The Wolfwave Pattern / Why walk with bulls - run with the wolves!

[Melf Elf]

Here is a wolfe wave setup:  Points 1, 2, 3 and 4 are already setup.  Point 5 looks like it may be coming very soon. 

thai,

Nice work.  Applause. 

I was looking at SVA from the standpoint of a possible Bullish Gartley. If 4.82-4.85 support doesn't hold here, it would be interesting if we decline to your Point #5 and reach 4.34 and hold there, which would be a symmetry of both price and time. 

If that occurs, and SVA holds near 4.34 and rallies, that would complete your Wolfe Wave and also complete the Bullish Gartley.  I'm not sure if this is a valid Gartley since the ratios weren't quite right.
Just something to watch for if SVA continues to decline here.

[Melf Elf]

calven,

On the Wolfe Waves, I'm confused about where to start them.   

For example, thai626 began his Wolfe Wave for SVA prior to the top (see his chart near the bottom of page 2 in this folder).  On his chart, the top in SVA is labeled #2.

On your NASDAQ Composite chart, your point #1 starts after a top in August, so my question is: Are the any rules about where to begin the Wolfe Wave?  Should they begin after a top or bottom is put in, or can we start them anywhere we want, as long as we have a reasonable slope, symmetry of price and time, etc.?

Thanks, and applause for all of your efforts in this folder to help us understand Wolfe Waves and Gartleys..  Interesting topic. 

[Melf Elf]

Here is another article by the same writer not this topic but a method to change settings on an indicator.

Timing Trades With The Commodity Channel Index

http://tinyurl.com/bpo2n

metro,

Thanks for the links to Wolfe Waves, Gartleys and The Commodity Channel Index.  Applause.

That was interesting, for The Commodity Channel Index, to take the time between two highs or two lows, then divide it by three.  I'll have to play with that one.

[calven]

So many comments/questions I dont know where to begin.

First off, SVA is NOT a WW yet. SVA does have the potential to become a WW though. One important aspect of the WW is that points 1-4 exist in a channel, then point 5 DIPS BELOW THE CHANNEL. I want to stress that point. The WW is largely based on an unbalanced situation between buyers and sellers. Point 5 is representative of an overbought or oversold situation. In the case of the COMPX, the move below the channel created by points 1-4 was the key identifier for the WW. Once the compx dipped and broke back into the channel the pattern was confirmed!

There is NEVER a WW until point 5 occurs. A dip below the bottom or top channel lines at point 5 makes the WW that much more credible....althought the WW can possibly occur without the "dip"

To answer the second question. WW's CAN start any time. They do not necessarily have to be at the top of the first run up..... if you have doubts find point 5 and count backwards.

As I said earlier, the hardest part of this is identifcation. Once correctly identified points 5 and 6 are easy to trade!


That gartley looks good! 

Good luck guys! 
cal   

[calven]

Here is another article by the same writer not this topic but a method to change settings on an indicator.

Timing Trades With The Commodity Channel Index

http://tinyurl.com/bpo2n

metro,

Thanks for the links to Wolfe Waves, Gartleys and The Commodity Channel Index.  Applause.

That was interesting, for The Commodity Channel Index, to take the time between two highs or two lows, then divide it by three.  I'll have to play with that one.

The author of that article is also a member of this 3SOF community. I'm sure you could PM him if you have questions/comments. His user name is: "kuepper"

cal 

[akclide]

Hey Calven,
            KOMG.  The chart is not perfect,but looks like a wolfwave to me.If that is true than we have may have a reversal situation here.Since I have read about wolf wave , I make it a point to go through about 300 charts everyday looking for a WW.Thanks for you help

[thai626]

First off, SVA is NOT a WW yet. SVA does have the potential to become a WW though. One important aspect of the WW is that points 1-4 exist in a channel, then point 5 DIPS BELOW THE CHANNEL.

There is NEVER a WW until point 5 occurs. A dip below the bottom or top channel lines at point 5 makes the WW that much more credible....althought the WW can possibly occur without the "dip"

As I said earlier, the hardest part of this is identifcation. Once correctly identified points 5 and 6 are easy to trade!

Hey Cal,

I agree with your assessment.  I should have worded my analysis a little more clearly.  I didn't say that SVA was a wolfewave yet but rather a setup for a wolfewave pattern.  Like Melf Elf said in one of his posts, this potential wolvewave pattern along with the Gartley is something to look forward to IF the support line does fail.  All I know is that I'll be buying more once i get confirmation at point 5.    I would not buy until there is some bullish indication has taken place at point 5.

Melf Elf, thanks for the Applause......I would give you one back for your catch of a Gartley pattern but unfortunately my rating is too low to give you any appause.    I'll just say "good work"!  Looking forward to learning more from you from a technical analysis standpoint.

Thai 

[Terliso]

Hi calven
Would you call this a wolfwave pattern. I don't have charting membership or software so I'm not able to draw the line and write on them.

