 |
| CME Group - Wolfe Waves, Daily Charts |
We also notice that the EPA line hasn't been breached yet, which possibly indicators that there is still some upward move left. The target price we look at is $82.34 - $85.11
CME Group - Wolfe Wave Example
Jotting this down for those who want to see how profitable Wolfe Waves can be. Below is the Wolfe Waves plotted for CME Group on the daily chart.
Notice how steep price has been moving once it left the 'sweet zone'. There was a test of the same region ($48 - $49) after which price practically zoomed up.
We also notice that the EPA line hasn't been breached yet, which possibly indicators that there is still some upward move left. The target price we look at is $82.34 - $85.11
We also notice that the EPA line hasn't been breached yet, which possibly indicators that there is still some upward move left. The target price we look at is $82.34 - $85.11
Wolfe Waves and Rectangles
I'll sum it up with this picture....
In response to my previous posts on using rectangles to measure Time in Wolfe Waves.
In response to my previous posts on using rectangles to measure Time in Wolfe Waves.
FB Trade - The Power of Wolfe Waves
On TradingView, I had published my analysis on Facebook, over a month ago, simply using Wolfe Waves. While there were times when I doubted my own analysis, as the trade progressed, the confidence returned. Yesterday's earnings announcement from FB did the job as price literally shot through the roof, taking out the target price of $32.56.
Click here to see how the trade played out.
I think the important point to stress here is the 'confidence' factor. If I recollect, there were instances when the fundamentals (in this case, investor questions) pointed negative. This could have rattled anyone who followed my recommendation. Notice how the BUY order was initiated on 10th June.. and immediately the next day, Reuters, reported this (Facebook tackles stock price complaints in first shareholder meeting).
From analyzing this trade, there are some clear points to note.
 |
| FACEBOOK BUY TRADE - WOLFE WAVES |
I think the important point to stress here is the 'confidence' factor. If I recollect, there were instances when the fundamentals (in this case, investor questions) pointed negative. This could have rattled anyone who followed my recommendation. Notice how the BUY order was initiated on 10th June.. and immediately the next day, Reuters, reported this (Facebook tackles stock price complaints in first shareholder meeting).
From analyzing this trade, there are some clear points to note.
- Notice how price left the 'sweet zone' (highlighted on the chart in maroon), price managed to build a firm base right at our entry price of $24.12
- ETA didn't work out. It does sometimes, and at times it doesn't. In this case, the ETA was supposed to be 18th June. We were off by close to a month and a week.
All in all, this was an amazing trade. Below are the first posts I made before taking up the long trade.
Now, we wait for Google to drop... follow the trade here.
Wolfe Waves and Rectangles - Updates
So its been a few days and this post serves as an update to how the concept is faring.
CADCHF
A minor adjustment was needed and the latest ETA shows 18th or 19th July as against the earlier ETA's of 17/18th July. Anyways, its only a day more so let's see how things shape up. This pair at the time of writing is trading at 0.9046... our target is 0.89 to be reached by 18th/19th.
Previous update on this pair can be found here.
My view so far... price is likely to reach the target, although personally I expected the target to be reached today on account of BoC press conference and rate statement.
CVX (Chevron)
Based on this experiment, we expect price to trade in the region of $110 - $113 in/around 19th August. Currently, price is still near the tops at $124.93.
Details on the experiment for CVX can be found here.
I did a bit more adjustments to this and came up with some new findings.
From the chart above, the key price levels/dates to keep in mind are:
Forgot to save the damned chart and no patience to go back and construct the Wolfe waves. Details here.
GOOG
Google is going to be a very interesting experiment. In regards to new developments for Google, I notice that price has been pretty much contained within $929.93 and points to a bearish drop. See chart below for details.
What's of concern is the ETA's don't quite add up.
For one, it seems like a price drop towards 838.98 - 829 by 19th July seems highly unlikely, unless they post some really bad earnings report. On the same note, WW shows us the EPA/ETA to be $807.64 by 25th August. Previous update for this pair is here.
CADCHF
A minor adjustment was needed and the latest ETA shows 18th or 19th July as against the earlier ETA's of 17/18th July. Anyways, its only a day more so let's see how things shape up. This pair at the time of writing is trading at 0.9046... our target is 0.89 to be reached by 18th/19th.
