So I see that the Fed Chair Powell just bowed down to the USA President and hinted that he might not rise rates again this year and might slow down the rate at which he would raise rates in the future if the current state of the economy continues? Well, if you read all the noise...I meant news about it, you would believe that this breaking news is what sent the Dow soaring and up over 600 points in a day. Well, if you are in the camp that thinks that, then of course, you could not have placed any BUY orders until you heard the news and knew it to be true, right?
What you should notice is that I issued a BUY on the Dow a week ago! This is WAY before anyone could know anything about what Powell was going to say! I can tell you that I do not have any clairvoyant abilities and cannot see the future! If I could, I wouldn't be trading! I'd be stealing! But unfortunately, I don't have superpowers!
Nonetheless, I saw this rally coming way before any news came along that would spike it. Did you see it coming? Was it just "dumb-luck" that I issued that BUY trade to my followers a week before this spike?
Its not that I hate fundamentalist who claim that wave counting and technical analysis is horse-pucky. No. I know some great fundamental trader's and am good friends with them although we do argue the virtues of both. To no avail of course since this is an age-old argument that has been going on for longer than I have been alive (and this old fart has been alive a long time!). So I'm not going to be the one to settle this argument. I just bring it up to let you all know the power of wave counting and what it can do for you IF you know how to use it and more importantly, how to apply it to your trading. It works wonders for me as you can tell.
So onto the chart analysis....
So basically, I trade whenever the price action of the markets I am following does what I project it to do or at least in some way close to it. By doing that, I am trading in tune with my wave analysis and not "forcing" anything. When you trade "in tune", you get the sense that "things just feel right" and that you aren't struggling against the tide when trading. It's a euphoric, confident feeling to have when you are trading. And the only way you can get "in tune" is to be patient and watch the price action unfold and see if it is doing what you project it to do. If it is, then you start looking for entries.
This is how I have been feeling about the Dow and the correlated S&P all year long. Trading "in tune". Some call it "trading in the zone". Well, whatever you want to call it doesn't matter. What matters is that it brings in the profits! And this year in the indexes, we've reaped BIG rewards. So in this chart of the Dow, you see that the second high point here on this 4HR chart I labeled the end of the wave (X). It dropped from there. To which, full disclosure... I missed that drop although I did predict it. It just moved way too fast for me to get in.
So that drop ended and I then labeled the end of that wave down from that high a wave W. Which of course can only mean that the wave X was to follow. Knowing that wave X's are 3-waves, I began to look for those 3 waves to develop. PATIENTLY WAITING! I watched and waited as the wave (w) and then recently the wave (x) both completed. Which of course that can only mean that there was to be a wave (y) back up that MUST HAPPEN. So when price action setup a good trading opportunity, I pounced and issued that BUY order out to all. And now you see that results! Did not depend on any news to get where I am now.