Value of Perfect Information

It’s always a fair question to see how an analyst did calling a major top. When I posted on 17 July 2011, many analysts were calling for the 2 May high to be exceeded. They were looking at the consolidation as a continuation pattern and not a major topping pattern. Based on the Elliott count of the Weekly and Daily chart and a supporting H&S pattern forming, I changed my little End-Is-Near zealot’s sign that I had been posting for weeks from “IS near” to “WAS near”. Those who have been following my posts and understand Elliott Wave Theory know that this is a significant top that will lead to a correction to a minimum of 1102.75 and most likely 950′ish. There is even the possibility of a retrace of the entire impulsive move from the 6 March 2009 low. And some say we will go much lower. I’m sticking to the more Bullish correction to 950′ish, but I know how ES loves extremes. Look what it did with the correction out of the H&S. Many analysts say the correction is over and that we are going to new highs. You can see from the second chart that I don’t agree. If you are a long-term position trader, you can take this as a informed tip. A colleague asked me my advise on the market and on 17 July I told him I would take my pension and IRA’s out of equities for a while. He’s very happy right now! Knowing that we are going to make a major correction is useful, but if you are a day-trader, you need to know how we are going to get there on a day-by-day basis, and that is what we do at this site.

This is a copy of the 17July2011 post where “Fickle Me“ changed my mind based on the unfolding of new data. Day-traders have the luxury of changing their mind on a dime. Stubbornness because of pride can cost you money! You can click on it to enlarge it.

Let’s take a look at the Weekly chart I posted on 17 July 2011. I’m sure I wasn’t the only analyst who saw the repeating patterns on this chart.

We have to at least take a look at the Weekly chart as of this posting.

When did I first see a H&S forming? Take a look at my posting on 25June2011. This chart became my intermediate overarching view as I analyzed the market for day-traders. Because we were going to be going higher from the 25th, I didn’t call a top prematurely because I had the luxury of waiting for the market to unfold and give me the right moment to call it.

I talk often about my overarching view of the market and how that helps me with short-term trading. Here are a series of prior posts that were successful because of my clear understanding of the Big Picture. These are based on my calling of a market top on 15 July. I was using a series of 360 minute interval on charts in my analysis because it gave me a chart that was useful. The first chart I’ll show is the post of 21July2011. Without a clear understanding of the Big Picture, I wouldn’t be able to draw a big red arrow on this chart. It could as easily be a rally beginning from a bottom – based on this chart alone. The areas on the chart that imply a wrecked count are very meaningful because I’m referring to a wrecked count of my overarching view!

I’ll give you the first three consecutive posts of the week following the above post. The chart below is from 25July2011. You can see I am relieved that my count didn’t get wrecked. When a major count gets wrecked, it’s back to the drawing board. Fortunately, I can’t remembering that happening for years.

Then we go to the 26th of July. The Bulls and the Bears had been dancing around, but the Wave 2 high seemed to be out of jeopardy for the time being. I was still projecting a big Wave 3 with the red arrow.

The last chart I’ll show is the 27th of July. Based on our understanding of the Big Picture, our projection of a major move down was vindicated as the Bears were on the run. The rest is history. The green broken arrows are for profit taking and not significant market reversals. Since this post we have been nailing the market action on a regular basis. I can’t always nail every day’s action because analysis is based on probabilities and not certainties. But I do think that the analysis on this site will give you a substantial edge, and that’s all you can ever hope for from an analyst. An edge plus sound trading techniques is what you need as a day-trader to be profitable. Analysis is much easier than trading! If you have great analysis and poor money management, you will only lose your money more slowly.

If you’re not a subscriber, come and see what’s going on at this site for a month. It’s FREE and there are no hidden agendas other than winning you over as a subscriber. You won’t be getting phone calls and spam emails because we sell your information. Because we don’t. You might even pick up a few tips if you don’t stay. I’ll guarantee you that there are some helpful hints that you can pick up in a month that will benefit your trading.

Our recent success doesn’t guarantee future success! It’s time to go back to work again. If I could more than quadruple my trading account every week, I could pay off the national debt in no time. But that’s not realistic. The trick is to not give back profits, and that is best avoided by not getting over-confident.

