Swing Trading The Russell 2000 and a look at a descending triangle on a Gold Chart
If you look at last weeks article Swing Trade Chart Patterns Like The Pros, you’ll notice how I mentioned on the hourly chart that there would be a pivot point slated for July 23. The actual pivot point was on July 24, not bad for forecasting, I would prefer better, but to forecast a pivot point day within a day or so is still better than most, if not all of the forecasters out there. In last weeks post I mentioned that the pivot point after that was slated for August 2. The chart above is a daily chart rather than an hourly chart just to show you a slightly bigger picture. In order to time the pivot point down to the hour you need to look at the chart patterns and be able to count the Elliott Wave Patterns as you narrow the time down with 30 minute, 15 minute, 10 minute, 5 minute and last but least the 1 minute chart. If your trading currencies you can even go down to the tick.
Russell 2000 daily pivot point August 15th, 2012
The chart above shows a wider view of the Russell 2000 daily chart. Last weeks post I mentioned that one of the pivot points coming up is on August 10. August 10 is on a Friday, in the chart above, August 15 is slated as a pivot point which is a Wednesday. The most likely day for that pivot point is quite possibly Monday, August 13. Swing Trading The Russell 2000 in the chart above in my view shows wave 2 coming to completion in Elliott Wave terms. I saying this only because there seems to be so much hope out there. The market is going up based on words from politicians not even a promise. This is a sign of hope in my opinion and that’s a tell tail sign of an Elliott Wave corrective wave, Wave 2.
Wave 2 can go sideways in a complex wave for a while too, it doesn’t necessarily have to go down right away. I’ve heard from some of the best traders out there that this is the hardest market they’ve ever traded. These traders are the best in the business and they aren’t newbies either, they’ve seen more in the world of money than 99.99% of the traders out there have seen.
Another way to tell whether or not you are in corrective wave is the fact that they are extremely hard to trade. If the best traders out there are having a tough time, it doesn’t get tougher than that.
Gold July 27, 2012, Descending Triangle
The chart above shows a descending triangle on a Gold Chart is a daily line chart of Gold. Gold is slated for a pivot point on August 2 just like all the other markets. Money flows in and out of sectors faster than you can blink. The gold bugs are pretty excited about the breakout from the previous high and the breakout from the descending line (the line I didn’t draw in) from the 2012 highs in March till June. There is a valid point to be exited about this, but I get worried when people get excited. Everyone seems to think that QE 3 is on it’s way only because the European Central Bank said “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me it will be enough.” I don’t know about you, but for me, it seems like the powers that be are always to late with everything. The only time they print money is when the markets take a tumble and the big guys on wall street are crying and demanding like a little kid for the central banks to do something. The more I look at the gold chart, the more I think that this consolidation is going to go on till the end of the year.
- The biggest reason is a pivot point slated for December 4, 2012
- Another reason is the fact that a descending triangle or any triangle for that matter unfolds in 5 waves, the chart above only has 3 waves ( A,B,C ). The next wave (D) would go up to the descending line fall down to the horizontal line (E) and then bounce out to new highs. The other thing to remember about a triangle is that the wave out of a triangle is the final wave and the length of the final wave is equal to the distance of the widest part of the triangle.
- The scariest thing about a triangle is the fact that sometimes they can be a reversal pattern, I’ve seen that many times too but it’s least likely.
I still have my junior mining stock I bought in May. The biggest reason I still own it is the fact that I myself personally, counted 5 waves down from here the stocks should go 3 waves up and then go down to new lows sometime in the future.
Swing Trading The Russell 2000 and a look at a descending triangle on a Gold Chart
