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Kish:
When you're trading off an elliott wave analysis, and you're unsure about the
numbering, the following may help:
1) You likely have a w5 if the oscillator reached a higher peak under what
you believe is w3. If the oscillator was higher under w5, then the chance of
a higher high to come is much greater. Also, you should have a clear
pullback of the oscillator to at least the zero line if not negative during
what you suspect is w4, otherwise you're just looking at an extended w3.
2) Your PTI number of 89 indicates a great likelihood of higher highs to come
3) On a fundamental basis, BTW, any recovery in Asia is still VERY YOUNG, as
the economies are still in region-wide recession. Once & when they recover,
there will still probably be years of stock market upside, assuming that they
have improved their monetary, fiscal, and public-stock-accounting regulations
(not to mention the distinct possibility of an ERM-like currency agreement).
4) REGARDLESS of whether technically you're looking at a w3 or w5, OR A w5
which will re-number to a w3, you can play it technically by: a) using a
regression channel to capture the wave upside. Once that channel is broken,
stop out and sit on the sidelines...... then capture that RETRACEMENT in a
regression and/on moving average channel. Watch for pullback to fib area, a
bottoming in the oscillator, etc. as a sign the retracement is bottoming,
then RE-ENTER the position on the re-bound, putting your stop near the pivot
low. IF you were previously in a w3, with a PTI of 89, your w5 should be
extended to the upside, if it was previously a w5 and you're entering a
protracted downturn, your stop at the pivot low will help with risk.
5) One MAJOR thing to track is how the regional GROUP of indexes is
doing..... if you see on-going strength in Korea, Thailand, malaysia,
indonesia, hong kong, philippines, etc, then you can be pretty sure you've
got a good rebound, if the whole region is deteriorating, then the likelihood
is much less.
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