The first chart’s purpose is to give us the largest perspective possible. This chart is worth keeping in mind because we all tend to get caught up in the now and lose the bigger picture. I’ve chosen a monthly logarithmic chart of the S&P 500 because of the availability of longer-term data. If you are really new to trading you may not appreciate the log scale because there is no need to use in on Daily charts or lesser time-frames. For those who think that the market is going to rally from this present correction and go on to new highs, take a look at how improbable that looks when seen (broken green arrow) on a log scale. This pattern is begging for more correction. Even the next level down of correction seems a little premature. It would be a H&S that functions as a continuation pattern rather than a top. The next level of correction is my favorite as the most probable long-term Bullish scenario. And I can’t rule out the deepest correction that would take us back to the 6 March 2009 low and possibly a little lower. These are my opinions and perceptions/hallucinations. You must develop your own, but tuck this chart away in the back of your mind for future reference.

We might as well work our way in to the Weekly chart of ES. Because the drop has been so severe, I won’t be surprised to see more range bound trading and a complex W4 forming. Being aware of this possibility might help us be patient while we wait for ES to make its next big move down. The Weekly hammer candle is contrary to my best case scenario for the market. A Bullish hammer often hammers in a bottom. It’s worth keeping this in mind for at least the short term. The timing of the W4 we are in also explains the forming of the hammer. The cluster of targets I’ve identified of the chart for the termination of the correction is my best case scenario for the Bulls for the long-term. That’s because there is a possibility that fear will have us test the 2009 low and possibly go a little beyond as we’ve seen on the Monthly chart.

We come now to the Daily chart. This interval is more useful in coming up with a day-trading plan. ES has hit the minimum W4 target of a 38.2% retracement of W3 and that is even more acceptable since W3 appears to be extended. However, I always feel better when a W4 hits the more typical 50% target. So I will be looking for the downside Monday, but aware that the Bulls could come out of the closet for one more push up. On the chart I identified the minimal target (white dashed line) for a correction of the Weekly impulsive wave starting 6Mar2009. That would be the end of the Weekly W4 or the beginning of W5 which is the low on this Daily chart (1102.75). I expect that we will correct lower, but this first target should keep us occupied for a while until we get there.

I’ve chosen the 30 minute chart to analyze the W4 structure that we have been trading in this past week. This is definitely a corrective wave. Wave C should be impulsive and technically there is a completed impulsive wave making up Wave C and we called that action pretty accurately. The question is whether Wave 5 of Wave C will extend and hit my typical W4 target (red line) or will ES head down on Monday. I’ve also included a real possibility of a complex structure for this W4 that would give us a Wave D and Wave E. That is a very real possibility, so until we officially get out of this W4, trade with care! When I get some more data, I can begin to rule out some of the possibilities I’ve outlined. Good luck!

This first Chart is my EOD analysis that was posted on 8 June 2010. My primary scenario was the Bullish path depicted by the blue arrows. These arrows were drawn to indicate typical market direction and action for the next day. The first arrow up indicated that I thought the market would make a little headway before correcting into a buy-the-dip setup. Then I expected a significant rally into the EOD.

The chart below is the market’s action the next day with the arrows superimposed. Not perfect, but I’ll take that call all day long!

This is my 26May2010 EOD post with analysis for the upcoming session. Analysis was done with a combination of Elliott Wave and typical Fibonacci relationships. As I stated in my post, I was fairly confident in this projection, but once ES got to the upper target, I felt that there were two scenarios possible. But for the next day, I was confident with my analysis. We had some other good calls this week, but this was my favorite.

The chart below is the path that ES took up until the close of trading the next day. I overlaid the arrows on the chart, and as the chart shows, this move was nailed. A 50 point day makes a difference to any trading account.

This chart was posted after the end of trading on 17May2010. It was a straight forward application of typical Elliott analysis, combined with Fibonacci targets and GET’s MOB. The first green circle was identified as the most typical level for a reversal. The smile at the low of the current correction is there because we hit that target from the day before. We were on a run! The arrows on my projections are not time sensitive, they don’t predict the slope of the action, only the levels attained. Globex is usually going to have a much less severe slope than the regular session.

The chart below is a record of the trading the next day. I superimposed red translucent arrows on my projections from the day before. We accurately forecasted 50 points of market action!

Here is my 2May2010 End-of-Day post. It was a rather bold projection for the next day, but I could see no other high probability, alternative scenario.

This is the way the market unfolded the next day. I don’t guarantee results like this every day. The market doesn’t make moves like this every day. But when I only have one arrow on my projection for trading the next day and a highlighted target area, I am not hedging my bets.

