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Elliot Wave Analysis

  • #1,261
  • Mar 24, 2021 5:00am Mar 24, 2021 5:00am
Quoting stringfx
Good morning folks ... Yesterday was really wild . today i am not expecting fireworks as it might be a calmer retracement day... maybe if the retracement gets over faster, we could still have some fireworks in the later part of the day. today in the economic calendar, we do have some red news on eur which might possibly take the euro up on the retracement but at 18:00 hrs we have Powell and Janet are testifying and there will be a Q&A session, where the volatility increases, so i am crossing...
exactly as assumed . all eur economics was green to push the eur up but that's what we want as well .. we need eur/usd to be up to sell the living daylights of the pair. wait for fibo retracement levels to short else short very small.
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  • #1,262
  • Mar 24, 2021 6:15am Mar 24, 2021 6:15am
Good news , cannot sustain gains = short , especially as under 200ma. jmho. Wave wise also favour short it seems. Staying short . Earlier shorts trailing stopped.
  • #1,263
  • Mar 24, 2021 7:02am Mar 24, 2021 7:02am
Quoting blurbear
Good news , cannot sustain gains = short , especially as under 200ma. jmho. Wave wise also favour short it seems. Staying short . Earlier shorts trailing stopped.
around 35 pips more (1.1868) will be the daily range for eur/usd. Probably might reach there and then tank. It also could be the volatility when powell and yellen speaks in a couple of hours. I have a pending order to sell at that point.
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  • #1,264
  • Mar 25, 2021 7:21am Mar 25, 2021 7:21am
Are the biggies sneakily hiding a running flat.? And v has quietly begun..we will know soon

eur 15 min
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  • #1,265
  • Mar 25, 2021 11:06pm Mar 25, 2021 11:06pm
Good morning folks !

