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

[calven]

Hey guys,

Havent stopped in here in a while. Been busy with the hollidays coming up,working on my website, scheduling , time with family, buying presents etc....hustle and bustle

Love the work that has been going on! DESC looks like a sure thing at this point. I hope to buy some at that 1-4 line. STEM also looks like it could be making a WW. FORD dropped a ton today - over 30%. I think it will hit that bottom trendline, if it hasnt already. I really like FORD once all this selling is done. Could be a good buying opportunity 1-2 months from now.

Glad to see the follower of this thread have grown in numbers. Much thanks to David for including it in the 3sof newsletter...Will check back here regularly after x-mas. Have a merry christmas everyone!


ho- ho- ho
cal 

[Melf Elf]

HOM looks to have the elements of a Wolfe Wave. 

1. After valdating T1 (Trendline 1) on August 18, HOM went on a rip to the upside, which also is our required lead-in to the Wolfe Wave.

2. During the late September to mid-October consolidation, a bullish Symmetrical Triangle (pattern in green on the chart) formed, putting 6.63 IN PLAY.

3. Interestingly, after Waves 1,2,3, and 4 of the Wolfe Wave formed, the November 14 "Gap To Crap" high was 6.60, within three cents of the target (Suggestion: when you get a gap opening like that, very near a target, and very near a trendline as well, take the money.  "Sell into strength.").

4. Also of interest is the fact that, if we shorted the "Gap To Crap" at the top of the Wolfe Wave on November 14, thinking that we might not get the "false breakout" that we often see in a Wave 5, we would have had a problem because we did get the false breakout five days later (and the 6.63 target ended up getting MADE).

We would have had a problem being short because we would have been staring at what appeared to be a Breakaway Gap to the upside on November 21, and HOM was printing new highs.  That's a scary postion to be in, if you're short.

I'm coming to feel that these WW patterns are much better when you do get the false breakouts, or the false breakdowns, because that's where you really get the imbalance that calven has discussed.

At Wave 5 on this chart, anyone buying the upside breakout got it wrong, and the shorts, who were staring at an upside Breakaway Gap at the open and a new high in the stock, and who covered their shorts, covered at exactly the wrong time! 

The proverbial "everyone" was buying, both longs and shorts alike, and "everyone" is caught off balance in a Wave 5 move like this one, if you see what I mean.  I think that element is the key to why we see such powerful moves from Wave 5 to Wave 6, as calven has shown us.  It seems not only to be an "imbalance," but players are caught "off balance."

While the false move at Wave 5 isn't required, I think it's better if we get it for that reason.

5. HOM hasn't gone to the target at Wave 6, (which remains to be seen), but if we had used the low (6.60) of the false breakout at Wave 5 as our "Sell Short" pivot, the gain on the short trade at the recent lows at T1 support would have been as much as 30%.  Not bad.

6. Currently, HOM is finding nice support at T1 and has put in a double-bottom at 4.55-4.56. The last three sessions have been bullish hammers, so it looks like it wants to rally.   If it can hold that T-1 support, then take out the middle of the "W" by printing 5.21, HOM has some "head room" to rally, at least to 5.50-5.54 resistance, or to the "W"-bottom target of 5.84.   Short-term view.

5.50 and 5.51 were the lows prior to the drop to T1.
5.54 is the 50DMA, which has flattened out and has rolled over slightly.

Happy holidays to everyone!
 

[agatto2]

Good call melf.... I see ,,also i probably wont play one of these guys unless we get the false breakout . Almost everyone ive seen hits the mark,, but the ones that dont ( break the trend line ) seem to make the mark only 60 % or so of the time. Where as i have yet to see one that breaks not make the mark( not that they dont ). Sorry for the bad english.

Good trading to ya   tonyg

[nasdaqtrading]

clst

[nasdaqtrading]

clst

fmday

[nasdaqtrading]

clst

fmday

tmta

[fous]

Two Wolf wave patterns:

1st chart: REDF, bearish wolfwave

2nd chart: AXJ, bullish wolfwave

[sebfr]

Hi,

I applaud you nasdaqtrading  for your charts and specially FMDAY...

