Comments on: Are We Reliving 1982 or 1975? http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/ Helping traders overcome fears and emotions in trading Thu, 09 Feb 2012 12:53:25 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: bernard12 http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-213672 bernard12 Mon, 10 May 2010 08:23:20 +0000 http://blog.afraidtotrade.com/?p=3874#comment-213672 Technically you can argue which market we are mimicing but fundamentally we exist in a global market now and this debt crisis is new and expanding. Can you comment on how small caps have done during these different market crashes? What are your thoughts on small cap etfs? Technically you can argue which market we are mimicing but fundamentally we exist in a global market now and this debt crisis is new and expanding. Can you comment on how small caps have done during these different market crashes? What are your thoughts on small cap etfs?

]]> By: Black Monday – Ancient History or Possible Future? | Penny Stock Trading System Blog http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-211031 Black Monday – Ancient History or Possible Future? | Penny Stock Trading System Blog Fri, 30 Oct 2009 21:57:54 +0000 http://blog.afraidtotrade.com/?p=3874#comment-211031 [...] another (positive) look, compare to my post “Are We Reliving 1982 or 1975?“  where you can see how the analysis played out.  This referred to the market [...] [...] another (positive) look, compare to my post “Are We Reliving 1982 or 1975?“  where you can see how the analysis played out.  This referred to the market [...]

]]> By: Black Monday - Ancient History or Possible Future? | Afraid to Trade.com Blog http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-211002 Black Monday - Ancient History or Possible Future? | Afraid to Trade.com Blog Thu, 29 Oct 2009 23:57:36 +0000 http://blog.afraidtotrade.com/?p=3874#comment-211002 [...] another (positive) look, compare to my post “Are We Reliving 1982 or 1975?“  where you can see how the analysis played out.  This referred to the market [...] [...] another (positive) look, compare to my post “Are We Reliving 1982 or 1975?“  where you can see how the analysis played out.  This referred to the market [...]

]]> By: nickmarshall http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-212752 nickmarshall Fri, 21 Aug 2009 08:23:21 +0000 http://blog.afraidtotrade.com/?p=3874#comment-212752 The current S&P chart bears only a superficial resemblance to the 1982 chart. In 6 weeks the 1982 S&P rose about 20% in a clear 5 wave pattern which can hardly describe the March to early May 09 chart which is overlapping but involved a 36% rise to the point at which you cut the screen shot off. The market had been in a big sideways move since 1966 which most analysts count as the top of the wave 3 - which is a significantly different context to a correction after the biggest fall in nearly 80 years. <br>The fact is that fractals so often look the same. I often forget whether I am looking at a 5 minute chart or a 60 minute chart because they can be so similar. The current sentiment is typical of a wave 2 correction - people have very quickly forgotten the pain of last year and the first 2 months of this one. The talk is all bullish and suggests to me that we are much closer to a top than in danger of missing out on a new bull market. This is why Robert Prechter is still the master of Elliott Wave theory. He studies human behaviour as reflected by stockmarket indexes. Elliott Waves are not some magic theory driven by an abstract mathematics. They are driven by human greed and fear. Essentially they are waves of growth, the rise and fall in the tides of human affairs. Trying to make a wave count without trying to tie it in with what is actually happening - the socionomics as opposed to the economics - is like trying to tie your shoelaces one handed. The current S&P chart bears only a superficial resemblance to the 1982 chart. In 6 weeks the 1982 S&P rose about 20% in a clear 5 wave pattern which can hardly describe the March to early May 09 chart which is overlapping but involved a 36% rise to the point at which you cut the screen shot off. The market had been in a big sideways move since 1966 which most analysts count as the top of the wave 3 – which is a significantly different context to a correction after the biggest fall in nearly 80 years.
The fact is that fractals so often look the same. I often forget whether I am looking at a 5 minute chart or a 60 minute chart because they can be so similar. The current sentiment is typical of a wave 2 correction – people have very quickly forgotten the pain of last year and the first 2 months of this one. The talk is all bullish and suggests to me that we are much closer to a top than in danger of missing out on a new bull market. This is why Robert Prechter is still the master of Elliott Wave theory. He studies human behaviour as reflected by stockmarket indexes. Elliott Waves are not some magic theory driven by an abstract mathematics. They are driven by human greed and fear. Essentially they are waves of growth, the rise and fall in the tides of human affairs. Trying to make a wave count without trying to tie it in with what is actually happening – the socionomics as opposed to the economics – is like trying to tie your shoelaces one handed.

