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Don't know if this will help, but Wheat had a similar setup to C(orn) which
I was long. The previous low/high pivot pair (5/3 217 to 5/4 224) had a
range of 7 points. Using the 217 1/4 pivot low on 5/7, the 100% (7 point)
and 162% (11 1/4) Fibonacci high projections for the next impulse were 224
1/4 and 228 1/2. Generally, when the second pivot low is so close to the
first pivot low, a viable second impulse must be 162% or more - this is
basic EW theory which says that the second impulse wave (wave 3) should not
retrace into the range of the first impulse wave (wave 1). Corn reached the
100% projection and began consolidating back and forth across the 100%
level. Knowing that it needed to continue on without a major retracement, to
be a viable impulse, I began tightening my stop into the congestion. I
tightened it for the last time this morning with a stop at the 38%
retracement level just under the lowest intraday bar in the congestion. When
Corn finally gave up and began falling, it quickly retraced 62% by the time
it closed and it may very well see more to the downside. This simple
technique allowed me to exit the trade with a modest profit leaving me
mentally clear to consider a setup for a possible short sale.
Anyone interested in further exploration of these techniques might have a
look at Robert Miner's book Dynamic Trading (not in bookstores - see
www.dynamictraders.com), Joe DiNapoli's book DiNapoli Levels (available book
stores), or any concise, basic texts on Fibonacci retracements/projections
and Elliott Wave. This stuff is not rocket science and it doesn't take high
dollar software and Cray computers to do. The attached chart was prepared
using QCharts (www.quote.com) at $80 + exchange fees.
Earl
----- Original Message -----
From: BrentinUtahsDixie <brente@xxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Sent: Friday, May 14, 1999 4:33 PM
Subject: Re: sp 500 RANGE for tomorrow
> Speaking of probabilities. I learned a little lesson today. I thought that
> wheat would "probably" retrace by 50% it's last run. However, wheat hit an
> air pocket today and tanked for 10 points which made my wheat call do
> likewise. Fortunately early on I bought a cheap put in the front month
that
> cut my losses in half. Yes it would have been great to have sold wheat
today
> but more risky then my tolerance will allow.
Attachment Converted: "c:\eudora\attach\C_JULY.gif"
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