4xForecaster

Deja-Vu: Wolfe Waves In #nikkei | $jpn225 #BOJ #forex $JPY

FX:JPN225   Nikkei 225 index of Japanese listed shares
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Friends,


Recently, we entertained a lot of conversation on market geometries, more specifically in discreet geometries that easily come to the eyes, and others a bit more buried in the occults. Of late, we spent some time reviewing Wolfe Waves patterns, which offer the pattern trader that "next level" of market geometry complexity, given a set of rules that are really quite simple.

Looking at the Nikkei, I had a sense of deja-vu. In fact, I even had to look up what this French expression would translate into Japanese - Wike says: "dejavyu" - Again, another sense of deja-heard. But it's just me.

The chart itself comes very a-propos considering the topic of market symmetries and now Wolfe Waves, as a near perfect symmetry is setting up over the months ahead.

First, at the bottom right of the chart, a Wolfe Wave (arguably, a Diagonal Triangle of the Ending type for the Ellioticians), completed the prior abysmal descent through a Bullish type of Wolfe Waves pattern ("WW").

That completion was signaled at the point (circled in GREEN in the chart) when price crossed over the upper boundary of the WW. As price rushed into the blue yonder, it coursed its way all the way up to its 1-4 Line, which is customarily known as its Profit Line.

Note how the current Bearish WW is setting up.

A quick note on the contents of the chart: You will notice that the words "tunneling" and a long rectangular feature within each of the patterns. In prior lessons on the WW, I would ask traders new to the pattern to add a measure of assurance that the pattern they are looking at is indeed a WW. And this is simply done by looking for a pathway which appears in most WW patterns, as if price had moved out of the way to allow for the safe passage of the 1-4 Line. This feature, although not mentioned by the author of the WW (Bill Wolfe), is a signature trademark that I would be looking for to ensure that I am seeing what I need to see, sort of an obligatory deja-vu ... Again.

Feel free to visit the "Predictive Analysis & Forecasting" Room where many occult geometries are discussed, along with trading pearls and other less-public sanities - Here is a link: https://www.tradingview.com/chat/#5eHLst6YxeVqGlaO .

Cheers,


David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA


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Amazing, really clear WW patterns, displaying the rule you were talking about before.
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Aren't you concerned by the "mother of all resistances" who could break and give a strong bull rally, summing it to the fact that Nikkei index is lagging ~20% behind other indexes?

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4xForecaster PRO J.Livermore
2 years ago
@J.Livermore - Very impressive trendline indeed. Not sure how it would interact with it, except perhaps by maintaining that same symmetrical theme. The symmetry here could be achieved by a winding around it as it did to the left, then rolling, sort of a barb-wire configuration. Again, I have no idea in relation to this sturdy trendline. As with other things, I'd like to see how it all looks like once it's all done and said. For now, I'd wear a helmet, because this is one serious I-beam.

David
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Sandeep_Gupta
2 years ago
Please comment on it.
Wolf wave
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4xForecaster PRO Sandeep_Gupta
2 years ago
@Sandeep_Gupta - Excellent! This is a great find, and the target is very well defined, at its horizontal of 1-4 Line. Remains now to be sure that this is a reversal point.

Now, to be precise, I would mark 5 along the 1-3 Line, right at the midpoint where the red candle falls (about the 5th candle behind the one you marked as 5), and I would mark the current 5 as 5-prime, 5'.

Then, I would take a parallel line of 1-4, and make it start right at Point-3.

IF indeed, that translated 2-4 Line starting at Point-3 ends up touching the tip of your 5', then you confirmed the 5- position.

Is this making sense? If not, I would be very happy to draw it for you.

David
+2 Reply
IvanLabrie TOP 4xForecaster
2 years ago
Wolfe's sweetspot line?
+1 Reply
4xForecaster PRO IvanLabrie
2 years ago
@IvanLabrie - Exactly - David
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4xForecaster PRO 4xForecaster
2 years ago
Patterns about out there. If you think of pattern as you would think of letters coming into vocabulary, and words fitting into sentences through grammatical rules, and paragraphes arranged into stories told in tomes, then you can figure patterns out, taking Fibs as the letter-like unit.

For instance, when I called top at the 5' position of the Wolfe Wave pattern ("WW"), the pattern itself does not have anything intrinsic to itself to tell you when 5-prime is done rising (in the case of a Bearish WW).

Instead, I made use of some prop pattern I have discovered that laid within the language fabrics of the market, waiting to be discovered. Patterns in and of themselves are not as important as when they fit within a system of patterns. Just like words, patterns are made up of letters, which the market seem to be blurting out from time to time.

It's the correspondence among patterns that matter, especially when one "word" fits into a much larger phrase in which the story ceases to exist until that word come into place.

The total relationship is vital to predictive analysis and forecasting - In the case of the e-Mini, a prop pattern called Janus Pattern came into play as the last word of the phrase, so to speak, so as to offer a sensible reason to call a reversal when it did - Here was the chart:



snapshot

Price is attempting a Diagonal Triangle. An overhead target is attempted using basic Fib projection (never a sure thing, as the market looks at all the retail orders that are likely to be defined by Fib-based computation as most technical trader would do, and typically chooses to aim higher - This is a process often referred to as "hitting stop-losses" - Not an accidental process at that either.



snapshot

Here, price hit the target dead-on, and the junior trader should feel quite smug about it. However, the market has something else, of a counter-expectation in mind. The trader should prepare for it.

How?

Simply by first taking a step back and looking at the relatively bigger picture. Here, we move from a M1 to a 15-times enlargement:


snapshot

In this chart above, a 2-4 Line projection off of 3 would have underestimated the 5-prime position, while a projection off of the 1 would have possibly underestimated that as well.