]]> By: nickmarshall http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-210203 nickmarshall Fri, 21 Aug 2009 03:23:21 +0000 http://blog.afraidtotrade.com/?p=3874#comment-210203 The current S&P chart bears only a superficial resemblance to the 1982 chart. In 6 weeks the 1982 S&P rose about 20% in a clear 5 wave pattern which can hardly describe the March to early May 09 chart which is overlapping but involved a 36% rise to the point at which you cut the screen shot off. The market had been in a big sideways move since 1966 which most analysts count as the top of the wave 3 - which is a significantly different context to a correction after the biggest fall in nearly 80 years. <br>The fact is that fractals so often look the same. I often forget whether I am looking at a 5 minute chart or a 60 minute chart because they can be so similar. The current sentiment is typical of a wave 2 correction - people have very quickly forgotten the pain of last year and the first 2 months of this one. The talk is all bullish and suggests to me that we are much closer to a top than in danger of missing out on a new bull market. This is why Robert Prechter is still the master of Elliott Wave theory. He studies human behaviour as reflected by stockmarket indexes. Elliott Waves are not some magic theory driven by an abstract mathematics. They are driven by human greed and fear. Essentially they are waves of growth, the rise and fall in the tides of human affairs. Trying to make a wave count without trying to tie it in with what is actually happening - the socionomics as opposed to the economics - is like trying to tie your shoelaces one handed. The current S&P chart bears only a superficial resemblance to the 1982 chart. In 6 weeks the 1982 S&P rose about 20% in a clear 5 wave pattern which can hardly describe the March to early May 09 chart which is overlapping but involved a 36% rise to the point at which you cut the screen shot off. The market had been in a big sideways move since 1966 which most analysts count as the top of the wave 3 – which is a significantly different context to a correction after the biggest fall in nearly 80 years.
The fact is that fractals so often look the same. I often forget whether I am looking at a 5 minute chart or a 60 minute chart because they can be so similar. The current sentiment is typical of a wave 2 correction – people have very quickly forgotten the pain of last year and the first 2 months of this one. The talk is all bullish and suggests to me that we are much closer to a top than in danger of missing out on a new bull market. This is why Robert Prechter is still the master of Elliott Wave theory. He studies human behaviour as reflected by stockmarket indexes. Elliott Waves are not some magic theory driven by an abstract mathematics. They are driven by human greed and fear. Essentially they are waves of growth, the rise and fall in the tides of human affairs. Trying to make a wave count without trying to tie it in with what is actually happening – the socionomics as opposed to the economics – is like trying to tie your shoelaces one handed.

]]> By: Corey Rosenbloom, CMT http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-209123 Corey Rosenbloom, CMT Thu, 07 May 2009 15:39:35 +0000 http://blog.afraidtotrade.com/?p=3874#comment-209123 Gerald,<br><br>I want to make sure you're not missing the point in chart patterns. If half of them meet their targets (an accepted figure), what you're missing is that when a chart pattern hits its target, it will often return on the magnitude of 2 or 3 or more times the risk (stop-loss) when the pattern fails. Patterns have edge not through their accuracy but through the monetary edge, as in making a multiple of the risk (both of which are clearly defined). You can ideally increase the accuracy edge through pattern filtering - using higher timeframes, other forms of analysis, indicators, sentiment (especially), etc so you can tip your accuracy above 50%.<br><br>Regarding sentiment, yes, you need to incorporate sentiment into trading decisions. Keep in mind I'm limited space and time-wise with what I write in these posts - and that I'm not giving away all my secrets and research for free. Often I'm trying to zero-in on a specific point as a teaching exercise, or calling attention to a specific phenomenon. Gerald,

I want to make sure you're not missing the point in chart patterns. If half of them meet their targets (an accepted figure), what you're missing is that when a chart pattern hits its target, it will often return on the magnitude of 2 or 3 or more times the risk (stop-loss) when the pattern fails. Patterns have edge not through their accuracy but through the monetary edge, as in making a multiple of the risk (both of which are clearly defined). You can ideally increase the accuracy edge through pattern filtering – using higher timeframes, other forms of analysis, indicators, sentiment (especially), etc so you can tip your accuracy above 50%.

Regarding sentiment, yes, you need to incorporate sentiment into trading decisions. Keep in mind I'm limited space and time-wise with what I write in these posts – and that I'm not giving away all my secrets and research for free. Often I'm trying to zero-in on a specific point as a teaching exercise, or calling attention to a specific phenomenon.

