Thursday, March 10, 2011

The search copper

I have to tell you, the persistence of people attempting to map, remap and remap the remap of what are relatively random letters and numbers onto current patterns is downright intriguing. I would guess that the confusion from yesterday has the ridiculousness of so many of the EW patterns people are posturing about. I don't really know anyone who can make money based on anything more substantial than following basic market symmetry and reasonable trade management. Precise EW counting is not useful in that objective in my opinion.

What I see going on is likely to, once again, cost the loyal counters dearly with more missed trades and more missed calls. I have discovered, for example, that when I mess up a trade, my impulse is to trade more but the prudent move is to do the opposite and trade less. I think the same applies to analysis aswell. More labels and letters have a greater ability to take you away from a goal than towards it. They, however, feel especially interesting and required when one may have recently gotten the previous ones rather wrong.

It is amazing how consistent it is that more analysis leads to more underperformance especially when coming from foundations based on lack of clarity. The thing about EW counts that can also be distracting is that they are so very interesting that is seems they are more interesting than actually successful trading itself. So, the two activities are easily decoupled and no longer need to support each other in that paradigm. I am sorry to say it, but that's the way I see it.

My advice once again is to keep it simple...

Lets examine the situation:

  1. Nearly everyone is looking up (while simultaneously worrying about down after the up)
  2. Relatively large under performance in certain key commodities
    especially ironically ones in which JP Morgan has had large long positions
  3. Key indexes and names are not performing. Nasdaq 100, AAPL, NFLX, AMZN and many other momo names are not playing ball.
  4. The Dollar has broken out nicely of a bullish falling wedge and held supports as I indicated on my previous charts. I see most elliottwave analysis missing the boat on the dollar levels with the wrong trend lines and interpretations. I think that this particularly miss could be hazardous.
  5. American style Tunisian and Greek social unrest is coming to the US - every day it gets closer because Mr. Bernanke, Obama, Bush, Bankers and congress have done everything in their power to make sure that this would happen.
  6. Then there is the sovereign debt issue that is never far away...
Below is a chart of copper...and its not painting a good picture...
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