Wolfe strikes again!

Great start to the morning. 3 Handles brought to you by Mr. Wolfe.

Tweeted an opportunity

Look how it turned out.

Update: Bold Predictions

In the post on Bold predictions, I was tracking a Wolfe wave and corrective moves on SPY based on fib relationship. So, how did it go?

Not exactly as I planned! I mean, we got a dip in the morning and all and I posted a chart in the morning where I thought we may have finished the wave but I did not buy it myself.

 

 

However, after adjusting the chart for yesterday's move, I get better fib ratios. So, as charted below, will the Case Schiller reading disappoint? It's up at 9:00am EST and the market opens 9:30am EST.

 

 





Update: Divergence on the hourly

So, how did the divergence pan out so far? The ellipse at the bottom shows what happened on Friday after we have divergence hinting a move up. That is quite a few handles!

The previous post that about the pending move is here.

Divergence on the hourly

Good morning. Another divergence on the hourly. On Friday, the divergence lead to a big upside. Will this divergence do the same to the downside?

This time, the divergence is against the predominant trend. Don't expect miracles! If you check my other post from Saturday, I am expecting some weakness in the morning but if it pans out as I mentioned in the 'Bold Prediction', then I will be a buyer in the morning dip.

Another Shot? Maybe not

In the previous post I presented a possible Wolfe wave. I am no expert and I did present some misgivings. I have not read anywhere on the net that the extension ratios have to be same on both the legs (3 and 5). In that post, 3 is 127 extension of 1 and 5 is 162 extension of 3. I was asked to chart Wolfe wave on IWM which brough me to an interesting observation. One that potentially blows away the previous count.

It appears that a similar pattern presented itself on IWM a few weeks ago. Leg 3 was 127 of 1 and 5 was 162 of 3. It failed as shown below.

So, what of the 'Another shot'? All I have is this one example of failure right now. If I dig more, I may find more such examples. Either this means that we cannot mix ratios or that Wolfe waves can fail (Oh! the tragedy).

BTW, it did seem to work (pretty close) later on another setup. Note that 5 is 100 extension of 3 and not 127 or 162, the only mentioned extensions on the web. Is this even a legitimate Wolfe wave? I don't know.

Trade carefully!

Another shot at Wolfe

A couple of weeks ago, I was tracking a Wolfe wave that would have taken us down quite a bit. It did not pan out (marked on chart). We are close to another opportunity now. I have some misgivings as I noted on the chart. This setup is void if we blow well past 143.51.

Without further ado, here is the chart. 133 is also the 61.8 retrace of this move up since June.

In an earlier post I had used different peaks for measurement and the target was different (more ominous). I do not like the numbers, especially that 127.2 fib at 3 is not quite up to the mark. I post it anyway as I have no way of saying that it will not pan out at all.

127 is right where we started in June.

Bold Predictions

Long time ago, I gave up my abilities to predict anything but what my most short-term indicators suggested. I am talking in minutes here.

Once in a while I do like to venture into the big 'prediction' world where the time horizon stretches into hours or maybe even days. I have a post on my thoughts on a very long (weekly/yearly) time horizon.

This weekend, I have a chart that spans 1 day of moves for SPY. A few things lined up that made me bold enough to put this chart out.
1. I use a special indicator that is indicating a downward pressure on the daily SPY chart but enough volatility/chop for 2-3 days.
2. The fib ratios presented in the chart occur more frequently in my recollection. ABC moves typically have 23.6, 76.4 and 61.8 fib relationships amongst various waves, especially in the form I show.
3. There is a good setup of Wolfe wave which has become my favorite
4. The Wolfe wave jives with the fib ratios of ABC moves.
5. AAPL got awarded a billion dollars after market close on Friday that should bouy the market at least till the open.
6. Institutions seem to want to sell as much as they can without bringing the prices down. I guess they will sell into the AAPL euphoria.

Now, none of this may come true and Monday morning will be a tell. This chart is almost ouf the window if we go lower than where I have marked 4 by quite a bit. But there is a chance so here goes.


Bold Predictions:
1. We gap up Monday to the 61.8 fib retrace of 8/21 to 8/23 down move labelled as WXY. This area is in blue. It also happens to be a great spot for the 5 of the Wolfe wave. I am guessing we will be there in the early part of the day. This also serves as the 'A' leg of the ABC retrace to the upside. SPY target for A is around 142.
2. The Wolfe wave line meets the 23.6 fib retrace in the crimson area. This would be a good spot for B to stop. It also happens that B = 61.8 fib retrace of A at this spot. B should be around 140.90 or thereabouts.
3. From there C starts its move up to finish off at 76.4 fib of the WXY wave which is around 142.40.
4. It goes down again and either stops at Y or lower to finish the correction over the next 2-3 days giving my special indicator time to finish off with the downward pressure on the daily SPY chart.

I will be keenly following the progress and will update the charts with what I see.