Yes you can Wrangler.. you can use the "PAINT" program that already installed in ur computer to draw lines to the chart & even write on them..goodluck

[agatto2]

So cal is this a ww pattern   frk   on the way down   

I drew lines but dont know if its correct ,,,, im still having trouble with a starting point.

[agatto2]

opps no    lol   ,,, down slope is bullish         ill get it , ill get it , ill get it

[calven]

Nope that is not a wolfwave. You have to match the right trend to the right pattern...

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KOMG looks good! (applause for finding that!)

cal

[ScottishTrader]

OK Calven, NOW I think I got one

Only problem is that it has made its target - we need them at point 5!!  This one is BellSouth:

[calven]

Yeeessss!!!!!!

AWESOME WORK BOTH OF YOU!!! You got it~!  (APPLAUSE)

Now saffey, the "trade-able" points are 5 and 6. In theory you could buy at point 5 and short at point 6. If you bought at point 5 the target would be point 6 (connect 1-4). Since 6 is also the target from point 5 theoretically you could short there as well. (shorting isnt for everyone thoug) I prefer to buy at point 5. As you hinted at, we need to find  some at point 5. They are very hard to find but once you do, the pattern is extremely profitable. I was hoping that with the creation of this thread we could all contribute to finding WW's at point 5 so we could buy..

Thanks guys!

[ScottishTrader]

Nice - I was pretty sure I knew what I was looking for anyway, but the main problem is that they are damn hard to find!!  Interesting about the false breakoout - BLS shows exactly the same thing after point 5.  May also be a buy point to look out for!!

Thanks for all the input Calven, many applauds for your sterling work here

[Melf Elf]

Applauds to calven, The Scotsman, Tony (agatto), thai626 and akclide.  I think these Wolfe Waves are starting to sink in.   

I can see why the "false break" at #5 that calven keeps stressing is so important, and also can see why the move from #5 to #6 in his NASDAQ chart and in akclide's KOMG chart are so powerful, and so difficult to play.  The rallies from #5 to #6 (or declines from #5 to #6, if it's a bearish Wolfe Wave) are nearly parabolic in nature, so very difficult to "hang in there" for the ride.

I'm going to use calven's NASDAQ chart for a "walk through," and calven, please correct me or add anything to this since you're the expert here.

Suggestion: Go down to the bottom of this post and move the scroll bar all the way to the right for easier reference.

1. The decline from the August high was a bullish channel IF it broke out to the upside.  It didn't.  It broke to the downside on October 11, setting Bear Trap #1 (or "false breakdown"), meaning that we're "trapped" into thinking that the resolution is BEARISH.  We either sell our longs there, or we even short there.  And, we do it almost exactly at the wrong time.   

2. After the break of the channel, the NASDAQ also broke horizontal support of 2039 on a closing basis, setting up Bear Trap #2.  That looked awful at the time.  We were at new five month lows, and that break caused more selling, and more shorting.  EXACTLY at the low. 

3. From the break of 2039, we got a three day rally back to the broken channel, and the rally failed right there.  The fourth day, October 18, was a black candle that reversed almost the entire prior day's trading.  That set up Bear Trap #3: former support at the bottom of the channel was now resistance, as it "should be," and normally, we "sell at resistance, or short at resistance."  But, it didn't work that time.   

4. October 19, THE 3 BEAR TRAPS GOT SPRUNG!!  There was a gap down opening, and then a big white candlestick that took out the prior day's high (Entry #1), and also closed back inside the channel.

5. The first rally failed at the 50DMA, and we came back to the bottom of the channel.  We even closed below the channel, slightly.  That really should be Bear Trap #4 right there, because it looked like the rally off the low to the 50DMA had failed.

6. Long Entry #2 could be anywhere near the high of the next day, or the following day, on the takeout of the high of the October 27 black candle. 

7. If you look at the chart from that October 27 low to the recent highs, it's pretty parabolic.  Same with acklide's KOMG chart.  What helps me to understand that, is what calven said about balance/imbalance.  The proverbial "everyone" was caught off balance on that dip to the low at #5.  Many players sold longs on breaks of support, or shorted it. 

8. The upside breakaway gap out of the channel on November 3 not only brought in new buyers, the shorts were forced to cover.  And, if they kept shorting the rally, they continually were forced to cover at higher prices, helping to fuel the rally to point #6.

Observations:

1. Identifying Wolfe Waves: we're basically looking for Bull Flags/Bull Channels (or Bear Flags/Bear Channels) that appear to have "gone wrong."  Broken in the "wrong" direction.  That's why calven keeps stressing the importance of the "false break" at point #5.

2. For an entry, personally, I'd wait until price regains the broken flag/channel.  Otherwise, if we jump in at #5 and it isn't a Wolfe Wave, we might have caught a falling knife (that break of 2039 support could have gone the other way, and seriously tanked to the downside).  Wait for the low to get put in, and use other indicators, as calven suggested.