]]> By: Gerald Clifton http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-209115 Gerald Clifton Thu, 07 May 2009 05:26:33 +0000 http://blog.afraidtotrade.com/?p=3874#comment-209115 Charts are abstract, by definition. Pattern analysis is a coin flip, simply because about half of all identifiable patterns fail to achieve their measured moves. And, if there are no measured moves, there are no patterns. The first thing I noticed about this chart is that there are no momentum indicators -- just pattern analysis. Where was the MACD (however you define the time periods)? Where was the RSI? And (of course) most importantly, what was the sentiment??? Corey doesn't give us this important element in the overall formula, although he hints at it. <br><br>"Common chart structures" mean nothing if everyone is leaning the wrong way. The fact is, as I have seen over and over again during the past 30+ years of trading, most people PRETEND to be technicians (pattern watchers, in the majority) while they are at heart simply reading the current news narratives and believing them. <br><br>You cannot trade without sentiment indicators, and sentiment indicators are very tricky. They have their own cycles, and, by definition, bottoms AND mid-move consolidations are marked by negative sentiment. <br><br>If you want to take a swing at THIS current market conundrum, you had better have a handle on market sentiment. Who is leaning the wrong way? Charts are abstract, by definition. Pattern analysis is a coin flip, simply because about half of all identifiable patterns fail to achieve their measured moves. And, if there are no measured moves, there are no patterns. The first thing I noticed about this chart is that there are no momentum indicators — just pattern analysis. Where was the MACD (however you define the time periods)? Where was the RSI? And (of course) most importantly, what was the sentiment??? Corey doesn't give us this important element in the overall formula, although he hints at it.

“Common chart structures” mean nothing if everyone is leaning the wrong way. The fact is, as I have seen over and over again during the past 30+ years of trading, most people PRETEND to be technicians (pattern watchers, in the majority) while they are at heart simply reading the current news narratives and believing them.

You cannot trade without sentiment indicators, and sentiment indicators are very tricky. They have their own cycles, and, by definition, bottoms AND mid-move consolidations are marked by negative sentiment.

If you want to take a swing at THIS current market conundrum, you had better have a handle on market sentiment. Who is leaning the wrong way?

]]> By: Joe_in_Indiana http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-209111 Joe_in_Indiana Wed, 06 May 2009 23:09:52 +0000 http://blog.afraidtotrade.com/?p=3874#comment-209111 Corey,<br><br>Interesting and informative post. Thank you.<br><br>What about fan lines off the 3/6 low. We have been bouncing off that third fan line. What are the downside probabilities with breaking that third fan line?<br><br>Thanks in advance! Corey,

Interesting and informative post. Thank you.

What about fan lines off the 3/6 low. We have been bouncing off that third fan line. What are the downside probabilities with breaking that third fan line?

Thanks in advance!

]]> By: Mike http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-209110 Mike Wed, 06 May 2009 22:44:43 +0000 http://blog.afraidtotrade.com/?p=3874#comment-209110 Thanks Corey! Thanks Corey!

]]> By: Corey Rosenbloom, CMT http://blog.afraidtotrade.com/are-we-reliving-1982-or-1975/comment-page-1/#comment-209108 Corey Rosenbloom, CMT Wed, 06 May 2009 22:19:14 +0000 http://blog.afraidtotrade.com/?p=3874#comment-209108 Mike,<br><br>The Elliott Count suggests one of two possibilities:<br><br>A) We're in a W4 rally up to the 1,000/1,1000 level, a possibility I've highlighted before<br>B) We've completely finished the 5-wave down of C and are now in Wave 1 up of grand supercycle 5. 2000-2009 was thus an ABC Wave 4.<br><br>What threw me and other Elliotticians is that we didn't get a final push to finish out either the fractal 5 or the fractal 3rd - though both scenarios called for a large rally (being W4 or W1). That's why I wasn't concerned with exactly which count was playing out - they said the same thing until a certain point which was months into the future at the time of my analysis. We're still on course. Mike,

The Elliott Count suggests one of two possibilities:

A) We're in a W4 rally up to the 1,000/1,1000 level, a possibility I've highlighted before
B) We've completely finished the 5-wave down of C and are now in Wave 1 up of grand supercycle 5. 2000-2009 was thus an ABC Wave 4.

What threw me and other Elliotticians is that we didn't get a final push to finish out either the fractal 5 or the fractal 3rd – though both scenarios called for a large rally (being W4 or W1). That's why I wasn't concerned with exactly which count was playing out – they said the same thing until a certain point which was months into the future at the time of my analysis. We're still on course.

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