iv line at least.

That was initally why we had sold the iv-A line in the 1st place.

Currently Daily & 4hr momentum do not even support failure of the iv-A line.

Accordinly, as of next week, we will stand ready to signal longs to target 4600, & 5100

Profitable Trading

[Summerset]

Originally Posted by Summerset

Short the market (4230) at 2% Exposure SL at 4295

Stop Hit.
Sell Again at 2% Exposure the Market <4235-30>
Stop at 4300.
Target 3760
We are selling on 4hr signal
Profitable Trading

[Summerset]

INTRODUCING WSI - A NEW TENET IN WAVE THEORY:-

*"By doing away with EW labeling, the market trades only in flats (Dow lines), before breaking out into extended waves targeting a measured pitch of Phi & its multiples."

This is a new tenet to Elliot wave theory that I plan to advance before the coming IFTA conference in November 2008.

I have been working on a wave segregation system for the past 6 month, to prove the above hypothesis valid.

It also resulted in a custom designed index indicator with its own signal line, that segregates such extended motives from flats.

A track record for this indicator (The Wave Segregation Index), is being run for the coming year till November '08 on Collective 2. To keep track of it click here:-

http://www.collective2.com/cgi-perl/...temid=29213458

This track record will prove the WSI indicator an indispensable tool to Elliot wave segregation, that is based on momentum, instead of traditional form & ratio, as advanced by the late Mr. Elliot - GOD rest his soul.

To encourage traders use the index, calls made on C2 using the index will be made here too. However, follow up on the position status, will not be made, as such can be easily verified from the collective 2 site, once the calls are closed at profit or loss.

An equity curve however will be posted on a weekly basis, as run by C2, – in their capacity as an independent auditor, with the purpose, of validating the above tenet, and establishing as wide as possible use of the indicator, for future multiple commercial applications.

I hope the application will revolutionize the way Waves are traded.

Profitable Trading as Always.

[Summerset]

WSI portfolio for 20/11/07 is attached in pdf format.

The standard Money managment tool for calculation of limit position sizes ia also attached in xls format.

NOTES:-

1- For C2, we are using 2.5-->3.5% risk exposure per position. This means we could lose 2.5 -->3.5% instantly on any individual position. And allows us to trade 8-9 contract sizes of 27-29 mini lots, all at once on a C2 account of size 100K. Leverage on C2 is only 33.33

By changing his account size, & allowed leverage in the respective xls slots, the trader can calculate his position size as related to a moderate 2.5-->3.5% risk.

2- Account allocation per contract on the C2 module is 11-->13%. Account allocation = the margin + Stop the trader is using to service the position.

Because we're mid to long term swing traders, not all our positions fill at once, and its therefore allowed to place limit orders on an account = 200% of the account size.

This is because as individual contracts fill, & move into positive territory, the % allocation allcocated to each contract drops from (Margin + SL cover) --> (Margin only), allowing the trader always more space for successive re-loading.

So by staying extended, the trader is diversified, and does not miss out any opportunities, that may mature within his selected time frame.


3- We are using 120pt stops. This does not mean that we would allow 120pt drawdowns on our positions. A 120pt stop is used as a standard, because this equals the max daily breadth of most issues we're trading. And being mid-long termers, we don't want to be stoped on daily spikes.

Also as we're switching soon to automated EA trading, positions will be filling immeaditely on signal at market, keeping the SL as a standard outside daily breadth range. (120 max).

Our targets are usually > 300 pts in the least.

And we don't anticipate drawdowns on individual positions in excess of 60-70pts at most. When that happens we interfere to hedge or close out at an intraday pivot level.

All the Best & profitable Trading.

[Summerset]

Apparently, fourm system doesn't accomodate xls files.

I have attached the excel MM module below zipped.

[Summerset]

Attached update on 22/11

We're only engaged on DollarCad & Swissdollar longs. And out at breakeven on the Euroyen & Sterlingdollar shorts.

Profitable Trading.

[Summerset]

Attached is the WSI portfolio update till end of last week 23/11.

The portfolio is now long GBPAUD, GBPUSD, USDCAD, & USDCHF

On the USDCHF, we longed 1060 + 1020 + 965, and closed out the 1060 + 1020 at -120 pip losses. We're still holding the 965, and will possibly add higher up.

Stops on all other issues are at breakeven.

[Summerset]

Carry accumlation Trade attached
Load 97.00 --> Target 102.00 & add for 105.00 / 107.00