i dont know what log/non log means,hence multiple charts,took a while to figure out how to change chart
I think it will benefit a few traders if I explain a little about Long Wave Cycles and relating them to shorter term trading conflicts as a lot of traders get shipwrecked on this issue. I have had the pleasure of trading with a group of long term ET'ers daily for a number of years and we trade mostly off the 1 min charts. I like to map out the day in advance as to where PA should go and then narrow it down to a gameplan based on the 60m projection. One of the members is learning to do that but often struggles when he trades what he sees if it seems to run counter to his daily map, only to see at the end of the day that he was correct in his expectations before the first trade was placed. It's a learning curve and confidence trick that he is growing in to and improving on. Intraday this technique is no different to long term trading yet it seems to warp a lot of peoples minds. Going back to the Wave discoveries that I mentioned, Bob Beckman was the one who set me on the path to investigate Kondratiev through to Elliot. Bob was fantastic at spotting very profitable highly leveraged short term opportunities and correctly predicted the top of the 1987 crash. However there were three caveats to his longer projections: 1) Bob expected the crash virtually every month from 1980 2) Bob thought the '87 crash was the Grand Supercycle correction of 200 yrs meaning years of much lower prices 3) Bob's conservative fund employed a bear strategy from 1980 missing a raging bull market and by the time of the crash he was -40% when he should have been up 100%+ since 1980. So here was a guy who was often brilliant short term and when you stitch all those short term waves together instead of getting a harmonious big view it's a mess. Btw he wrote the book Super Timing! Same with Prechter: he's been calling the Grand Supercycle Crash for 30 years and he'll be right when it happens too. Gerry Favors was a brilliant intraday trader who screwed up longer term trading because he couldn't reconcile the two contrasting view points. Robert Miner had two years when he couldn't put a foot wrong using his version of time cycles with Elliot only to see the linear phase go out of control. By that time he had enough confidence to believe he should stick with the program and almost wrecked himself before giving up on his timing idea as being the great market discovery. Yet Kondratiev cycles correctly predicted the decline of western economies and the rise of the east decades before it began to happen with an approx target of the year 2000 for the crossing of the two trends. If you want to trade waves based on any kind of linear time cycles there will be periods when you'll feel like a genius only the go through phases when you'll feel like a Neanderthal. It's the good times that keep sucking people into Prechter's camp and Hurst is the only guy I have found that has the key to the problems of conflicting cycles. So here is the lesson out of this. You have to be a be a bull in a bear market when the signal is telling you to take the trade. In theory that is easy to do because the wave ideas from Kondratiev to Elliot trades impulse and corrective waves. However history shows that what goes on in the mind plays tricks on traders when the big picture calls for a forceful move in the opposite direction to that called for by the inside structure and somehow weightings get all screwed up. In the forum I will often call, The Boss (cycle) wants down, and yet in a few minutes I am trading long for an "Up for Down" trade. The reason being that it is the Boss's job is to send the rookies in the wrong direction before the real trade sets in. Think about this because it is part of the problem that screws up many traders who say after they missed the move, "I knew it was going to do that!" This happens in all time frames and I think 2012 will be the year when a lot of traders will be saying that and repeating the mistakes of those mentioned earlier. So back to the FTSE. This is a bearish pattern. Compare it to rhk's post and you can see that the wedge is much clearer on the FTSE. Is the bull phase over? I'll take a closer look next.
(From the lows note the big wedge forming the left shoulder, dropping into a rising channel that concludes in a triangle. That breaks down to form this wedge where we are today.) The wedge looks bearish but it looks worse in the bigger picture. We have the FTSE wedge forming at left shoulder resistance for a potential H&S with a bottom 3400 test projection. Bodies are getting smaller and tails are forming at resistance - not good for the bulls.