Registered User
Joined: 12/8/2004
Posts: 1,301
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I'm really convinced that finding stocks that are acting in an OBVIOUS elliott wave pattern is the way to go.
Right now, ATMI has just completed an ABC wave 4 correction. Wave 5 begins if the stock moves above 30.01. Should it do so on monday, you would only need to set your stop at 29.29 or slightly less to be more careful. Wave 5 should take this stock to 35.00.
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Registered User
Joined: 12/19/2004
Posts: 457
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HnC,
I'd be careful with that software. ATMI is not what I'd call an obvious elliott wave pattern.
This is why a chart needs to be viewed on many different time frames. The daily is a mess from a wave POV, although there is a clear uptrend on all time frames from monthly thru daily.
Also keep in mind we are at the uppper end of a 5 year trading range, with a resistance line that dates back to 1997 (not counting the violation in early 2000).
Perhaps for a swing trade this would be ok, but if it came near your targets, I'd be a seller, for standard technical reasons.
If anything, I think at most this may retrace 38.2% of the decline, only to further violate the lows.
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Registered User
Joined: 12/8/2004
Posts: 1,301
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the software didn't find this. I did. I just confirmed with the software where a typical wave 4 would end. It confirmed the end of wave if 30.01 is broken tomorrow ir tuesday.
I'm surprised you don't view it as obvious.
Wave 1 began on 10/25/05 and ended on 12/13. There was a wave 2 abc correction ending on 1/3/06. Wave 3 ended on 2/6/06 and a wave 4 abc correction "could be" over as of Friday. It has to be confirmed, but if it is I like the trade.
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Registered User
Joined: 12/19/2004
Posts: 457
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HnC,
From an asthetic POV, that is an ugly impulse count.
The wave 1 ends with a wave 5 of 1 lower than wave 3 (of 1). That shouldn't happen in a stock at the start of an uptrend.
Next, the internal waves of your wave 1 just don't look right. I go by the Posner rule. If I can't count it (easily) it isn't an impulse wave.
I guess what bothers me about the trend you are talking about is that it is too flat. It looks like some sort of correction to me.
In favor of your bullish position: my momentum indicators are all telling me the stock is oversold on the daily and weekly charts, so a rally of some sort is due.
When I can't use waves as targets, I resort to Bollinger bands and a 21 period moving average.
Based on the momentum indicators, I'd expect a rally to about 31.80, with a max move around 33.50 (the 1 SD BB).
Interestingly, the 21 day moving average target coincides with the 21 week 1 SD Bollinger Band.
Volume would lead me to think this correction has farther to go. Prices broke down on high volume during the first wave down. The retracement showed above average, but lower volume than the downleg, confirming the downward trend.
The low last week shows very low volume. It is hard to tell if it is lack of selling pressure, buying pressure, or both. What is really needed is a good volume day with a candle reversal--ie. a bullish white line.
All in all, I think the bulls have more to prove than the bears at this point.
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Registered User
Joined: 12/8/2004
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The other bullish point is it has a fairly high short interest at 7.5.
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Registered User
Joined: 3/7/2005
Posts: 148
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where is the easiest way to find short interest
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Registered User
Joined: 12/8/2004
Posts: 1,301
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It is built into TC2005. Look at the top of your screen where the open,high,low and close information is located. You will see the default area that tells you whether a stock is optionable. Click on optionable. A menu will come up. Select insert new field to the right. A new screen will come up. Go to the pull down menu and select Latest Short Interest ratio. It will now be on every chart you look at.
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Registered User
Joined: 3/7/2005
Posts: 148
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hnc thanks for your input
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Registered User
Joined: 10/7/2004
Posts: 166
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QUOTE (HaveNoCents) The other bullish point is it has a fairly high short interest at 7.5.
Haveno;
What is considered a "good short interest" number ie. you say 7.5 is "faily high," so what would be a good number to go long on Vs. going short?
Happy Charting
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Joined: 12/8/2004
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Personally I think anything with a short interest over 6 can give your stock a nice potential rise. I never just buy a stock based on short interest, but if you can find a stock that is building some momentum off of a low the short squeeze is a fun and profitable trade. My rule on shorting is I never short any stock that already has more than a 4.5 percent short interest ratio. Once piece of good news rumor or not can make the stock skyrocket.
This is the reason I am learning elliott waves. I have never been able to "catch a falling knife", but I truly believe I can come close now on stocks that have an easy to spot abc correction wave. I have never been able to guess a top, I would just keep the stops at the 50 or 150 day moving average, but now I feel I know where the best chance for a top is located. Is it 100% accurate? Heck no, but is one darn good educated guess.
I think the combination of what I have already learned from Stan Weinstein, coupled with elliott wave analysis and total risk management through position sizing, I will have an incredible combination of skills for the future.
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Registered User
Joined: 10/7/2004
Posts: 166
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Haveno;
Thanks so much for your help on my trading education. It is greatly appreciated.
However, I am a little slow on the uptake at times so please bear with me.
Elliott Waves aside (I am slowly trying to understand that also but not today) are you saying the foll:
- 6.5% and up is a BUY signal?
- 4.5% and down is a SELL signal?
Now, by signal, what I really mean is a "confirming signal" assuming other indicators I use have already identified a stock opportunity.
I use TSV?MS/MACD/Volume and of course price. I lean towards to LR on Price and TSV. On volume, I use 9 period MA (pcf = v-avgv50) that I gleened from another discussion on Worden Forum.