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When I posted the first chart below on the night of 29Apr2010, many were calling for new highs the next day. ES was pushing the limits for my reversal scenario to get us to new lows and the end of a proper W4. I’ve seen ES push the limits for retracements so many times in the past, that although I was getting less sure of my opinion, I was going to stick with it up to the 78.6% retracement level.

Posted EOD 29April 2010:

This is the market action for the next day. I used the same regular hours trading chart as above, but indicated where Globex went during the night. Interestingly, both of my projected paths were followed – one by Globex and one by trading during regular hours.

I especially like to post these spectacular moves, but every week we have equally good projections on the smaller action. Major reversals are always the calls we want to brag about. Ben has to harass me to get these track record posts done.

This is a post I made Wednesday night after an uneventful inside day of trading. Red arrows are always my primary scenario. The single red arrow down signified a projected correction at one of the three targets.

This is how the market action unfolded the next day. We not only hit the top target to the tick (rounded off), we called the reversal to the bottom of the channel. All that happened in one day.

This is a chart that I posted during Globex trading on 11Jan. My EOD Analysis for 11Jan2010 had as a primary scenario, a bullish bias for the next day. Once I saw how ES was behaving during the Globex session, I made this update and posted it to my subscribers.

ES 5 Minutes
This chart was a Globex update based on after-hours action. It was posted for Thursday’s action.

The chart below shows how this projection worked out the next day (Thursday)! I’ve indicated the trades that I took on Thursday. I was stopped out of my initial short and reentered for a series of successful trades. I took out 1/2 my position at the first target and the remaining 1/2 at the final target. No runner was kept since I felt the move was over.

I am selecting this post for my Track Record this week because it was extremely accurate. Unfortunately, I changed my mind in mid-stream and only followed half of the analysis. A track record should show when we take wrong turns in the road also. The analysis on this post, however, was excellent and demonstrates to power of Elliott Wave analysis. For this reason, it is worth restudying.

ES 120 Minutes
This chart was my top scenario on Wednesday night for the near-term trading sessions. My primary scenario is identified on the chart as a bounce to one of two targets – 1055 or 1065 – and a drop to a level below Wednesday’s close. Wave analysis was predicting that ES would break below two channel trendlines after a W4 rally. Trading Thursday was nailed with this analysis, as ES came within one point of the maximum target. Friday, ES did exactly what my analysis predicted. Unfortunately I fell in love with a channel and changed my expectation for Friday and predicted follow-through to the upside. I was wrong. I should have trusted my analysis and not my instincts.

This was a wild week of trading. So how did Mortie do? I made some calls this week that went against conventional wisdom. This week I am including in my track record, my Premium Posts for Wednesday’s and Thursday’s trading day. I am preparing this early because MailChimp, who sends the emails, is going to be down for upgrading. The following images are of commentary and charts that I posted on these two successive nights. Nobody claims to be perfect in their analysis, but see if these perspectives would have been useful in your trading.

Commentary 20Oct2009 on Premium Site

ES 60 Minutes
Below is the chart that went along with the commentary above. As you can see, I was looking for a drop to 1075-76 as my primary target and 1070 as my secondary target. ES tested our resolve by rallying to within two ticks of the Globex high before heading down to fulfill our scenario. If you check your charts, you will see that ES hit the second target on my chart, the maximum-typical W4 retracement of W3, before heading up Thursday. My arrows don’t tell how long it will take to fulfill my scenarios, or what “crazy” path they might take to get there. They indicate the general direction of the market and high-probability targets. Today’s action (Friday), IMO, means we are having a complex correction. No trader can predict with certainty the actions of the market because it is all about probability. But by taking the highest probability scenarios, this Premium Site has been nailing a most of these moves. This site is for traders, not perma-bulls or perma-bears. At MortiES’ Premium Site we have experienced traders willing to pass on their trading skills to Newbies. At $1.67 a day for analysis or $2.50 a day for live commentary and interaction with other traders, you won’t find a better deal on the internet. The chart below was posted Tuesday night for Wednesday’s trading.

Commentary 21Oct2009 on Premium Site
After nailing the bottom of what I was calling W4, with my secondary target, I was faced with a decision. The conventional wisdom on the internet, and among traders, was that we would see another big down-day. It was being said that this was the first down-day from a double top in many leading indices. But that didn’t fit my count. And, after all, ES hit my target for a W4. So I went with my count. After such a dramatic drop on Wednesday afternoon though, many subscribers on the Premium Site were doubting a recovery from such a severe drop. But we all held together and traded the upside. Good decision! Friday, ES decided that it wants to go higher ~ the hard way. But my upside targets remain the same. Because we don’t trade our opinions, but trade the market, we had a tough day trading today. Some of us were a little green and some a little red. We advocate the use of stops and waiting for high probability setups to present themselves.