Previous update on this pair can be found here.
My view so far... price is likely to reach the target, although personally I expected the target to be reached today on account of BoC press conference and rate statement.
CVX (Chevron)
Based on this experiment, we expect price to trade in the region of $110 - $113 in/around 19th August. Currently, price is still near the tops at $124.93.
Details on the experiment for CVX can be found here.
 |
| CVX - Update, 17th July |
- $115.99 is the price point for WW3 and thus seems like the most likely price level to be hit
- $111.04 is our lowest target for completion of wave 5 and ideally should happen on or before 23rd August
- $130 - $133 is the likely target for the Wolfe Wave, which should be between 23/08 - 13/09
- The updated Wolfe Wave for Chevron also gives us the final price projection of $138 by 21st October 2013
Forgot to save the damned chart and no patience to go back and construct the Wolfe waves. Details here.
GOOG
Google is going to be a very interesting experiment. In regards to new developments for Google, I notice that price has been pretty much contained within $929.93 and points to a bearish drop. See chart below for details.
 |
| GOOG - Wolfe Waves, Updated 17th July |
For one, it seems like a price drop towards 838.98 - 829 by 19th July seems highly unlikely, unless they post some really bad earnings report. On the same note, WW shows us the EPA/ETA to be $807.64 by 25th August. Previous update for this pair is here.
Wolfe Waves - Rectangles, Follow Up CADCHF
This is a follow up to the analysis posted here, on 11th July. So far we have noticed that price has come out of the cloned rectangle from points 1 & 2. We infer that the peak has been formed and as such taking a short position is confirmed.
In terms of target price, we have 0.89049, with the estimated date for arrival at the price being 17th of 18th July. For now, we'll have to wait until next week to see how this plays out.
 |
| CADCHF - Follow Up Wolfe Waves |
Euro 2014 - The Mother of all Crisis?
No, this isn't about an unannounced Eurocup, but to do with more significant matters, namely the economy. In the chart below, I notice that there is a possibility of the Euro to hit $1.40 and there are worrying reasons behind this. While it might provide a good trading opportunity for the average speculator, the concerns that rise from this chart is quite worrisome.
For starters, if the current economic conditions prevail, we might soon start to experience stagflation.
The underlying economy continues to stagnate while inflation rises, reflected by the potential rally in the Euro. Here are some key points (... to lose sleep over)
Well, for starters, it would be quite difficult (to say the least) for exporters in the Eurozone to make a profit. Higher currency would translate to bigger costs for manufacturing and production thus making the goods less competitive in the international markets... Current economic conditions would push the Eurozone against the wall (so to speak). Higher currency rate v/s low interest rate isn't attractive to the investor even for the purpose of carry trade.. so we can expect to see a deficit in the current account as well.
If we look at interest rates, the ECB's mandate is currently to keep the interest rates at 0.5%. Sure, there is room for another 25 bps.. but will it be too little too less? And even if interest rates are dropped to 'zero' would it help the economy in anyway? It would in turn only push inflation even higher. Printing money, or quantitative easing won't help in anyway either.
For most part, I wish I was right, but this is one of those moments when I wish I am proved wrong!
 |
| EURUSD - 2014 Forecast |
The underlying economy continues to stagnate while inflation rises, reflected by the potential rally in the Euro. Here are some key points (... to lose sleep over)
- Draghi, unlike most of his counterparts hasn't yet embarked on an aggressive dovish policy. The recent ECB conference in July saw some 'forward guidance' but it seems to have come after a lot of push and shove.
- The ECB chief continues to talk about 'negative interest rates' but its only left to be seen.
- The 'whatever-it-takes' from the previous ECB conference (honestly, lost track of when it was) seems to be only words and no actions.
- Recent rhetoric from the Eurozone bloc voices the fact that the ECB is prepared to keep interest rates low for prolonged period of time. But I doubt if Interest Rates alone can be relied upon when it comes to improving the state of the economy... especially when there are a lot more countries involved.
- September is an important month for the Eurozone, with the German elections. All will be well if the incumbent, Ms. Merkel is elected to power... but what if?
