Jan 312014
 

There have been a few requests for publishing a record of the trades that the members of the Exclusive Club shared. The following is the complete list of the trades closed in January 2014. As you can see, I am very selective about the trades. The aim is to become rich slowly! WaveTimes is used by members as a supplement to their normal investment and trading activity. And because we are willing to be patient, we are successful most of the time. In January 2014 it was a 100% success rate.

Here is the link: http://tinyurl.com/WTJan2014

Jan 282014
 

You would have heard about the disappointing news from Apple. Wonder what Elliott Waves tell us about the extent of possible downmove? Take a look at the chart below. In after hours trading on Monday, the stock was already around $506. There is some mild support around 503, but think the correction of the sell off will probably come from around 497. Later on, though, we will see the decline continue to around 485. You may wonder why I have chosen to label the just completed rally as a C wave and not a 3rd wave. As you probably know (especially if you are a member of the exclusive club), our goal is to make money from the markets using Elliott Waves. Hence, I am flexible with the wave counts. However, take a look at wave B. If that was wave 2, it is a deep correction. So wave 4 should be a shallow correction, finishing near 503 and rallying again. This could still happen, but I doubt it. Too many people have been hurt by this surprise, and in any case, the broader market is looking decidedly cagey. Will investors pile on to snap up Apple stocks at 503? They will do so only if they think this latest earnings report is a one-off bad number. But many people will begin to suspect that the future is more uncertain than what they imagined last week! And that is only going to pressure the stock in the near term.

Jan 092014
 

Raw sugar trading at 3-1/2 year lows and traders are panicking. Technically driven selling and stop loss orders have been driving this soft commodity lower and lower since peaking in 2011 at a 30-year high. Can Elliott Wave analysis help the particpants in this important market? Sure. Take a look at this article that I contributed to Forbes yesterday.

Jan 072014
 

Twitter (NYSE: TWTR) has made some fantastic gains since its IPO in November. What is the outlook for Twitter? Has Elliott Waves been effective in trading this stock? Answers for these questions are found in my latest post in Forbes. Check it out.

Jan 062014
 

A few weeks ago, when Facebook shares were trading around $48, I had posted an article on Forbes saying we will see Facebook at $58.73. There was an immediate challenge of picking a short term low for the fourth wave, with one possible level being 47.40. But this was supposed to be a complex correction and it allowed further mild weakness before we went higher. And sure enough, after dipping to a low of $43.55, Facebook went roaring back to a high of $58.58. How high can this go, and what is the prognosis after we complete this up move?

Elliott Wave Analysis of Facebook

Elliott Wave analysis, as explained in my book ‘Five Waves to Financial Freedom’ is very effective to determine one’s trading and investing tactics. We know that the fifth wave can be equal to the first wave, and if you look at the first chart below, you can see why we got a quick sell off from near 58.60. The reason was many professional traders who know about the power of Elliott Waves would have sold near there. But there is also the underlying human emotion that giverns mass psychology. The general public is not so easily put off, as they still see buying opportunity at every dip. This is what culminates into a fifth wave.

Facebook Wave 5 equals wave 1

Facebook Wave 5 equals wave 1

 

Target for Facebook Fifth Wave

There are two other ways of anticipating the target for fifth wave. We can compute a 38.2% or 61.8% measure of the distance from the start of wave 1 to the end of wave 3. Occasionally, we can also see it finish at the 50% measure of this distance. the measure so computed is added to the bottom of the fourth wave to get the potential target for the fifth wave, and doing this as shown in the chart of Facebook below gives us the potential turning points. But first, take a look at the subwaves of the fifth wave in the higher degree. You can see that the 3rd wave had extended to reach 300% of the first wave.

Subwaves of Facebook

Subwaves of Facebook

 

Where will Facebook finish its fifth wave and outlook for the stock

Typically, when a third wave extends, there is a higher chance for wave 5 to reach the 61.8% target. However, as always, it never pays for an investor to wait till the very last cent!  So, I would suggest exiting all longs from near 59, and to start turning cautiously short, selling a larger amount as we get above the $62 mark. Because we will now be correcting not just the fifth wave, but also the entire five wave movement that started from below $18, you should expect the correction to be quite significant. At the very least, I expect the correction to last over 3 months, and the price to decline by at least 15%. Having this kind of expectation is possible only with the deft use of Elliott Wave Principle. You too can profit by mastering this theory and start taking low-risk trades. Good luck.

Lookout for a correction of 15% or more from around $60

Lookout for a correction of 15% or more from around $60