Elliott Wave Index Trader: Wave 3 extended

Wednesday, September 15, 2010

Wave 3 extended

Well, what looked like a good setup for wave 4 never materialized as we never tested the 34 SMA. Instead, I'm labeling as a subdivided wave 4 flat. I'm looking for another test of the high tomorrow for our wave 3 and then a 20-25 pt wave 4.

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My Trading Portfolio Performance

Well, I finally went through the numbers for 2009. To put it midly I had the results one would expect when you try and short one of the biggest bull runs in history in terms of % gains over a 9+ month run nearly straight up. My big losses came from 3 areas:

March 2009 - I was up substantially and didn't honor my stop loss as I was expecting a retest of the lows and even added to my short position in that expectation. You know what happened: no retest.

June 2009 - I was nearly perfect in my entry on this short position but my profit target of 38.2% retracement never got close as the market gave the great head & shoulders break fake and reversed hard.

September 2009 - October 2009: The market gave a consistent head fake during each of these months with sharp sell offs that were completely retraced.

In the end I wiped out all my gains from 2008 and am back in the hole. Lessons learned: you can anticipate market action all you want but it is safer to enter on price confirmation than using the freight train method (stand in front and pray you don't get run over!). We'll see what 2010 brings, but I'm confident that with patience I'll get it back again, but this next time I don't plan on losing it again ;-). Best of Luck!

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The results for 2008 are in and my final #s were 163.6% return. That is actually a big disappointment for me since December decimated my annual returns. I was closer to 300% at one point in December. May 2009 be a better trading year for everyone!

Long-Term Market View

I am a firm believer that the market completed, in Elliott terms, a Grand Supercycle at the end of 2000 or 2007 depending on the count, but it matters little as they both had near the same nominal price and eventual wealth destruction will be just as great.

As the US economy has been built up on a massive credit boom over the last few decades, this grand supercycle correction will be deflationary in nature and will destroy more wealth than the great depression (which was a supercycle correction). But since the bear market that began in 1929 was also deflationary, I think it is still a good model to work from.

Here's an interesting chart showing the '29 Bear Market. I currently believe we are nearing the end of point 6 on that chart. Point 7 will probably top out around SPX 1050 and that should be everyone's exit point from the market if they are conservative (i.e. retirement accounts).

Elliott Wave Index Trader

Wednesday, September 15, 2010

Wave 3 extended

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Elliott Wave Index Trader

Wednesday, September 15, 2010

Wave 3 extended

Subscribe To

My Automated System

Elliott Wave Basics

EW Labeling

ARCHIVES

The Really Big Picture

My Trading Portfolio Performance

Who I Read Most

My Wave Count from 2007

Long-Term Market View

Followers

About Me