Below is my commentary from Wednesday night’s post for Thursday’s trading day.

ES 200 Min. Globex
This chart below was posted Wednesday night for Thursday’s trading day. Note the character of the consolidation I was expecting before heading up. Wave C was the big drop and it ended with a little W4 beginning. To be true to EW analysis, I expected a minimal W4 and an almost truncated W5 before a reversal of ES. Look at your own charts and review what ES did. You will see that it reversed at 1070, and looked a lot like my projected path. As I write this on Friday morning before the open of trading. ES has rallied to about 1095 during Globex. That is a good start for my scenario! But as I mention in my post Thursday night, ES is overbought and will have to work that off. Of course, it did that in dramatic fashion today. This weekend I will be analyzing the charts for an opinion on next week’s trading.

Value of Perfect Information:Perfect Information allows one to make the best decisions possible. It is not resident in any one person. I only bring a small piece of information to the table as we together seek to uncover all that can be known about this market. Your participation is valued in this quest.

I could post any day last week for an example of my track record this week, but Friday may be the most notable and informative.

Some are still not convinced of the practical use of Elliott Analysis for trading. Maybe this post will help convert the skeptical. There’s a lot of good stuff for wavers and want-2-B-wavers in this Newsletter. And, of course, some good old fashion marketing. MortiES’ Premium Site has been hitting home-runs on a regular basis. I could have picked any day last week to post this weekend, but Friday stood out as a day of large moves and counter-moves. Also, we had great interaction and commentary by the subscribers. Additionally, I was more actively involved in commentary and analysis during the day, as I was demonstrating to subscribers the power of Elliott Analysis and some fibonacci techniques.

The first chart is my premium post for the EOD Thursday. I got bold on this call for reasons explained in detail in my post, and was calling for a W3 top to this current move from 2 October.

Here is the introduction to my comment Thursday night.

And here is the chart I posted on the Premium Site.

Now let’s see what the market did on Friday in the chart below. So you know anyone else who made that call? I traded Globex and grabbed a quick 11 points before 10 am.

Not a bad call! But what about the rest of the day? How did Elliott Analysis guide us through the changing landscape? The next chart below is an intraday Globex Chart that I posted as the drop Friday was reversing off our target. I modified the count for the rebound because of the structure of the drop. It was a 5 wave impulsive move, which meant it couldn’t be the end of W4 and had to be Wave A of W4. so I gave targets for Wave B which pretty well nailed the top later in the day.

The next chart below is the Globex chart of my actual trades that I posted live on the premium site. Posting trades is not part of the deal with the Premium Site. But I will do it occasionally for teaching purposes or when it’s a real no-brainer (high probability trade). I will post changes in counts that I see and new targets during the day. When I’m busy during the day with my practice, there are other excellent traders who are posting their trades and giving excellent commentary. This site is hot!

Take a look at the chart below of my actual trades that were posted live, and see if Elliott could benefit your trading account. If you had traded the predicted turning points on my analysis on Friday, you would have made 25 points. My posted trades netted 20 pts. because of 2 stop losses. And I took profits along the way while trading multiple lots. On a daily rate equivalent, this day’s analysis would have cost a whole $1.67 for your subscription. Why not try us for a month and see if its not time and money well-spent. The chart below is self-explanatory. We certainly don’t promise a fun-day like this every day, but even the boring day’s this week followed our scenarios. In fact, I called turns on these days even better than Friday, many to-the-penny. The chart below is part of my Weekend update for my premium subscribers.It is more of a review. because things got a little hectic on Friday, and some may have lost their way with all the comments being exchanged during the stress of battle. The commentary by subscribers was great! This is not a dull site like the previous one where there was almost no interaction. Review like this are useful to me as well as my subscribers. We all can learn by studying our trades! I’ve had many tell me that I’m not charging nearly enough for a subscription to the premium site. For now, I want to build a site that is second to none. I want to attract Newbies and experienced traders, and I want to see Newbies become the experienced traders of the future. For my current subscribers who also read this newsletter, I won’t be raising fees on any of you. You had faith to help me kick this off, and your support is appreciated!

So go ahead give it a try and subscribe! Click the “Sign Up” button below to get started!