- The 'what-if' is something that cannot be ignored. Recent economic data shows that even a behemoth like Germany is being dragged down with the rest of Europe. Italy/Spain/France... the less mentioned the better.
So what happens should the Euro hit $1.4?
Well, for starters, it would be quite difficult (to say the least) for exporters in the Eurozone to make a profit. Higher currency would translate to bigger costs for manufacturing and production thus making the goods less competitive in the international markets... Current economic conditions would push the Eurozone against the wall (so to speak). Higher currency rate v/s low interest rate isn't attractive to the investor even for the purpose of carry trade.. so we can expect to see a deficit in the current account as well.
ECB's Interest Rate Tool
If we look at interest rates, the ECB's mandate is currently to keep the interest rates at 0.5%. Sure, there is room for another 25 bps.. but will it be too little too less? And even if interest rates are dropped to 'zero' would it help the economy in anyway? It would in turn only push inflation even higher. Printing money, or quantitative easing won't help in anyway either.
For most part, I wish I was right, but this is one of those moments when I wish I am proved wrong!
Wolfe Wave - Rectangles - Experiment 3
Here's an ongoing experiment for CVX (Chevron) shares. I've been monitoring this stock for quite a while. The chart below shows a complete analysis of CVX and likely price projections.
At the moment, we are at Point 4. Traditionally its considered risky to trade this wave and such apply caution.
What we're looking at is for price/time. From the rectangles, we expect the lowest price to be $110.26 and the price should move out of this zone by 19th August, 2013.
I've made use of Fibs to divide this rectangle. The 23.6% and 38.2% levels can be ignored because they form well inside the triangle. The key levels to monitor would be $117.45, $115.75 and $113.02.
Traders could either go short with the above target levels or go long from the above 3 price points.
On the upside, riding the Wolfe Wave, gives us a projection price levels of $129.12, $129.76, $131.01 all of which should happen before 3rd September 2013.
Once again.. fingers crossed and let's see how this plays out.
 |
| CVX - Wolfe Waves |
What we're looking at is for price/time. From the rectangles, we expect the lowest price to be $110.26 and the price should move out of this zone by 19th August, 2013.
I've made use of Fibs to divide this rectangle. The 23.6% and 38.2% levels can be ignored because they form well inside the triangle. The key levels to monitor would be $117.45, $115.75 and $113.02.
Traders could either go short with the above target levels or go long from the above 3 price points.
On the upside, riding the Wolfe Wave, gives us a projection price levels of $129.12, $129.76, $131.01 all of which should happen before 3rd September 2013.
Once again.. fingers crossed and let's see how this plays out.
Wolfe Wave - Rectangles - Experiment 2
In this experiment, we'll look at USDCAD Pair.
From the chart below, it is obvious that price failed to touch the peak of 1.08193. However, we cannot assume that price has started a downward trend. As long as price is still in the rectangle, we have to assume the underlying theme, which is a probable price move towards 1.08193. Our ETA for price to come out of this rectangle is 23rd August.
Our target price is projected at 0.9683 which is expected to reach around 30th of September.
For now, we'll have to wait and watch.
 |
| USDCAD - Wolfe Wave Experiment |
From the chart below, it is obvious that price failed to touch the peak of 1.08193. However, we cannot assume that price has started a downward trend. As long as price is still in the rectangle, we have to assume the underlying theme, which is a probable price move towards 1.08193. Our ETA for price to come out of this rectangle is 23rd August.
Our target price is projected at 0.9683 which is expected to reach around 30th of September.
For now, we'll have to wait and watch.
Wolfe Wave - Rectangles - Experiment 1
Let's take a live example of Google Stock. I had previously predicted shorting Google. Let's see how it works by using rectangles in Wolfe Waves.
So what do we infer from this?
Firstly, price hasn't yet reached 937.42. However, note that the rectangle also tell us the time constraints. So if Google's share price doesn't peak 937.42 before 12th of July, we can expect to see a drop.
The second rectangle shows us that the lowest price Google can go to is 817.32 and this should happen on or before 18th July.
 |
| Wolfe Wave Experiment, GOOG |
So what do we infer from this?