We have also a double bottom...Good signal for a reverse !

Great great...Two chart pattern !

[sebfr]

Some help....HDY a Wolfwave pattern ? Or not ?
Thanks for your help (my first try with this pattern...)

[Melf Elf]

SLB broke below a Bearish Wolfe Wave yesterday.  The bottom of the WW was 99.20.  The print high on the day was 99.27, prior to the tank to a low of 95.83 and a close of 97.10.

SLB is rallying back toward the broken WW today.  It's currently BID 98.18...ASK 98.20, up $1.10 on the day.

If this is a valid WW, and if it plays out, the downside target is the low 90s.

[agatto2]

ctlm     patience required on this one if you bought on the down slid   

[calven]

Hope everyone had a great christmas! Im back in action again. You guys sure have made some progress in this thread. I'd like to thank all of you for your contributions! 


Also I want to remind you to not search so much for ww's. They are either there or they are not. DESC is probably the best bear WW so far. Some of the WW's posted on here are a "stretch"  - I think CTLM would be an example...

These WW patterns are extremely sensitive. Basically im trying to say that if the pattern isnt blatent, then its probably not tradeable....

Stick to the diagrams and the key points...

1) Correct Trend (and lead in)
2) Symmetry ( the more the better)
3) 12345 points all in channel
4) point 5 is a false breakout (usually) and must re-enter the previous channel
5) points 5 and 6 are tradeable points

6) if its not blatent it will be difficult to trade.

Great work all. I have a lot of applauds to dish out!!!

Note: I am looking to buy DESC at the 1-4 line. It has more room to go....eyeballing the line I would give it another month and a projected entry of 5.50 -

Cal 

[Melf Elf]

Also I want to remind you to not search so much for ww's. They are either there or they are not. DESC is probably the best bear WW so far. Some of the WW's posted on here are a "stretch"  

calven,

That's a good reminder.  I think we're all seeing WWs where they don't exist.   

Stick to the diagrams and the key points...

1) Correct Trend (and lead in)
2) Symmetry ( the more the better)
3) 12345 points all in channel
4) point 5 is a false breakout (usually) and must re-enter the previous channel
5) points 5 and 6 are tradeable points
6) if its not blatent it will be difficult to trade.

Good reminders.  Applause.  For one thing, it seems that we're having a problem with #1. 

Correct me if I'm wrong, Calven, but what I'm trying to do is focus on:

1. Start #1 at the end of a lead-in.
2. If the lead-in was down, start #1 at the end of the down move, and the Wofle Wave pattern also should be down. (QTWW example below). DOWN IS BULLISH
3. If the lead-in pattern was up, start #1 at the end of the up move, and the Wolfe Wave pattern also should be up (calven's DESC example, which I'll post next). UP IS BEARISH

I like therman's QTWW Wolfe Wave.  Upside potential of better than 100% gain to the $6.00ish target area.

What bothers me, though, is that after the false breakdown at #5, QTWW rallied back inside the Wolfe Wave, which looked fine, but then QTWW fell back below the WW.

I'm not sure if we should consider that to be a failure, or what?   

Maybe it's still okay, if we use the low of #5 as a stop? 

At any rate, QTWW rallied back inside the Wolfe Wave yesterday.  It's on my watch list.

[Melf Elf]

DESC: Bearish Wolfe Wave

1. Lead-in was UP.

2. Start #1 at the end of the lead-in

3. Pattern is UP, matching the lead-in, which was UP.

(calven: please correct any of my stuff if it's wrong, or we're really going to be confused) 

[Melf Elf]

SLB - Bearish Wolfe Wave

1. Lead-in was UP.

2. Start Wave #1 at the end of the lead-in.

3. Wolfe Wave pattern is UP, matching the lead-in

4. Upside fakeout at #5

SLB has been a nice short the past couple of days on rallies back to $99-ish, the bottom of the broken Bearish Wolfe Wave/Bearish Rising Wedge.  SLB rallied back to 98.93 yesterday after inventory numbers were released, then sold off again. 

I'd cover above 99.27 and the dotted red down trendline, to protect against an upside Bull Flag breakout.