This is another example of a call made by Mortie. It was a quick post before heading off for some routine medical tests. I was watching Globex during the night and had an idea what would happen at the opening. This post nailed the action for the morning and would have more than paid for a year’s subscription if traded. I can’t guarantee that all my posts will be this accurate, but we have been doing well for months now.

This is the actual post I published to the site on October 8th before the regular session opened.

This is what happened that day with the market.

This first series of charts are posts that cover the period highlighted yellow in the 3rd chart. These are posts I published at the time of significant market turns. They will give those unfamiliar with my charts and comments an idea how Mortie has performed at these important times in ES’s recent trading history. These are only the charts and not the comments that accompanied them. The charts are well annotated though, and are self-explanatory. Where there are multiple possibilities indicated by arrows, my preferred scenario was indicated. I like to include secondary market paths, so my subscribers will not be caught unprepared if my primary scenario does not work out.

This first chart is Wave A of Daily W4. The time frame is early to mid June 2009. Because this wave was impulsive (5 waves), I was expecting an ABC (Zig-Zag) Wave B to follow. See the count on the next two charts. At this point, Wave A and B were complete, and ES was in Wave C of Wave B. Specifically I was predicting a final minor W5 to complete Wave C of Wave B (red arrow). I drew the exact level I was expecting for the end of Wave B on the chart. This was hit to the penny and the market reversed, but with a crazy path that required nimble trading. It could not have been predicted by anyone!

This chart is a perfect example of how ES likes to get to an “expected” target in an “unexpected” way. My comments always include the caveat to trade the market and not your opinions. ES is trying to shake off the retail crowd before getting to its target and heading down in a Wave C. That was tough trading, but it helped to know where the market was eventually going. Arrows appear linear on the chart but we realize the market does not move in linear paths.

This chart is a daily chart that shows the section of the market we are analyzing above. I want to be sure everyone is oriented correctly. It was not a previous posting.

THE END OF DAILY WAVE 4 ~ AT THE TIME, VERY CONTRARIAN.

Here was one of my most controversial calls that went against conventional wisdom. At the time, I posted it as “MortiES’ Big Call!”

This is for orientation of the preceding post on the daily chart. It was not a previous posting.

MY LONG-TERM PERSPECTIVE AFTER THE END OF W4 AS I CALLED IT BACK THEN

After my call on the end of W4, the market began a rally. It was at the point of the rally on the next chart that I was hearing that this was a retest of the Head of the H&S pattern. Most traders were calling for a downturn at this point. Look what I predicted, and how I predicted the market might move on its upward journey. Compare with the second chart, which is an up-to-date chart showing approximately the same perspective. Not bad! Will the rest of the prediction work out. Stay tuned!

And where are we today? This also was not posted, but is shown to visualize how the market behaved after posting my primary scenario.

I didn’t select these posts out because they were accurate, I selected them because they were at major turning points in the market.

Since going to a paid site, I have a smaller group following my posts. I’d rather be working closely with a couple hundred subscribers who appreciate the efforts that go into analyzing a market, than spending hours for a couple thousand who take that labor for granted. I know there are many out there who have not yet subscribed who would benefit from these analyses.

I thought that this site would appeal mostly to newbies, but I have been surprised to find that experienced traders are participating too. We have some outstanding traders on the site who are seeking to expand their trading knowledge and analytic skills. IMO, I learn as much from them as they do from me.

I don’t think any of our subscribers will complain about the analyses that we  have been providing. Also, interaction and comments have increased dramatically on this site, so much so that I have to post a comment cleaner here and there and we all benefit from this. Those of you who have been following me for a while know what my performance was in the past.

Since making my posts by subscription only, we have maintained or surpassed our past performances. Would they have helped your trading? Would they have helped you the equivalent of one point on one contract?

I wanted to show those who have been following me for a while, how we have been doing with out analyses. If you are an active trader of ES, I hope you can see the value in what we offer. Of course, if you just follow the market for interests other than trading, I wouldn’t recommend that you subscribe anyway. There is nothing magical about these analyses. My goal is to be consistent, and to be right a lot more than I’m wrong. If you’ve followed me in  the  past, you will know I’m not a consensus taker when forming an opinion. There is a lot of hard work behind my analyses. Why not try a subscription for one month, and see if it doesn’t return your investment many times over. If it doesn’t, you can cancel your subscription.

Go ahead give my analyses a try; click on the button below!

Excellent analyses!