Daily Archives: March 7, 2017

The Metals Rally Has Been Delayed, But Not Cancelled

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by Avi Gilburt, ElliottWaveTrader.net

First published Sat Mar 4 for members of ElliottWaveTrader.net:  Three weeks ago, as the GDX was consolidating just below its .764 extension, the market had a clear set up to break out.  However, when it did not do so over the following week, I noted in our trading room at Elliottwavetrader.net that I was hedging my portfolio because when a market has an opportunity to break out, and chooses not to do so, the market is often signaling it wants to pullback before the actual break out.  This seems to be the path the market has now taken.

My Perspective

In the past, I have noted that when the metals complex is in a larger bullish posture, I will always look towards the more bullish of the patterns as my primary, because experience has taught me this market often leaves people behind with shallow retracements:

“. . . based upon the larger degree perspective, with seeing 5 waves up from the 2015 lows, and then another 5 waves up from the December 2016 lows, I am on the hunt for the heart of a 3rd wave in this complex.  When we are looking for a heart of a 3rd wave to take hold, they OFTEN do not provide much in the way of pullbacks.  For that reason, I have always defaulted to a more immediate break-out scenario potential, since, otherwise, you can be left in the “dust” (pun intended), wondering where your pullback went.

Along those lines, the market has been consolidating near the highs for quite some time now.  And, as I noted last week, when the market has made a number of attempts to break out, and is unable, it often falls back into more of a correction, in order to take another running start at the heart of the 3rd wave.  So, with the inability to break out when it had a break out set up last week, I noted towards the end of the week that I would be hedging my account in consideration of that potential, and while we were still right at the highs.

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Should You Go to College?

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As the headline to this post suggests, I’m not going to write about charts or the stock market right now. I certainly could, because I’m actually enjoying trading more than I have in quite some time, and I am very heavily exposed with 64 positions using over 200% of my portfolio cash value. However, I don’t have anything especially new to say, so I’d rather lay out some thoughts that occurred to me – – when else? – – during a dog walk.

As I was strolling along in the chilly pre-dawn hours, I asked myself how much good college has done for me. It didn’t take me long to conclude: zero. Some of you know that I graduated from college rather swiftly (in just 2 1/2 years), since I was eager to get into the world of work. The information I garnered during those 2 1/2 years hasn’t been useful to me even once during the many years since I graduated, and there isn’t a single contact I made in college that was beneficial to me in any way at all.

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A Small Blizzard Of Falling Wedges

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Nice decline on SPX yesterday morning, which didn’t fill the open gap support into 2363.64, and a nice rally in the afternoon, that didn’t fill the open (possibly breakaway) gap resistance into Friday’s close at 2383.12. The opening setup here is 70% bullish falling wedges breaking up on all of SPX, ES, NDX, NQ and RUT, TF. I posted my premarket video that I record every morning for Daily Video Service subscribers at theartofchart.net on my twitter this morning before the open to show the setup, and you can see that video here. SPX 60min chart:

170307 SPX 60min

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