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Re: [RT] Another failed WolfeWave in WTLC

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 Thanks for your hints and advices, Don. Much appreciated. From a non-Wolfe-perspective of course I can see that the leg e.g. in the WTLC-chart I posted the other day would not turn up at what was supposed to be the WW-point 5. I already confessed that I got hooked on the approach after reading Bill Wolfe's statement that "the Wolfe Wave is a "stand alone" methodology." [in the FAQ of his web-page]. In his book his auto-promotion and advertisement continues. Just a few quotations:

[]
p. 3

[]
p. 7

[]
p. 8

And Linda Raschke makes one belief:
[]

etc., etc.

However, apllied to real-world-markets and conditions all the above glorification is clearly NOT the case. WWs are tricky, and hence IMHO they should NOT be considered a "stand alone methology".

Best regards

Georg
 

At 06:25 AM 09/19/2006, you wrote:
Georg,
I have been trading Wolfe Waves on and off for some time.  Actually Earl and I have corresponded about the pattern from time to time and have traded "potential setups" when we see them. 
 
Several things other I would caution you on.
 
1. Trying to trade the pattern "right " off a "possible top in the direction you are showing.  In other words it would have been better to look for the pattern that would have caused a reversal back down, not one back up.
 
2. I think Earl's prior comment that one should look for potential point #5 reversals being near a normal swing (a 1.0 fib occurred roughly at your point #3, not  your point #5), or off an EW count (we are clearly in wave w3:W3 down off the high and not even close to a 1.618 minimum of a W1/W2 retrace).
 
3.Attached is a gif of the ideal setup off the Wolfe Wave website (not affiliated).  Notice the comment sometimes the point #5 exceeds the trendline from point #1 to point #3.  This is a must for me, and I want to see it exceed that trendline, then come back through it.  I then place my stop at the nearest prior low (or high of the previous bar). 
 
In your case,  I see the reversal occurred (somewhat after the up arrow you showed) but did pass back the trendline so a trade would have been activated, however items #1 and #2 above were not met.  I see no good Wolfe Wave setup here?
Don Ewers
 
----- Original Message -----
From: Georg Mayer
To: realtraders@xxxxxxxxxxxxxxx
Sent: Friday, September 15, 2006 12:45 AM
Subject: [RT] Another failed WolfeWave in WTLC

Good Morning:

I'm new here and hence first want to thank Bob for inviting me to RTs. Also thanks to Kate and Earl - apparently the WolfeWaves-doyen here - for their recent help and comments on my questions and charts. As you are well aware, I am not an expert in the matter at all, but have just started studying it in order to verify or to soon discard this approach. Here's another example favouring the latter:

More comments and ideas are much appreciated.

Nice day

Georg
From: EAdamy
Sent: Thursday, September 14, 2006 9:30 AM
Subject: RE: Fw: [RT] Wolfe Waves

My concerns regarding this particular WW pattern (as shown in Georg's chart) are two-fold and have been expressed previously. First, the #5 failed to follow-through on the first decline after rising above the upper TL following #4. Second, triangle patterns seem to have a high right of failure when price gets too close to the apex of the triangle. I think it began getting too close when the first decline above the upper TL failed to follow-through.
 
I am not familiar with the 1/4 steps and the boxes don't seem to be marked into quarters.
 
Earl
At 06:53 PM 09/13/2006, you wrote:

----- Original Message -----
From: EAdamy
To: realtraders@xxxxxxxxxxxxxxx
Sent: Wednesday, September 13, 2006 8:42 AM
Subject: RE: [RT] Wolfe Waves

As I suspected, point #3 on the ES was too shallow for the trendline at point #5 to offer any resistance. #3 on the NQ gave us a steeper line which offered a slight retracement at point #5, however point #4 failed to pull back into the body to a point below #1. Probably need a 162% retracement of #1-#2 at point #3 and a 50% retracement of #2-#3 at point #4. The wide swings required should be an indication of a blow-off in progress.
Finally, my golden rule is to never, ever trade against the tape when the AD volume ratio ((AD up - AD down) / (AD up + AD down)) on both NYSE and NASDAQ are running above 0.50.
Earl
 
-----Original Message-----
From: realtraders@xxxxxxxxxxxxxxx [ mailto:realtraders@xxxxxxxxxxxxxxx]On Behalf Of EAdamy
Sent: Tuesday, September 12, 2006 9:12 AM
To: realtraders@xxxxxxxxxxxxxxx
Subject: RE: [RT] Wolfe Waves
This is a tale of two Wolfe Waves. All charts are 15 minute. Upper left is ES ... note the slope of the upper line which is so shallow that it fails to catch the really significant reversal retracements at 162% and 200% ... it will clearly have to exceed the upper line by quite a bit to reach the 1320 potential reversal area. Lower left is NQ ... note the slope of the upper line which is steep enough to catch the significant reversal retracement area around 1624 without a huge run above the upper line. On the right we have AD volume oscillators which are running overwhelmingly bullish. In my view, the NQ WW is far more likely to work.
Conclusion ... I believe it is important to have a fairly steep upper line in order for the WW to hit the extreme retracement zone required to offer a low-risk reversal. Let's see how it works out.
Earl
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