However, an average of the two would have been closer. These projections are not noted here, simply because the reversal at the tip was based on a hidden geometry (Janus Pattern), but even without hidden patterns, the 2-4 Line projection should be enough to approximate a reversal.

Remember that the most common behavior is to revert to 5-prime. Second most common is staying at 5. Least of all (in a very aggressive market), is the 5-second (5"0 move.

I'm glad you like these patterns.

David
+1 Reply
4xForecaster PRO 4xForecaster
2 years ago
PS: Remember the "TUNNELING RULE" as a signature to your WW confirmation. It's sort of a quality brand I have discovered as well. Basically, if you magnify the 1-4-Line, you will notice that price passing through it tends to "make way" in a way that builds a tunnel as if to accommodate this passage - David
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4xForecaster PRO 4xForecaster
2 years ago
TUNNELING IN WW:

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David
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IvanLabrie TOP 4xForecaster
2 years ago
Would this be a valid WW David?
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4xForecaster PRO IvanLabrie
2 years ago
@IvanLabrie - Hi, Ivan: Ideally, the bottom alignment would be pointing downward, not up, for it to qualify as a WW - David
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IvanLabrie TOP 4xForecaster
2 years ago
So I'm bending the rules a bit there. I thought it was ok if it was inside a corrective triangle/diagonal. Thanks, back to the drawing board. :D
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IvanLabrie TOP IvanLabrie
2 years ago
What about this then?
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4xForecaster PRO IvanLabrie
2 years ago
@IvanLabrie - If it were a fish, it'd be pretty safe to call it a fish. If it were a cat, then pretty much everyone would call it a cat. But if it does not have the look of a Wolfe, you can always call it a fish, or even a cat, but don't trade it as if it were a Wolfe.

:-)

David
+1 Reply
IvanLabrie TOP 4xForecaster
2 years ago
:p Wise words indeed. Thanks!
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Sandeep_Gupta 4xForecaster
2 years ago
Please draw it.
+1 Reply
Sandeep_Gupta Sandeep_Gupta
2 years ago
4xForcecaster sir, what are TG-HI and TG-LO? How do you determine other targets?
+1 Reply
4xForecaster PRO Sandeep_Gupta
2 years ago
TG-Hi and TG-Lo are different from TG-1, TG-2, ... in that they refer to probable reversal levels, as opposed to future R/S levels.

As indicated in their name, both TG-Hi and TG-Lo are qualitative (i.e.: "high" or "low" targets. In contrast, TG-1, TG-2, ... are quantitative targets (i.e.: 1, 2, 3, ...).

Whenever I write these targets, I use a proprietary predictive/forecasting model that provides both direction, strength, as well as foresees future resistance & support ("R/S") and reversal levels - Unfortunately, this being a proprietary model, it contains an algorithm which I cannot share with you or anyone else.

Recently, a trader recommended me to use pivot levels. I do not use pivots, simply because I do not use the chart as my first reference to define these targets. The model gives me a direction, strength and probability levels, and only then, once I have these do I turn to the chart were I write them in. The final value is only revealed once laid in the chart.

Each target comes with a color. Typically, the qualitative targets remain in red, whereas the quantitative targets would be in green or yellow.

Colors carry the following indications:

- The red indicates that the probability of getting hit is LOW, but if price finally gets to it, the probability of reversal is HIGH.

- The yellow indicates that the probability of getting hit is intermediate, and if hit, it will likely cause a temporary retracement in the order of 0.382 to 0.618.

- The green indicates that the probability of getting hit is high, and if hit, it has a low probability of causing a retracement; if it does, it should be a shallow retracement, in the order of 0.214 to 0.382.

I hope this answers your questions.

Thank you.

David Alcindor
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Sandeep_Gupta 4xForecaster
2 years ago
Thank you very much for your reply, I am learning the charts you put in here in this great forum tradingview.com.
+1 Reply
4xForecaster PRO Sandeep_Gupta
2 years ago
@Sandeep_Gupta - This is fantastic, Sandeep. I am glad this is helping. Do not hesitate to post chart and request clarification. I am glad I can do that for you and other traders - David
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4xForecaster PRO Sandeep_Gupta
2 years ago
@Sandeep_Gupta - It's already drawn int he chart, at the areas where I wrote "tunneling" - David
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Sandeep_Gupta 4xForecaster
2 years ago
Thanks.
+1 Reply
Hi David. Any sign of reversal on Nikkei? The priced carved all of the upper lines, and pulled back.
+1 Reply
4xForecaster PRO HamedAghajani
2 years ago
Hi, @HamedAghajani - Thakn you for the heads-up. I just posted it thanks to your reminder.

This represents a high-probability reversal towards the 1-4 Line.

HOWEVER, this is a WEEKLY chart, so it is hard to say when it will occur.

David
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06 NOV 2014 - Update:

From Twitter:
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$JPN225 completes Wolfe Waves pattern; High-probability reversal:

- https://www.tradingview.com/v/1l026BJo/#.VFwKhfhZHNQ.twitter

via @tradingview | $jpn225 #BOJ #forex $JPY
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David Alcindor
+1 Reply
08 NOV 2014 - Update:

Here is the chart with its completed geometry. Implied here is a bearish expectation down towards the 1-4 Line projection. Considering the steepness of the 1-4 Line, I am not sure how realistic this is:


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David Alcindor
+2 Reply
HamedAghajani PRO 4xForecaster
2 years ago
Thanks David. Do you have any intention to analyse NIKKEI on time frames lower than Weekly?
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