There was not a lot to report yesterday, it was a slow grind down to 3rd wave targets at 161.8 % exactly on the 1 hr chart. Now we will slowly go up on the 4th wave to 38.2 % or 1.1833 (+ or - but mostly +) after which we should be getting a final wave down to wave 5 . the targets for which i will post once we get confirmation of 4th wave ending. so here is a 1 hr eur/usd chart.
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  • #1,266
  • Mar 25, 2021 11:38pm Mar 25, 2021 11:38pm
Quoting stringfx
Good morning folks ! There was not a lot to report yesterday, it was a slow grind down to 3rd wave targets at 161.8 % exactly on the 1 hr chart. Now we will slowly go up on the 4th wave to 38.2 % or 1.1833 (+ or - but mostly +) after which we should be getting a final wave down to wave 5 . the targets for which i will post once we get confirmation of 4th wave ending. so here is a 1 hr eur/usd chart. {image}
seems like bounce is so feeble so far. If Europe n NY were to break the Low, think means 3 is still ongoing.
  • #1,267
  • Mar 26, 2021 12:00am Mar 26, 2021 12:00am
Quoting blurbear
{quote} seems like bounce is so feeble so far. If Europe n NY were to break the Low, think means 3 is still ongoing.
When there is a strong trend the counter trend moves will be very weak, however for liquidity's sake and to get more institutional sellers, there will have to be some buying (maybe fake outs). Friday is generally a day for that kind of PA (if you have noticed in the past).
In any case, that is the main reason i have been requesting everyone not to buy and get trapped unless you have deeper pockets for hedging. I am actually waiting for the next COT report to see what the institutional traders have been up to. Good luck .
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  • #1,268
  • Mar 26, 2021 12:07am Mar 26, 2021 12:07am
Quoting stringfx
{quote} When there is a strong trend the counter trend moves will be very weak, however for liquidity's sake and to get more institutional sellers, there will have to be some buying (maybe fake outs). Friday is generally a day for that kind of PA (if you have noticed in the past). In any case, that is the main reason i have been requesting everyone not to buy and get trapped unless you have deeper pockets for hedging. I am actually waiting for the next COT report to see what the institutional traders have been up to. Good luck .
yes, fridays are called freaky fridays as anything can happen. While I am looking for a decent dead cat to short into, I also do not rule out it doing a bungee jump as well. I may be wrong, my sense is mkt is not short , more likely still long, especially bottom fishing retails.
  • #1,269
  • Mar 26, 2021 12:52am Mar 26, 2021 12:52am
Quoting blurbear
{quote} yes, fridays are called freaky fridays as anything can happen. While I am looking for a decent dead cat to short into, I also do not rule out it doing a bungee jump as well. I may be wrong, my sense is mkt is not short , more likely still long, especially bottom fishing retails.
IMHO, i feel on a daily time frame, DXY is on a correction mode going up. Expecting a major ABC where this is the A leg and soon we should get a reversal for a B wave and then a bounce up for C wave which is the wave 2 major on DXY.
Similarly on euro, i believe this is a daily correction to the down side but on longer terms, euro is bullish but for some weeks we should be going down on euro until major 3rd wave starts.
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  • #1,270
  • Edited 1:14am Mar 26, 2021 12:55am | Edited 1:14am
Quoting stringfx
{quote} IMHO, i feel on a daily time frame, DXY is on a correction mode going up. Expecting a major ABC where this is the A leg and soon we should get a reversal for a B wave and then a bounce up for C wave which is the wave 2 major on DXY. Similarly on euro, i believe this is a daily correction to the down side but on longer terms, euro is bullish but for some weeks we should be going down on euro until major 3rd wave starts. {image} {image}
I agree. Just what form it takes. Euros seems to be doing a double threes...it can yet become triple threes. My opinion is this retracement may not stop at 38.2 which I have as at 1.1694.
  • #1,271
  • Mar 26, 2021 2:46am Mar 26, 2021 2:46am
Quoting stringfx
Good morning folks ! There was not a lot to report yesterday, it was a slow grind down to 3rd wave targets at 161.8 % exactly on the 1 hr chart. Now we will slowly go up on the 4th wave to 38.2 % or 1.1833 (+ or - but mostly +) after which we should be getting a final wave down to wave 5 . the targets for which i will post once we get confirmation of 4th wave ending. so here is a 1 hr eur/usd chart. {image}
How do you get a confirmation of a wave ending?
  • #1,272
  • Mar 26, 2021 4:01am Mar 26, 2021 4:01am
Quoting Merka
{quote} How do you get a confirmation of a wave ending?
There is "no one answer" for that question i am afraid. it's probability.
I usually have fib targets. the usual target for 4th wave is 38.2 % of wave 3. sometimes it goes to 50% as well. Rarely above that. Also rarely if the bullish pressure is very high 23.6% of wave 3 is also noticed. However i stick with 38.2. the other factor with wave 4 is it retraces usually back to 4th wave of a lower degree as marked in chart in orange.
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  • #1,273
  • Mar 26, 2021 5:01am Mar 26, 2021 5:01am
Quoting stringfx
{quote} There is "no one answer" for that question i am afraid. it's probability. I usually have fib targets. the usual target for 4th wave is 38.2 % of wave 3. sometimes it goes to 50% as well. Rarely above that. Also rarely if the bullish pressure is very high 23.6% of wave 3 is also noticed. However i stick with 38.2. the other factor with wave 4 is it retraces usually back to 4th wave of a lower degree as marked in chart in orange. {image}
Thanks
  • #1,274
  • Edited 10:41pm Mar 27, 2021 12:16pm | Edited 10:41pm
Quoting stringfx
{quote} Although in my opinion, the chart of dxy does not actually provide a good enough evidence of where it wants to go but i feel the weekly COT report can provide some insight to where the smart money is leaning towards. I use Tradingster.com: Free COT Charts, Commitments of Traders Reports. I take down important currencies and indices into an excel sheet and compare with the last 2 weeks and see for substantial changes in the hedge fund commitments. From there i make a calculated judgement on the pairs...
Hi stringfx,

Kudos to you because you nailed it. Although EURUSD initially went up at market open this past week, that was a retrace after which it went significantly down (and you said to go short too, or at least not go long after that retrace had occurred).