Did I get it right?
Happy Charting
QUOTE (HaveNoCents) Personally I think anything with a short interest over 6 can give your stock a nice potential rise. ... My rule on shorting is I never short any stock that already has more than a 4.5 percent short interest ratio. ...
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Registered User
Joined: 12/8/2004
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On shorting, I never ever want to be part a large group that eventually has to cover. Good news can cause the stock to gap up and totally miss your stop.
Yes, for me over 6 is a buy signal given it is coming off of a recent low and it meets my elliott requirements. The software I have suggests three areas where a stock is likely to go. In has a min level, a typical level, and a maximum level. If a stock is in a downward trend and hits the trend HITS the typical level it becomes something to watch. If you have a situation where the stock closes above the high above the high of the typical low for that wave you have a buy.
The software figures this out, but it is based on the previous wave. So far I have been unable to figure out which fibanacci numbers they are using. It appears it varies based on the length of the previous wave, or based on the low of the first wave of the sequence, and the last high of the sequence.
The reason why I mention this is I don't know if I could figure this out for myself based on other indicators such as TSV. All indicators are lagging. If you were to use an indicator I would think it would have to be based on a very short time interval such as 5 days or less.
I wish I could tell you more, but right now I just don't have the answer. I may never have the answer.
I do know one thing. If the stock truly has an elliott wave pattern going, and only about 50% of the stocks do at any given time, the accuracy is phenomenal. There really is something to this. The key is to stay away from things where no clear pattern exists.
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Joined: 12/8/2004
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I swear typing while you are on the phone at the office makes for some really funny posts on my part. I've never see so much unclear jibberish. I will try to retype that when I get some free time.
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Registered User
Joined: 12/8/2004
Posts: 1,301
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What I was basically trying to say is before I had MT-Predictor I would not ever try to catch a falling knife, but now I would if certain criteria were met like a one day reversal. I don't believe any lagging indicators would be of much help. I've never tested it, but perhaps bop might.
The thing I like about this software is it can give you a realistic target on almost anything that has had some kind of correction that has occurred over a period of time. There are no guarantees, but obviously it allows you to get in at a low risk point to find out if the software is correct.
We are also at a top of the market so I don't expect great results.
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Registered User
Joined: 10/7/2004
Posts: 166
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Thanks.
How useful is mt as a short opportunity indicator?
Re: Short interest
Can the interest go below zero %? Think I know the answer but just want to make sure.
Happy Charting
QUOTE (HaveNoCents) ...
We are also at a top of the market so I don't expect great results.
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Registered User
Joined: 12/8/2004
Posts: 1,301
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I can't see how short interest could possibly go to below zero. It either has some short interest, or it doesn't.
Theoretically the program should work just as well on shorts. They always recommend you trade in the direction of the market. The overall direction of the market is up, but for all practical purposes we are in a sideways choppy market right now. I do have some shorts.
I am short SIRI, at 6.34 but the program didn't predict that, I did. My stop is at 5.40.
I am short FD, at 71.46. The program did predict that. stop at 72.49.
I am short LLTC at 36.98 but I might get stopped out at 37.54. This is also a program prediction.
I am long on FDC, bought at 44.27, expected target is a minimum of 47.00. (program)
I will go long on ATMI if it can close over 30.01. This is a manual prediction using the program.
I am long on EGO with a stop at 4.01 and an entry of 4.17 program predicted.
I am long on HARB program predicted. In at 38.08 exit at 37.39.
That is it. All out in the open for everyone to see. Like I said, even if the software fails, this was not a good time in the market to test it.
I got stopped out of three stocks, 1 was profitable, and 2 were not. The profitable one was IMMR. I bought it at 6.43 and got stopped out at 6.72 because I get moving my stops up because of market conditions. The two I lost on were absolutely terrible patterns, but I didn't realize it.
What I have done since I am testing this software is to pretend I only have 30,000 in my account. Therefore I cannot risk more than 150.00 per trade based on the formula.
If the program fails on giving me good setups then I will go to manual mode and test it. ATMI is the first manual stock I have selected that I believe has a predictable pattern. If that fails I will go back to weinstein's method, but use this program to select my exit targets. Either way, its going to be worth it for me.
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Registered User
Joined: 12/8/2004
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oops, I left 1 off. This pattern wasn't very good, but so far I haven't been stopped out. Had I read the manual correctly I would not have shorted this stock.
I am short OKSB at 22.00 with a stop at 22.97 which was program predicted.
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Registered User
Joined: 10/7/2004
Posts: 166
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Overall it seems like you are getting some real life experience with the program.
Thank you for sharing them with us.
Separately, please forgive my anal questions (ie: < zero interest) but sometimes I have difficulty fully grasping which way is up when trading and the answers help me to keep things straight. Thank you for your patience and thoughtful answers. I am learning a lot.
Happy Charting
QUOTE (HaveNoCents) oops, I left 1 off. This pattern wasn't very good, but so far I haven't been stopped out. Had I read the manual correctly I would not have shorted this stock.
I am short OKSB at 22.00 with a stop at 22.97 which was program predicted.
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Registered User
Joined: 12/8/2004
Posts: 1,301
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My pleasure I hope it helps.
ATMI didn't make it to 30.01 today at the close so I will give it one or two more days. If it doesn't make it by then it is off my list.
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Registered User
Joined: 12/8/2004
Posts: 1,301
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Well, today I got into atmi. The stock is up on an absolutely dreadful day for stocks.
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