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The chart below outlines all the trades announced in the forum and chatroom in realtime last week. From last Friday to this Wednesday, the market had been stuck in a range that whipsawed many traders who were simply looking to play the breakout. We instead found all the setups below which allowed members to take advantage of a market environment that’s become nothing short of a trader’s paradise. Adding up all the swings, we produced a gain of just shy of 100 points, unbelievable profits while trading within a range. 
Make no mistake, simple analysis of an S&P chart reveals that most traders were on the wrong side of the market again as it set up the trap door on Tuesday and Wednesday. The surge in the last two days of the week was not traders going portfolio shopping, but bears forced out of the market by margin clerks. If they were members at TTC they would have been alerted to very important turns since last Friday, along with many intraday moves. Last Friday's idea was to buy the open as we thought the move down was corrective and we also knew that some large houses were buying in the pit. Tuesday's drop setup a potential 2-5 point loss to take a shot at a 50-100 point gain. You can do the math for yourself, but we saw it as risk/reward trade we needed to take. As it happened, any swing trader that took that trade and is still long has a gain of close to 50 points in three days! This raises the question why I was the only one that I know of to see that huge risk/reward trade using the Elliott Wave principle when there’s so many who claim to use this discipline? Only one answer comes to mind, and it’s that most aren't using "unbiased" Elliott Wave. It’s not just our proprietary indicators, our unique blend of market indicators, our weekly maps, daily forums, or realtime chatroom – it’s our commitment to unemotional trading based on the setups given by the market instead of predetermined sentiment or predictions that make TTC a highly profitable trader’s paradise. But everything else helps, too! The way we played the week was to buy 1507 into Tuesday’s close, and again at 1504 in the globex session. After that, buyers decided to understand the setup and began to bid up the market overnight. By the time we got up in the morning the Futures were already up to 1514. We then rallied most of the morning and started to pull back ahead of the 2:00 report, which some were expecting to use as an excuse to turn the market lower. We placed our buys at 1513 that afternoon and our longs were triggered as the futures made a low into 1512.50. From there, staying long was easy with price exploding upward. That didn't stop bearish traders from pushing their wave 2 targets higher in the face of an obviously impulsive move. Of course, Friday’s gap trapped all the foolish traders harboring those silly thoughts. In last week’s update I discussed that we had bought the June 8th lows at the opening bell in part because the trading community had again become too bearish. The updated chart below shows the March low (#1) in relation to the most recent low (#2), clearly displaying the spike in bearishness as formulated by the ISEE. As you can tell, the mood of option players had swung wildly the other way by Friday’s close (#3), really in only one week’s time. I don't think we’ve reached a level you could call capitulation, but we look close. 
This confirmation from the sentiment indicator lines up perfectly with my current Elliott Wave work. Actually, it’s a needed ingredient for which I’ve been waiting patiently. We’ve been bullish while many other have been extremely bearish, and I believe we can see a time in the near future where that situation reverses. In fact, I invite bearish traders and analysts of the last five years to become bullish as I start taking the moth balls off my bear suit. I think we’ll see that day come, and with it, an important turn. Looking forward This week’s action has left two obvious gaps in the S&P futures which make the first question whether a third one is needed to complete the three gap play. With Friday’s gap, w Weeks ago I stated; “So, we’re going into the next few weeks with a plan and are looking forward to seeing it realized. On the contrary, most traders will probably be in for a few weeks of very frustrating trading before the final curtain falls on this rally.”[/i] This week proves us 100% correct on that statement! Gold Despite the broad market rally, gold and silver failed to close above their 5-day moving averages, the key level watched by Joe’s Precious Points update in recent weeks. This obvious resistance level will be the first obstacle to a sustained rally, followed by even stronger resistance further overhead if it’s breached. Be sure to read the rest of Joe’s weekly article for more on precious metals. Proprietary Trend charts My trend charts continue to not only confirm each week’s moves, but lead the way. In a week that we had the lows almost give up on Tuesday, and most traders worried about PPI, CPI , and every other report on the calendar keeping us out of the game, the trend charts simply said to BUY. That proof is on the charts below of the Dax. The S&P trend charts gave the same results. 
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analysts are always welcome to contribute to the Forum or newsletter. Ideas from this update are provided as general information and are not investment recommendations. TTC accepts no liability whatsoever for any losses resulting from action you may take based on the contents of its charts, commentaries, or price data. Each person must do his or her own research to determine the appropriateness of taking a position in any financial or commodity market. If you are uncertain, please check with your licensed financial advisor or broker prior to taking any action. Securities and commodities markets inherently involve risk. CONTACT
INFORMATION The opinions of FSU contributors do not necessarily reflect those of Financial Sense. |
