The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at toddstrade@gmail.com
I am always open to questions, comments, or suggestions on how to improve this blog.


Monday, November 23, 2009

DXY wolfe

Are you sick of me posting Wolfe Waves yet? haha I can't help myself!
Here's a 60min chart of the U.S. Dollar Index (DXY) that seemed to have set up a bearish Wolfe Wave recently.
Important points to take notice of include;
-the #5-point coincided with a prior level of resistance
-the target line (red) is very extended to the downside. So if you were to have taken this trade setup (or any Wolfe Wave for that matter), rather than look at the target line for an EPA, you should be aware of potentially strong support areas ($75 in this case) that may prevent price from achieving it's target (though this issue still has time to reach that target line).

8 comments:

Jules said...

Can't get enough of your wolfe, Todd LOL!

I'm lazy. I took the short cut by following your posts...I was having a hard time spotting bear wolfe patterns until you showed one sometime last week :-)

So please keep them coming!

Tony said...

Todd, nice work on Wolfe patterns. I've been stalking the XME as a proxy for the inverse dollar and I wonder if you think this looks like a bearish Wolfe. SPX looks similar for that matter.

http://starwealth.blogspot.com/2009/12/xme-bearish-wolfe-wave.html

Be honest... if it's a mess, tell me. Thanks.

todd said...

Hi Tony,
Included below are links two snapshots I saw in XME.
The first is a longer term bullish wolfe wave that developed and is getting caught up achieving it's target due to resistance.
http://www.screencast.com/users/fufufnik/folders/Jing/media/5c1afc30-f8bd-404a-ab97-4565c0221d11
As I see it, the 5-point has yet to be achieved on the bearish Wolfe Wave that you point out.
http://www.screencast.com/users/fufufnik/folders/Jing/media/f650c59b-a878-4e1c-85fa-c57e944bb9e4
Thanks for pointing it out Tony.
I love those Wolfe Waves!

-todd

Tony said...

Thanks for the chart review. So, Point 5 has peak ABOVE the trend line from 1 to 3? Is that right?

todd said...

Yes sir,
It's called the "Sweet Spot." Where you want to take action and where the squeeze sets up.

Tony said...

TYVM. Nice blog.

todd said...

Thanks Tony, you're welcome.

-todd

Tony said...

BTW, I gave you some props at the end my last entry (for the 4 people who read mine! lol)

http://starwealth.blogspot.com/2009/12/spy-bearish-wolfe-wave.html

I'm just learning this pattern... I'm still not sure of the sentiment behind the pattern: maybe Wave 5 is like a capitulation move, like you said, the "squeeze", that then quickly reverses.