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Realtraders,
On Friday morning I wrote a post stating that we had a symmetrical
relationship in the SP Z7 and as such, a buy signal was issued (see below).
Obviously, this was not one of my more accurate calls...sorry. To make
things worse, I stated that the stop loss would have been placed near the
94100 level. Well, if you followed the rules, you would have gotten out.
Unfortunately, the market found a bottom just below the stop loss area and
subsequently rallied.
So, what went wrong, what did we learn, and what do we see now!
What went wrong - When I again look at the chart, I really don't see that
we (you and I) made a mistake....the market went against us, no big deal.
Based on the "short-term" nature of the wave structure, we where looking
for a symmetrical match with the original wave that took place between
9/5/97 and 9/11/97 and again measured 4195pts. During Friday's initial
decline, it 'appeared' that the spike low at 95000 at around 10:15am est
time signaled a positive symmetrical match. When I combined this with some
of my other indicators and oscillators, I was getting an overSOLD condition
(obviously not oversold enough because the market continued to decline
after a very small rally attempt from the 95000 level). Thus, I publicly
stated that I was getting a buy signal. Unfortunately, this symmetrical
relationship did not hold and we were forced to take a loss. Remember, the
prudent trader would obey the rules and cut his losses so that I can
reevaluate the markets and regain a proper perspective on market direction.
This way he can return to trade again.
So What Did I/We Learn - The market dictates the direction of prices and
it is our responsibility to remain flexible in our commitments so that if a
market turns against us, we must follow the rules that we laid out "ahead
of time" and get out of the position as planned. Don't become stubborn!!!
What do I see now - I have again attached a chart. This time of the S&P
500 Cash Index 60 minutes. The reason; this current decline in the SP Z7
is the LARGEST decline of this contract and there is no way we can compare
it to past declines. As such, we need to switch to the cash index so as to
avoid thinly traded activity during the early months of the December
Futures Contract.
So, based on the Cash chart, take a look at the black, near-vertical line
which shows the original wave structure dated 9/5/97 to 9/11. This was the
same 'time' period that I presented the other day but used the SP Z7 to
indicate the relationship. Notice the failure of this wave by looking at
the second black on the right side of the chart.
Once that wave failed, our next step is to use the next larger decline to
determine the next symmetrical support. This is depicted by the white line
on the chart which originally began on 8/20/97 and ended on 8/29. That
decline measured 42.65 points +/-8.53 pts (20% rule). If we measure the
most recent decline which ended on Friday (10/17), we have a decline of
51.47 (10/8/97 high of 983.12 minus 10/17 low of 931.65). Believe it or
not, this 51.47pt decline is just 0.29 pts from the maximum decline that
would have been allowed. Therefore, TECHNICALLY this 8/20/97 - 8/20/97
wave HAS ALSO FAILED. This is potentially a bearish sign for the market
because it would suggest that either further lows are expected or 2., a new
wave has started. If it is the later, that would not be that bad but if it
is the former, it would suggest that a decline in the magnitude of 7%
+/-1.4% should be expected. This is calculated using the decline of 8/7/97
to 8/18/97 and is depicted by the yellow line on the chart.
Anyhow, how do I view it....I don't know. My thoughts are this: Since
the current decline was sooooo close to the maximum decline (0.29 see
above) as depicted by the white line wave on the chart, I am thinking that
it is just a slight oversight and that in fact a Wave 4 bottom buy signal
was also issued last Friday based on the 8/20 - 8/29 wave structure. If
this is the case, this is good news for the market and an intermediate
bottom has been set. Early calculations possible suggest an intermediate
rally to the 1027 level on the S&P Cash. If this is not the case, and we
decline greater than Friday's low of 931.65, I suspect we will head down to
the 910 level or approximately a 7% +/-1.4% correction before we again find
support. Note, this support should also be considered as STRONG and new
intermediate term positions should be considered.
Anyhow, these are just some thoughts and I am sure I confused a lot of
people because this structure is a little bit more complicated then we have
seen in the past but I think I have figured it out... I just don't know if
I explained it well enough for everyone to understand. If there are some
other symwave followers out there who want to try to explain...please be my
guest.
Thanks,
John Boggio
PS Please goto the end of this post for URL links to understanding SymWave
in greater detail.
At 10:32 AM 10/17/97 -0400, you wrote:
>Realtraders,
>
> I don't have a lot of time to do a complete write up but I just wanted to
>make a few comments. Currently it is 10:15am est and the SPZ7 has just hit
>the 95000 level.
>
> Attached is a 15 minute chart of the SP Z7 and on it you will see a white
>line drawn from the 95200 to the 91000 (numbers are approx. due to time
>constraint). Anyhow, this is Wave 1-2 and measure approx 4200 points. On
>10/7/97, Wave 3 was formed at 99200. Since then, we have declined to the
>current low of 95000 or 4200 points or our Wave 4 bottom. An exact match
>has occurred. Further, my short term Stochastics is extremely oversold and
>I am getting a BUY signal to go long NOW. Please remember that this is a
>short term chart and to set your stops accordingly. Based on this wave
>structure, your stop loss will be 94160. Right now I am looking for a
>bounce to the 96000 to possible 97000 level at which point I will reevaluate.
>
>Hope this helps,
>John Boggio
>PS For those who are not futures traders, remember, this analysis is good
>for the general direction of the overall market.
>PPS As many of you know, last week I did an analysis on Silver. Just to
>update you, the Symmetrical wave structure has FAILED and you should have
>gotten out when it broke below the 4.98 level as stated in that original
>post. However, I also made reference to greater support in the 4.86 to
>4.95 zone for silver....So far this has held!!! I still like the precious
>metals markets in general.
>Attachment Converted: "c:\eudora\attach\sysp1017.gif"
>
Attachment Converted: "c:\eudora\attach\sysp1020.gif"
For recent commentary and more informations regarding SymWave, please go to:
Commentary: http://www.realtraders.com/boggio/disc7_toc.htm
Info regarding SymWave: http://www.realtraders.com/boggio/boggiobio.htm
Thank you.From ???@??? Tue Oct 21 00:55:23 1997
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Date: Mon, 20 Oct 1997 21:46:55
Reply-To: Visavis@xxxxxxx
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From: Visavis <Visavis@xxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: GEN: Bang for the Buck!
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Status:
Hi!
Do anybody knows who got the best bang for the buck for the 3 index futures
such as Emini, Nyfe and S&P500? Considering dollar to dollar computation.
Margin as follows (as of Sept):
Emini = $2100
Nyfe = $5100
S&P500 = $21000
I like to know on how to compute it for the best rewards in return for your
money.
Warm Regards!
Visavis
Visavis@xxxxxxx
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