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"VPHM hasn't given up the fight and currently is between hither and yon: above 11.60 support, but below the wedge, so hold all paramutual betting tickets. LOL."
VPHM has bounced off 11.60 this morning for a QUINTUPLE bottom in the 11.60 - 11.63 area. The pattern is a Descending Triangle. The majority of those resolve to the downside, but continue to hold all paramutual betting tickets. LOL.
2 comments:
Hi Melf,
Did we just complete a Wolf Wave on the SPX today on the 15 min chart?
If I'm reading it correctly, wave 1 of the Wolf bottomed on the morning of the 17th. Wave 4 topped this morning. Wave 5 extended below the lower trendline at the close today.
If this is a Wolf setup, then drawing a line from the end of wave 1 thru the end of wave 4 gives a target of 870 to 880 for tomorrow.
When you're doing Wolves, how much throw-over do you allow (how far beyond the trendline can wave 5 go), and how do you place stops to allow for that?
Thanks much!
Greg
PS If it's easier to email me, you can reach me at gkesselr@whidbey.com
Greg,
You get an A+ and a star on your forehead for that analysis. LOL.
(When you're doing Wolves, how much throw-over do you allow (how far beyond the trendline can wave 5go),
There isn't any rule about how far the Wave 5 fakeout can go below the Wolfe Wave pattern. As I see it, it's best to wait until price rallies off a Wave 5 fakeout low and gets back to the bottom of the pattern, per my entry into the UYG at 9.52, just about smack on the bottom of the pattern.
(and how do you place stops to allow for that?)
I'd stop it out below whatever low was made, prior to price getting back to the bottom, or getting back inside, the Wolfe Wave pattern. But, that very much depends on how much risk I've got to take.
For example, in my UYG trade, it rallied from my 6.52 entry to 7.50 at the close that day. The Wave 5 low was 5.76. If I used that for a stop, that would have been a loss of 11.8%, which was more risk than I wanted. After the rally to 7.50, my feeling was that if I saw the bottom of the Wolfe Wave get broken to the downside AGAIN, I was going to lose interest real fast.
When I saw it break down again below 6.50 and started seeing prints in the 6.30's that was enough for me. Wolfe Waves are supposed to be VERY bullish (or bearish). That didn't look bullish, so I sold the UYG and took a small hit of 3%. At yesterday's close of 4.63 in the UYG, that would have been a HUGE hit (a loss of 29% as of the close), which emphasizes the importance of managing the risk, by using stops.
UYG lately = UGH! LOL.
I'll post the possible Wolfe Wave in the SPX before the open. Good luck, Greg, and nice job identifying this possibility. I was watching it yesterday, too.
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