Benedict Chen

Bought at 1075 and Exited at 1045: 30 Point Profit

The S&P500 hit 1045 today and my  Limit Order was triggered to exit a position I entered on the 19th (5 days ago).  The profit was 30 points, the trade being from 1075 and exit was 1045 to complete a Wave-C correction (zig-zag type) that was the same length in size as Wave-A.  This seems to be a high probability strategy with the rewards greatly outsizing the risk in proportion.

Gann Date: August 20. C Wave to Begin and hit 1045.

It appears that the trend has already begun to change from the “zig-zag” B-Wave to begin the C Wave in the markets.

If my estimates are correct, we’re looking for this to terminate at about 1045.

It appears that both the Nasdaq and the S&P500 are closely related in terms of price movement with little variation.  No surprise there as the S&P500 covers about 75% of all publicly traded companies in the United States.

Gann Dates for the NASDAQ for April 23, 2010 High

July 24, October, 23, January 23, August 23, Dec 23, September 16, November 29.

Bull Market for 4 Days Until August 20th, 2010

Going by the Gann Dates, the trend has most likely changed and a bull market has ensued.

This will likely continue 4 days until the 20th of this month and then proceed downward again to continue the C Wave downward.

I got stopped out because my stop-losses were too exact.  In futures, the contracts are highly leveraged and unusual spikes will occur that don’t show up on the close of the time period (daily or hourly).  My stop losses were about 2 points too tight and I was stopped out.  I re-entered long and I will likely exit in 4 days without any clear idea of a price target.

Prices Reached Expected Targets (1127 and then dropped to 1075)

It appears that my predictions that I previously wrote about were achieved with a good margin of safety.  Unfortunately, because I’m trading with a grossly under-funded account, Tradestation did not allow me to trade overnight and I can only use day margin rates.  Had I been allowed to participate in this trade, we would be looking at a profit of … 1127-1075=48 Points.

At this point, I know that the Gann Dates are correct and my analysis of the markets is accurate.  The next thing to do is to use a properly funded account for trading.

I’m  really beginning to hate Tradestation’s policies.  I’m caught on the sidelines watching my perfect positioning and planning go to complete and utter waste and HUGE amounts of profits slip out of my fingers because TS won’t let me trade off hours.  This vexes the hell out of me.

As I write, Wave 1 and 2 have finished…Wave 3, the BIGGEST and most prominent wave is just beginning to establish.  And I’m caught watching it all happen.

ABCDE Triangle Following with Down-Trend

If my previous Gann calculations are correct, the next 3 days will entail a MAJOR trend change.  Here are the dates of major change:

August 5-8, then August 14-20

September 3-10, then 21-28

October 7 to 14, then 21-30

November 5-10, then 20-30

December 3-10, then 15-24

I’ve been flipping through my notebook and looking at my Gann dates that I created last year.  It’s been quite accurate (quite shockingly) in predicting the changes in trend.

Major Changes:

Based on the Major Bottom at 11/02/2009
90 Degrees: Feb 02
180 Degrees: May 03
270 Degrees: August 03
120 Degrees: March 04
240 Degrees: Jul 03
144 Degrees: March 28
216 Degrees: Jun 09

If this is correct, today should be a major trend change and I plan to trade off it.  As of this writing, an extended Wave 3 has formed and the 5th wave is finishing soon.  It should be the same size as Wave 1, which is roughly 10-15 points to hit 1123-1128 (around there) before possibly dipping down on a downward trend to finally hit about 1025 or so.

Let’s see how accurate this stuff really is!

Beginning of a Downward Trend?

Dumbfounded...

This trade went against me after I was WAY up only to come back to check the trade and finding myself completely on the opposite side of the market.

It bounced on the Wave 4 level, which I’m guessing acted as a floor.  What’s going to happen next I have no idea.  The market is taking off with such steam that I just said screw it and went in with it.  Let’s see where it takes me.

I can’t figure out why the triangle’s distance was not met.  I guess things only work most of the time and not every time.  The funny thing is that I was ahead several times by a large amount.  This has happened to me at least 3 times in the past couple of days where I would have ended up way ahead if I just took a profit.

Reset my account with Tradestation…again.

We’re back in the game and unfortunately I couldn’t maximize the opportunity as I was perhaps 10-20 minutes too late to squeeze the entire lemon.

I am not totally sure where exactly to measure the size of the triangle.  If I measure from 1110 – 1090 = 20 points.  Then subtracting 20 points from 1090 would be about 1070 for a Profit Target.

Let’s see how the trade goes…

New Pattern Forming - Descending Triangle

I was up almost 5 points earlier in the day and I opted not to exit.  I later find that this pattern emerges during my long position.

It appears to clearly be a descending triangle and a clear sign to exit the market and play a short position.  This is good for about a 15 point drop or so.

As of this writing, I have yet to exit my position and change direction of my trade.  I am waiting for the market to climb up a bit before I exit my position and possibly enter again short in anticipation of a 15 point drop.

New Target = 1075

Will probably occur in about 7 hours or so.