FractalTrader

FractalTrader Updated 

Sometimes breakout trades fail. I wanted to post this as a very recent example of a failed trade, since that's part of reality. You can be wrong and still succeed, the critical thing is to avoid large losses. This trade was a falling wedge, and I decided to try to take a long on a break of the falling trendline. To properly manage risk, I try to make sure I'm...

FractalTrader

See the next chart IWM led the market lower last week, and it has current probed into a support zone. On the other hand, to say traders are bearish is the understatement of the century as a look at the equity put/call ratio easily shows. This is a contrarian indicator when it is so heavily skewed in one direction. In summary, technicals seem to give some...

FractalTrader

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FractalTrader

First, here is how I see the current uptrend unfolding. The point of this post is to show my thought process. It's not to predict either a top or a bottom here, but merely to point out the current probabilities based on the pattern. The fact that the variations of the count on 4H have opposite implications on direction mean it's not worth risking money here...

FractalTrader Updated 

A break below the prior low, followed by a break back above the wedge is where I see the best R/R.

FractalTrader Updated 

Should price move below the pivot low of 35.94, without making a new high, this short setup will be valid. Price should retrace at least the entire wedge, but more likely the entire move from 31.

FractalTrader Updated 

To complete the pattern, price needs to complete wave d and wave e. The long will trigger on a subsequent move back above d. The initial stop would be placed below the low of wave c, as a move below that invalidates the pattern. This will probably take 2-4 wks to play out.

FractalTrader

NFLX is finally showing signs of life again after a very underwhelming 2016. After consolidating in a triangle formation, it has broken out to the upside, and is now showing signs of breakout confirmation.

FractalTrader Updated 

We can see a clear extended 3rd wave, and what appears to be a developing extended wave 5 now. The ABC corrective pattern is likely off the table (you can make a wxy argument, but odds do not favor it with such a small X), as is a completed impulse. We know wave 3 cannot be the shortest wave in a valid impulse wave so 222 should be the limit of travel for this...

FractalTrader

While DIA is making new highs, I thought I'd look at IWM to see how the small cap stocks are faring. Standard TA shows a potential bull flag well underway here. Meanwhile a possible EW count that fits with that bull scenario shows a subwave 4 of 3. The main problems I see with the bull thesis, as far as IWM is concerned, are two-fold: 1. The 2 main waves up are...

FractalTrader

My initial target for a 4th wave correction was below 114.62, but the flat correction that has been unfolding since the 2/11 high of 120.94 appears to be nearly complete. Gold is a commodity, so the 5th wave should be strong, if not the strongest of the 5 waves in the impulse.

FractalTrader

Despite the impressive 5 straight week rally, this is still a risk-off environment, so I'm considering it a counter-trend rally in the context of a bear market. Bias is neutral for now, since the recent trend is still up, but caution is recommended.

FractalTrader

the 1960 level I've been waiting a month for has finally been reached. there is a series of ABC's in a converging formation, creating what is likely a diagonal C wave on the bigger picture. The 3 horizontal red lines are the levels I'll be watching for a reversal confirmation. Each successive one provides higher confidence in the turn. My bias is to the short...

FractalTrader

Elliott wave ABC flat correction could be completed in the 1947.5 - 1960 area, after which the downtrend including new lows would likely resume. As always, there are other pattern variations that could play out, but the implications of this particular pattern has enough significance to keep and open mind and be ready for it.

FractalTrader

First, on the bearish front: The channel that has been in force since October 2011, which marked the largest correction since the 2008 bear market, is clearly broken. Neither money flow, nor momentum are showing the capacity to make new highs on this retest. In fact the retest is seemingly unable to even stay above the lower channel, making this a possible...

FractalTrader

I'm looking for it to find support around 70. Five waves up from the 2012 low defines a new bull market.

FractalTrader

A 76.4% retrace of the prior five wave advance, which unfolded in a complex WXY pattern, points at a high likelihood that 128.76 is exceeded intermediate term. Also note that the prior descending channel, is most definitely broken at this point. Those married to news are worried about a rate hike, but the chart seems to say that treasuries will trade higher.

FractalTrader

Unless we get another leg down on the 4H chart, this correction remains a simple ABC corrective pattern. Five waves down, of course, sets the stage for a confirmed trend change. Shorter term, the 1H chart shows a potential ABC up, unless it makes another high here prior to heading back toward the lows. The count, as I have them here, shows a move back to the...