Using Intraday Charts to Plot a Course for Gold

On April 16 I tweeted, " IMO, Gold 60 min chart looks like a B wave from HOD implying another move up may be in store. Prints above 1393.8 bolster my ST conviction."

When I mentioned this in real time what I was doing at the time was building my larger degree wave counts. As you will see, the Elliott Wave Principle allows me to set expectation for further price development. Let's take a look at the process.

As you know, corrective patterns burn time and tend to have overlapping waves. If the advance off the lows is to be labeled as a corrective advance, subsequent price action needs to meet the rules and guidelines of elliott wave but also the characteristics of wave personality should be met.

The B wave, as it turns out is an interesting development due to the fact that:

1. The pullback associated with w.b of w. (b) retraced .786 of w.a and unfolded in a 3-3-5 pattern ... a dead giveaway, according to the rules and guidelines of a flat correction. If this was true then prices would fall in five waves from the w.b crest to complete w.c of the larger degree w.(b) and prints below the origin of w.a would invalidate my interpretation.

2. You'll notice that w.(b) was also a deep correction suggesting that the larger advance that began from 1321.5 would also unfold as a larger flat. If so, counting a five wave advance from w.(b) low would complete the pattern and set the stage for either of three events:

• a full retracement to new lows
• a more complex correction would develop
• prices would continue to advance proving my analysis wrong

Moving forward these are my expectations of what I am looking for. Should the market move in a manner contrary to my analysis then odds are that I am wrong.

I've placed reverse Fibonacci extensions on the chart which reflect levels that are of interest to me. While not labeled, price has already reached a point where w.(c) = w.(a) ... the most common relationship. Thus, the limits to hold onto this interpretation would lie below 1447.8.

I hope you found this lesson helpful. Let's leave it there for now. We'll pick up this lesson over the next few days to see how things turned out.


Best of Trading

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ElliottwaveLive is not an investment advisory service or broker dealer. None of its contributors are registered investment advisors, licensed stock brokers or CTA's. The author may hold short term and long term positions in the futures, stocks and ETF's discussed herein. The author may also trade around those positions which may be in direct conflict with your positions. Complete trade disclosures of the contributor’s holdings are posted at www.elliottwavelive.blogspot.com. See Trader Disclosure. 

Trade at your own risk. The blog site, Newsletter and all other information, material and content accessible from this Site (collectively, the "Content")  provided herein provides the context for market analysis with respect to a market's, a security or a commodity's general position utilizing the Elliott Wave Principle. The Content contained herein are the opinion and general comments of the author and is based upon information that Mr. Sinibaldi considers reliable but neither ElliottWaveLive nor he warrants it's completeness or accuracy and it should not be relied upon as such. Mr. Sinibaldi or ElliottWaveLive (collectively, referred to as “EWL”) are not under any obligation to update or correct any content provided on this website. Any statements and or opinions are subject to change without notice. The content and comments contained herein neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person's investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. 

A more and comprehensive Risk Disclaimer and Disclosure Statements is available within the left margin of this blogsite.   

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Fair Disclosure Notice: I do not have a position in any of the aforementioned futures markets or securities related to this article. 

ES Setup From Low

Often pre-market setups aren't worth bothering with due to lack of volume and the fact that on any given day economic reports are due out. Therefore, I send most of my time scanning markets for potential trade setups that I might consider during the regular session.

Today, I came across this set up in the eminis, that was perfect for illustrating how I use elliott wave to trade. 

Note: This is a hypothetical trade that was made for training purposes!

DETAILS:

1. I saw a pattern that I recognized as a w-x-y that completed where w.y = w.w at 1393.75 with .786 support  and 1390.5 swing low directly below the market. 
2. Entry at 1395.25, (2) cars, initial stop at 1393.50

My initial target for this trade was 1398, then a test of 1400's. 

Dropping to the 1-min chart, you can see the first objective was reached where I took off one contract for 2.25 pts or $112.5. I got caught on the second contract looking for the market to subdivide higher. Notice the initial decline from 1398 was sharp! I could have exited earlier but I wanted to illustrate  how the market always gives you another opportunity to get out before it buries you. The key is "not to panic"!

Since all market movement is either in three or five waves, you look to get out on the first retracement. As shown, I exited just above the .382 retracement at 1396.75 for 3/4 pt or $75.

You might ask why I didn't wait for the .618 to exit.  Something to ponder! What if you're still waiting for that level? 

TRADE RESULTS:

(2) contracts

3.75 pts profit

$187.50

Best of Trading 

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ElliottwaveLive is not an investment advisory service or broker dealer. None of its contributors are registered investment advisors, licensed stock brokers or CTA's. The author may hold short term and long term positions in the futures, stocks and ETF's discussed herein. The author may also trade around those positions which may be in direct conflict with your positions. Complete trade disclosures of the contributor’s holdings are posted at www.elliottwavelive.blogspot.com. See Trader Disclosure. 

Trade at your own risk. The blog site, Newsletter and all other information, material and content accessible from this Site (collectively, the "Content")  provided herein provides the context for market analysis with respect to a market's, a security or a commodity's general position utilizing the Elliott Wave Principle. The Content contained herein are the opinion and general comments of the author and is based upon information that Mr. Sinibaldi considers reliable but neither ElliottWaveLive nor he warrants it's completeness or accuracy and it should not be relied upon as such. Mr. Sinibaldi or ElliottWaveLive (collectively, referred to as “EWL”) are not under any obligation to update or correct any content provided on this website. Any statements and or opinions are subject to change without notice. The content and comments contained herein neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person's investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. 

A more and comprehensive Risk Disclaimer and Disclosure Statements is available within the left margin of this blog site.   

HYPOTHETICAL TRADING DISCLOSURE

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY, COMMISSION AND SLIPPAGE. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED WITHIN THIS SITE, SUPPORT AND TEXTS. OUR POST(S), SHOULD BE USED AS LEARNING AIDS ONLY AND SHOULD NOT BE USED TO INVEST REAL MONEY. IF YOU DECIDE TO INVEST REAL MONEY, ALL TRADING DECISIONS SHOULD BE YOUR OWN.