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Lenny
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To: graintrader@xxxxxxxxxxxxxxx
Subject: Re: [graintrader] Beans
From: ROSOW@xxxxxxx
Date: Mon, 23 Jul 2001 23:30:22 EDT
Full-name: ROSOW
Scott,
I think I'll come out & play on your request. With the use of GET,
E-wave and some Fib #'s here's what I see on S01Q. Now be gentle, I'm still
learning!:
1) Take a look at the Elliott Oscillator at the 538 top. No divergence which
indicates to me that the recent high is a Wave 3 not a Wave 5. I also ran an
161.8% extension of Wave 1 from the bottom of Wave 2. The high of 538 took
out this extension with room to spare which leads me to believe that we have
just witnessed a Wave 3 not a Wave C. Price blew right through the 100%
extension which is the norm for a Wave C.
2) O.K. now that I've hypothesized that a Wave 3 is complete it's time to
determine Wave 4 targets. The first thing I measure for a Wave 4 is the 38.2%
extension of Wave 3 in TIME. I won't consider a Wave 4 complete before this
minimum time constraint. 07/24 is the date for beans. I then run the
retracements of Waves 1-3 and Wave 3 to come up with Wave 4 target areas. In
this case the price clusters are at 490 5/8 - 493 1/4 then 479 1/2 and
finally 463 1/2 - 465 3/4. The first target was just about reached both
yesterday and today with today's bar being a Reversal Day (RD)/Inside Day and
the completion of a Tweezer bottom. With that being said, I believe only
Wave A:4 is complete: >)
3) Shown on the chart is GET's proprietary indicator, the Short & Normal
Ellipses. I have seen MANY times the Short term Ellipse catch a TEMPORARY low
i.e. Wave A:4, at a significant fib level. In this case the 38.2% retracement
of Waves 1-3. Because of this I expect a short term rise back up towards 538.
The (3) retracement levels to look at are 516 then 521 1/8 and finally 528
1/2. Since it is a Wave B I would expect a minimum retracement of at least
50% so 516 would be my minimum 2-3 day target. This should be followed by one
more move down towards the 479 1/2 target. Also note that a gap needs to be
filled between 522 1/2 & 525 1/2 so I wouldn't be surprised to see a deep
Wave B retracement back into that area. One more thing, the Elliott
Oscillator normally heads towards 0 in a Wave 4 retracement. At this point
it's not even close which is another reason why I believe Wave 4 is not
complete.
4) One last thing before I move on to the next post w/ a 60 minute chart for
tighter entry. I always look at the 14 period RSI. From Andrew Cardwell I
have learned to gage trends by using this indicator. In simple terms if you
see the RSI running between 40 - 80 then you're likely to be in a nice
uptrend. On the other hand if it runs between 20 - 60 then a downtrend is in
progress. Oscillations between 40-60 is trading range territory. A good sign
of a CIT would be this scenario. A market has been moving in an uptrend with
the RSI14 running between 40-80. Watch out when the RSI bounces off of 40,
moves up to 60 but can't break through. Odds are the trend is running out of
steam and a CIT is in the cards. As for beans the RSI held 40 on all
retracements since April 26th, the day it broke 40, and has broken 60 twice
without stalling. If my current scenario is correct then 40 should hold this
Wave 4 retracement.
I'll send a quick follow up post with a 60 minute chart for entry & stop loss.
Scott, now aren't you glad you asked (ggg)
Lenny
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