Before asking my questions, let me say that I was drawn to this thread because I have studied Elliott waves and am interested to see how it can supplement my own different methods which are namely pitchforks, geometry and fibos. I don't mean to highjack this thread away from its main focus, but clearly you also use COT, for example, and I would appreciate any further insights into these trends on the COT changes, week-to-week, so I can understand it better.

You noted the relatively large/abrupt changes in US$ Long/Shorts held on the March 16 report. However, I don't really see that the EUR Long/Shorts changed much, yet the EURUSD chart did make a move. (So is this "$ strength" drove the move, whereas "Euro strength/weakness" didn't really change?)

Here's some side-by-side of 3 weeks, for both the US Dollar COT charts, and then the EUR COT charts:

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Euro Fx:

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Any comments? I've circled a few things that I noticed, but are there other things you look at?

Q: The various traders report their COT positions each "Tuesday" and the report of those positions is released each Friday 3:30 Eastern US. Do you know if the Tuesday reports are the status as of a particular time of day? (My guess would be 17:00 Eastern). I'm just wondering because it's possible to create an offset weekly bar-chart that shows what happened for the Tuesday-to-Tuesday time period represented by the COT report.


P.S. By a simple Trendline on the EURUSD chart, there were a couple of precise opportunities to go short. I did not notice or trade these live. This EURUSD,H1 chart has cycle lines added every Tuesday at 17:00 Eastern.

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  • #1,275
  • Edited 2:26pm Mar 27, 2021 1:35pm | Edited 2:26pm
[quote=pips4life;13471682]{quote} Hi stringfx, Kudos to you because you nailed it. Although EURUSD initially went up at market open this past week, that was a retrace after which it went significantly down (and you said to go short too, or at least not go long after that retrace had occurred). Before asking my questions, let me say that I was drawn to this thread because I have studied Elliott waves and am interested to see how it can supplement my own different methods which are

Ah... Finally someone who has asked all the right questions . I would love to answer all but i would require some time and also i will answer part by part as there is a lot of information to give. You must be knowing by now that trading this vicious market is not a joke especially for a 54 year old like me with receding eye sight. Elliot wave is a brilliant tool to have in your arsenal but it's not an accurate tool as counts can differ from people to people. There is no perfect count, we have to keep changing to suit the trend. In any case, technical analysis can only give predictions from past data. Fundamentals will provide some insights into future trends, then there is relative strength between currencies and also we should check on bond and yield prices to check if we are on the right track. On top of all these is trading psychology which includes greed, revenge, fear, regret, overconfidence etc..

so during the holidays,(Saturday and Sunday) I check all these info ... I start off with:
1 ) COT analysis.
2) Relative strength ... I use Forex Performance (finviz.com) also barcharts.com
3) I check price of bonds and yields of various currencies . For example if Cot report states that GBP has a lot of long contracts added and short contracts decreased then clearly gbp looks bullish, now to confirm with the bullishness, I visit tradingview.com and check the 2 year and 10 year bond and yield prices of GBP which are GB02 and GB02Y. they work inversely. If GB02Y prices are going high, then investors will be interested in buying the asset and take prices higher. Like in quantitative easing, governments buy bonds and take bond prices higher and yields come down. when yield comes down, the currency comes down.
4) i also use sentiment data. the website i use is Current Ratio | FXSSI - Forex Sentiment Board. (very helpful data for sentiment data across most brokers.)
5) lastly i check the charts for my EW counts. I start off with DXY and see where this asset is heading. Most of the other currencies are paired with the dollar as majors, so we get a good idea as to the direction of the market. after analysing all these data, i make my calculations and charts and update this thread .

