I agree trading theEW can be challenging, in part because you can have vailid, but different wave counts. Robert Prechter of EWI has the spy in a wave C of 2, beginning a new wave primary wave 3 down. Arthur Hill of Stock Charts, has the spy finishing a wave 5 of 1 of wave 3 up. The intermediate trade is the same; a corretive wave 1 of 1 down or wave 2 down of wave 3 up. Both interruptions agree that the following wave up will take us from 1200 to 1300. The spy direction beyond that point will tell us which interruptaiion is correct.

I have found that the 10 day ema is an excellent proxy for the minor wave up or down and the 4 day ema, the same for the minuette waves. You trade up or down, when a new minor wave begins as manimfested by a 4/10 day crossover on the daily chart. During the past year, this system had an  expectancy pg 90 percent when trading the spy. This can be done using calls and puts or the spy moving up and the sds down.

Good trading,

Bob James

I agree. This appears to be the completion of wave of 5. I am looking for a wave 4 up this afternoon. The 5 min X graph looks to be setting up for a good wave 4 up countertrend rally call.

Bob

It appears that we are finishing the 5th wave  of wave of the third wave down. I am looking for a wave 4 move up begining this afternoon.

Bob

Technical review:

Today you had the 50 day ema crossing the 200 day ema. This is usually an indicator for the mutual funds to begin selling a stock. In addition, the stock has a bearish flag pattern on the daily chart with a measured move of $20.00. The point and figure target is $60.

Fundamental review:

The recall of 8.5 million cars to repair accelerator pedals and breaks, increasing inventories, declining prices, 44 class action law suits, Fed grand jury and SEC investigation, possible fraud and racketering, Congressional hearings this week, and damanged reputation for quality, will result in falling sales, profits and stock price. I see a price of $60 dollars by March first and a decline near $40 (secondary support) when the analyst finally pull the trigger and downgrade the stock.

I like the March $70 puts.

Good trading,

Bob

Happy Thanksgiving from Sonoma county, california. The wine is great but the weather is dank. Thd daily stochastic trending overbought/oversold ratio indicates that we are close to overbought position and consequently a correction should occur in a few days. Gold is in a daily overbought position and is ready to move downward, probalbly tomorrow or Monday. Trade and live well

The Ag stocks that were posted on the weekend blog have confirmed and should, based upon historical patterns have a singicant rise.

Listed Stocks:

POT, AGU, CF, MOS, MON,SQM

jim_jim

See privious post. Tnh is a W%R hammer trade as well. Remember, you buy it on Tuesday if Monday's close is higher than Friday's. Your stop loss is the bottom of Frday's Hammer.

Additional W%R Hammer buy setups are:

POT, AG, AGU, TRA, TNH, BG, and MOS

W%R Dolgi buy setups are:

LNN, CF AND MON

I hope this is of assistance.

Happy Holiday.

Droption

Deep retracements in the metals, coal, agriculture and oil are providing some interesting reversal patterns. Some of which include:

Pot

W%R reversal with a strong daily Dogi pattern. This pattern has resulted in an average increase of of $ 37 dollars per trade during the past six months. You enter once the price target exceeds the higt of today.

Agu

W%R reversal pattern with a stong daily Hammer pattern. During the past six months this pattern has yielding an average return of $ 20 per trade.X

X

W%R reversal pattern with a strong Dolgi pattern. This pattern has yielding an average return of $ 22 duting the past six months.

Pcx

W%R reversal pattern with a strong Hammer pattern. This has yielding an average gain of 41 dollars per trade during the past six months.

To our collective success,

Droptions

Matt,

What do you think of TSO and the dramatic increase in July 22.5 calls(63,000 contracts today).

Bob

Large caps that continue to look strong are:

CNQ, HES, NBL,OXY,PBR,PXP,SU,UNT,DNR. They are wave 3 buys with strong convergence/divergence signals and a 20-40 point figure price target.

Interesting small caps include:

Bexp, egy, royl,sutr and fpp. I have exited mxc and pdo.

Good trading.

Dr. Joptions

Picks for 5/21/08

Large caps:

cnq, hes, nbl, oxy, pbr, pxp, su, unt, dnr, oxy.

These are wave 3 double convergence/divergence buys with a point and figure price target of at least 20 dollars above todays closing price.

Small caps:

BEXP, EGY, ROYL, SUTR.

My picks that were posted this weekend are now over priced:

PDO, MXC, SOLF, AND CKX.

Good trading my friends. I appreicate the great dialogue, and recommendations.

Dr. Joptions

Title: Wave extensions

Sgy, schn, nue, pdo, drys, apa and pdo continue to make nice moves to the upside.

Are Pot and CF forming bull flags.