Firstly, price hasn't yet reached 937.42. However, note that the rectangle also tell us the time constraints. So if Google's share price doesn't peak 937.42 before 12th of July, we can expect to see a drop.
The second rectangle shows us that the lowest price Google can go to is 817.32 and this should happen on or before 18th July.
Wolfe Waves - Tweaking the methodology
It is common knowledge that Wolfe Waves is used for trading reversal price points. However, there is a bit of subjectivity involved. Realistically speaking, a trader might either take a position a bit too early or perhaps a bit too late. Trying to get into the trade at the right time is perhaps what we all would like to achieve.
In my search for figuring the Wolfe waves, I came across this rather simple solution of using Rectangles.
In the picture below, I first plotted the Wolfe waves (bearish), including cloning TL 2 - 4 and projecting this from Point 3. This TL projection gives us the possible area of reversal for Wave 5. However, if we go simply by the projection, the reversal could happen anywhere.
Now I introduce a rectangle, from Point 1 - 2. This rectangle basically covers the pip distance and time as well. Cloning this rectangle and projecting it from Point 4, gives us a better estimate of the pip distance that will be traveled for Wave 5.
Finally, cloning this rectangle from the end of the previously cloned rectangle should give us a possible idea. In this case for CADCHF, I expect price t reach 0.88765 around 18th of July.
Let's see if this works.
In my search for figuring the Wolfe waves, I came across this rather simple solution of using Rectangles.
In the picture below, I first plotted the Wolfe waves (bearish), including cloning TL 2 - 4 and projecting this from Point 3. This TL projection gives us the possible area of reversal for Wave 5. However, if we go simply by the projection, the reversal could happen anywhere.
 |
| Wolfe Waves - CADCHF, with Rectangle |
Calculating End of Wave 5
While I am not completely sure about this, to calculate the potential move for the Wolfe Wave, I now plot a rectangle between points 3 - 4, but this time taking into account the complete price move, i.e: if price between 2 and 4 is lower we take that into consideration as well.Finally, cloning this rectangle from the end of the previously cloned rectangle should give us a possible idea. In this case for CADCHF, I expect price t reach 0.88765 around 18th of July.
Let's see if this works.
USDCAD - What could possibly be causing this Short?
The daily charts for USDCAD paint an interesting picture from a Wolfe Wave perspective. If going by the current conditions, (a strong Greenback), the USDCAD seems to have run its course with a possible decline (and one that is large) seems to be just around the corner.
I have made a post about this on SeekingAlpha blog. You can find it here.
I have made a post about this on SeekingAlpha blog. You can find it here.
Playing Chevron with Wolfe Waves
Its very rare when a trader would actually get the real meaning of the market prices. In this post, which is purely experimental, I want to put Wolfe Wave to the test with Chevron.
Currently, prices show a Wolfe Wave triangle in formation with points 1, 2, 3 being formed. Conventional wisdom says not to trade Wolfe Waves before Wave 4 is formed and we stick to that. But by going ahead with our projections, it would be nice to see how price is going to play out.
Key points
And here's the analysis playing out....
 |
| CVX - Wolfe Waves |
Key points
- Expecting a reversal at 124.18, around July 12th.
- Look to EMA's for possible clues on price reversals
- Expect the sell off to push price to $111.86 - $109.98
- A bullish move likely from the above regions possibly shooting above $127.42
- This bullish reversal's price point is likely to be $133, with ETA around 17th September
And here's the analysis playing out....
Shorting Google - Wolfe Waves
Its the earnings season and a time where stocks and make some big moves. I've been watching Google for quite a while. In the chart below, we see a bearish wolfe wave being formed. At this point in time, I expect price to drop to the region of 802.5 towards August 2nd, 2013.
There is a bit of risk though because the upside move shows a possible room to 920, if not more. To put it plainly, we'll have to wait for Google to reach the sweet spot between 950 - 920.55 before we can think of any continued sell off.
For now, its going to be a wait and watch game. Of course, I haven't looked at any fundamentals, so this trade as always is purely technical.
 |
For now, its going to be a wait and watch game. Of course, I haven't looked at any fundamentals, so this trade as always is purely technical.
Wolfe Wave - Google, Short by justatrader on TradingView.com
Subscribe to:
Posts (Atom)