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Tuesday, February 28, 2017

Declaring Victory over the rigged market

Declaring Victory over the rigged market 

I'm declaring victory, because I've finally achieved what I couldn't have achieve in 2012. At that time the market was testing Dow 14,000, and threatened to break out to all time highs, and it wasn't until early 2013, when the market broke out, that I finally got bullish. This was about the time I came up with primary wave "(D)" theory, when most bears still believed that we were still in a dreadfully bearish primary wave (2). We've since taken out that P/D target - by nearly 2000 Dow points, and I'm now considering an alternate primary wave (3) target.

No one is more bearish than I am, but by simply following the trend, identifying key support, and measuring fear (or lack there of), I've avoided previous mistakes, and I hope to have achieved what every market technician strives for, consistency. Only time will tell, if I'm there yet.

I'm sure many bearish traders find themselves in the same position that I found myself in 2013, but this is all part of the learning experience. Never give up.

Over the past several years, I've learned to consider both sides of the trade. I chart everything, and several alternate outcomes at once, before determining which one is correct. Learning how to read the $VIX has a lot to do with it, but so does having a better feel for the market, and understanding that markets are cyclical, and this only comes from years of experience. Even though I'm certain the markets are rigged, I know the game. I plan to identify that game in a future vlog, but I can never seem to find the time....

You gotta trade the market you have, rather than the one you want.
There are times when it's better not to trade. If you find that you can't walk away, and always in a rush to make a trade, you're more of a gambler than a trader. How much money has been lost trading Oil as it continues to trade in a tight range over the past several months? Don't get stuck trading one thing. There's always a market somewhere else.

Finally you must separate emotion from your trade. Otherwise you're no different than the folks standing around a craps table, rooting for the come line, and headed for the next bust. I watch the market like a hawk sometimes, but other times I'll tune it out. Trading isn't supposed to be exciting.

Yesterday's trade perform flawlessly (that's nothing), but I've remained mostly bullish ever since July, and even going back to the Feb 2016 low, where I was already calling for new all time highs, when most bears were looking forward to the next crash. Not a difficult call.

Even on election night when market futures were seen crashing... I called it, "a golden opportunity".

Most recently we're seeing the market run out of steam, and many charts have becoming toppy. That's not to say we can't take out the highs one more time (speaking intermediate term), and until we see more fear in the $VIX, I'm only expecting another pullback.

Until we see real downside momentum, and by momentum I'm talking about 500- 1000+ point down-days, well above $VIX 20; we're not in a bear market. Anything less than a full blown crash points to just another pullback in a bull market. Tops tend to be rounded, unless you're deep into a bear market, tops take time to form, and even the first leg down - in a bear market - is going to be bought like a pullback in a bull market. Until a bear market can be confirmed, or key support breaks, stay nimble; selling the rips, and buying the dips.

Momentum and acceleration is everything: 
Momentum is the key to identifying Elloitt Wave's. Wave 3's (like wave C's) are typically strong, and extend further than expected. Knowing this makes it easy to identify where we are in the wave count. Wave 4 should chop sideways to down for a while, and that's what we're seeing.

Even today we see the market holding up quite well, and that's a tell. Feels like another pullback, right? My best guess is sub-minuette wave (b) of d, in a developing broadening triangle pattern.

The global markets are headed for collapse; but not at this time.

To prove it; I've re-published my public stockscharts page (also linked in the side menu), entitled "3Xtraders 2.0 Charts of Doom", showing global markets topping out (struggling).

Of course, if you know how to trade a bear market, no worries.  In fact I'm looking forward to it!
But In the meantime I'll declare victory.  

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