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Friday, March 16, 2012

Everything's Coming Up Crabs: March 16, 2012

ORIGINAL POST:

You can go whole days, even weeks without seeing very prominent harmonic patterns (Gartley, Bat, Butterfly, Crab being the most common.)

So, it's really creepy to see just about every index I chart complete bearish patterns -- all at the same time.   I take this as a sign that we've reached an important top, though I'm not sure if it's the end of Minor 2 or a smaller subwave.  In any case, look for a significant downturn as soon as the usual OPEX nonsense has passed.

In no particular order, here you go:

COMP
DJIA
SPX
RUT
I'll post more after the close.

19 comments:

  1. If DAX closes up today that will make 8 days in a row. Going back to check the last time this occurred and whether it was a significant top.

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  2. I have been around for years and have never heard of these patterns that you name above.
     

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  3. No worries.  I hadn't either until a few years ago.  And, that was after 20+ years on Wall Street.  If you're interested or just harmonic curious, here's a good place to start:

    http://pebblewriter.blogspot.com/2012/02/gartley-patterns-explained-february-28.html

    I'm in the process of building out a new website that will explain and give examples of the different patterns, along with trade signals based on charts of same for the more common indices.  

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  4. As a chartist, I am sure you are quite excited to see multiple crab patterns finishing at the same time which kind of confirm one another. But I am sure you will be even more excited if/when we see the major reversal off those crab pattern lines, right? :-) I know I will. By the way, what will be a possible downside target for these crabs??

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  5. Pretty close to my OPEX guess of 1400...anyone else in the ballpark?  I thought I saw a 1410 as well...Have a great weekend all.

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  6. Unless something pretty crazy happens in the next 30 minutes, you're in the driver's seat at 1400.

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  7.  This is a good start.  But, yes, many more actual reversals would be nice.  Usually look for .618 of the AD distance, but that's not cast in stone.  Depends on so many other things.

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  8. Contest results at:  http://pebblewriter.blogspot.com/2012/03/contest.html

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  9. Hmmm... have to think about that one.  Although, I have used it with my wife in suggesting she use seasonal adjustments when evaluating whether I should work out more often (does jogging back and forth to the fridge count?)

    Contest results at:  http://pebblewriter.blogspot.com/2012/03/contest.html    Would love to do more of these.  Give me your thoughts.

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  10.  More ideas on contest.  How about simulation trade.
    Simulation trade is the most typical in school.

    Example, if you are given $10,000 fictional money, how would invest and what is the result in a time period, such as a month or 2 months?

    Perhaps you hear Apple can only go up and it is going to $1200 within a year, you spend your $10,000 on Apple stock.

    So, Mar 16th:  (Simulation) purchase 17 shares of Apple at $585.57. Net is $9954.69
          Apr 16th:  What would be the balance of 17 shares of Apple?


    Or you are very conservative, you buy Apple stock with insurance.  You want to hedge your Apple stock with PSQ. (inverse of QQQ- Nasdaq 100)

      Mar 16th:  (Simulation) purchase 10 shares of Apple at $585.57. Net is $5855.7
                      (Simulation) purchase 158 shares of PSQ at $26.1.    Net is $4123.8

       Apr 16th:  What would be the balance of 10 shares of Apple and 158 shares of PSQ?
     
    etc.

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  11. Thanks PW...nice write up as well, but alas, I was merely throwing darts at a board rather than using any stock picking talent.  Let me know if I need to do anything to "claim my prize" once you have the new site up.  Looking forward to it!

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  12. Pebbles, you like have this one if it is valid, but was wondering your thoughts.

    http://i835.photobucket.com/albums/zz279/SoulJester/DAX_Bat_Pattern.png

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  13. Looks good to me, SJ.  Thanks for the input.

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  14. PW, are these harmonic patterns, Gartley, Bat, Butterfly, Crab are all bearish paterns?

    You  illustrated Gartley Patterns in your Feb 28th post.   http://pebblewriter.blogspot.com/2012/02/gartley-patterns-explained-february-28.html 



    However, , the charts you show in Mar 16 post are not Gartley.   As you describe, they are crabs patterns.   So, Gartley and crabs point to the same bearish outcome?

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  15. These are all bearish, as they call for a downturn after the last upward (CD) leg.  Bearish patterns, therefore, resemble W's, while bullish patterns resemble M's.  The main differences between Gartleys and Crabs are the Point B's and Point D's.  The Gartley requires a .618 Point B retrace, while Crabs can go up to .886.  And the Gartley point D is at .786, while the Crab is 1.618 or higher (2, 2.24, 2.618, etc.)

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  16. Interesting.  Thanks!  It seems like the higher it goes up, the further it drops.  
    For Gartley, after point D, the downtown leads to a drop at even lower than pt C.
    If Garltey can retrace point D at .786, while the Crab can retrace at 1.618, it means the Crab can go higher as twice as much as Garley for point D. But the the drop after point D wil be twice as much.

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  17. Thanks for the help Pebbles.

    I am as certain as can be that we are either (1) in a large triangle off the February 2011 high that will last all year (prolly an X wave), or (2) we gonna get 5 down to the October 2011 lows (possibly as low as July 2009 pivot area) and this is also potentially an X wave.Nothing else makes sense as they left structural breaks and wave 2 triangles off that October 2011 low to help us.

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