Will continue with this later on ... especially on COT .. just need some more time .
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  • #1,276
  • Edited 11:25pm Mar 27, 2021 10:20pm | Edited 11:25pm
Tradingster.com gives a lot of information for almost all assets in forex, commodities, indices and you name it. They also have graphical presentation as you would have noticed if you scroll down ( as shown here in pips4life's post).
I am sure most have heard of this report but for those who haven't, it is a weekly market report issued by the CFTC (commodity Futures Trading commission). This report shows the how much of money is used on a weekly basis by institutional traders and big banks + hedge funds in the futures market. They(CFTC) release a new report on every Friday at 03:30 p.m eastern Time but the report has data from the previous Tuesday's holdings of these traders. Through this report we come to know how the big traders are placed in the market so that we can follow them. Although this is a delayed report by 3 days, it does not affect the end result as COT is a long term indicator and cannot be used for scalping or any other short term trading.

There are 4 types of COT reports namely Legacy , Supplemental, Disaggregated and TIFF (traders in financial Futures.). I am only interested in Legacy reports.
So we go to tradingster.com and click on COT Legacy.
Here we are interested in non-commercial traders activity only.
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  • #1,277
  • Mar 27, 2021 10:46pm Mar 27, 2021 10:46pm
Here we are interested in non-commercial traders activity only .... In the report given by pips4life, he has chosen the TIFF report which is next to legacy, that report further divides it to asset managers, hedge funds, dealers and swap traders and retail (non reportables)
but we are getting an aggregated report by legacy, so i choose legacy reports. Non commercials are the big banks and hedge funds. the commercials are the sell side of the market which comprises of big businesses like coca cola, Pepsi and producers like big farmers who hedge against their produce.
The asset manager or big banks are also called the Slow smart money who has very deep pockets and they gradually play the trend. Hedge funds or leveraged money are the fast smart money, they are actually the market movers in the week.
Legacy report combines the trading activity of asset managers and hedge fund to give us a total activity in a week. I take down these numbers to analyse how they are placed.
The following are to be noticed according to me ...
1) Net position of long and short. example .. gbp has a non commercial long contracts of 100,000 and short positions of 150000, then GBP is 'net short' as shorts are more, so the leaning is towards, gbp shorts by these traders
2) check for changes made by these traders in the week. These traders hedge according to market conditions. they are like wolves and retail traders are like caribou.
They follow the sentiment of retail traders and when the time is right,, the take it the opposite way and make their kill. so even if the net position of GBP is short, the weekly positions change for their sport killing.
3) check for speculative sentiment in the market. If retail herd is taking the price down, you can be sure the smart money has started buying. ( i gave a link to check this in my previous post.)
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  • #1,278
  • Mar 27, 2021 11:00pm Mar 27, 2021 11:00pm
This is a graphical representation of euro futures from legacy report. In this you can notice the net positions of non commercial, commercials and non reportables. i have removed the non reportables line by clicking on the non rept legend . so i have only comm and non comm. you can see i have a zero line in the middle and here you can see clearly euro is net long. each dot on the blue line shows how much of increase or reduction they do. so in short on a long term basis, we know that euro is bullish but from jan 26th of this year, you can see that smart money have brought their positions in euro down from 165K to around 89K. Now if you go to your charts and see from jan 26 2021, we had a fall of almost 400 pips on eur/usd. there were spikes as well but price continuously were brought down by these traders.
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  • #1,279
  • Mar 27, 2021 11:13pm Mar 27, 2021 11:13pm
This is an average sentiment of traders in most of the famous brokers across the globe ... if you notice, price is being brought down and most of the retail herd is buying in the recent past.
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  • #1,280
  • Mar 27, 2021 11:21pm Mar 27, 2021 11:21pm
On tradingview .. here is what i check for bonds and yields if you notice from the graphic representaion, bonds are buying and yields are selling, this is a clear indication that the currency is at least in short term going down. you need yields to be up for investors interest to buy.

DE02 are European 2 year bonds
De02Y are the 2 year yields
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