ç below the First Break
Out Bar. No short
Trade taken.
T-144
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Applying Technical Analysis
Chemical Bank-Stock
ì
35 Period XTL
BUY
Take Profits
î
when Trend
Channels are
broken.
Apple Computer
î
íSELL
35 Period XTL
SELL
í
March 96
German Bunds
35 Period XTL
From October 1995,
the Mar 96 German
Bunds indicated a
Strong Up Trend.
T-145
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Applying Technical Analysis
Nikkei Index
Cash
ì
21 Period
XTL
Take Profits
when Trend
Channels are
BUY
broken.
î
April 96
Comex Gold
ì
BUY
Take Profits
î
when Trend
March 96
Channels are
Crude OIL
broken.
ì
35 Per XTL
SELL
60 minutes
(hourly)
T-146
GET
Applying Technical Analysis
MOB (Make or Break) Study With Time Marks
The MOB and the other new studies are very efficient when used correctly. Every effort has been made to explain them in this technical section. However, we highly recommend that you watch the 1996 Seminar Videos. At the seminar, these studies were discussed in detail and numerous examples were provided that showed how to use them either as stand alone studies or in combination. It is impossible to substitute the Seminar Videos in this technical section. It is also not possible to explain to each customer on the telephone. Bottom line: If you do not take the time to watch the 1996 Seminar Videos, you may not have a thorough grasp on how to use these new studies. And that would be your loss.
The MOB (Make or Break) Study takes the momentum, acceleration and other ratio models to define a price projection zone.
The IBM Weekly chart is shown
on the left. The various swings are
IBM Weekly
assigned separate momentum val-
ues such as Momentum 1,2,3.
○
○
Using the ratio of these various
○
○
○
○
○
○
○
momentums, Advanced GET cal-
○
○
○
○
○
○
○
○
culates a price projection zone.
○
○
○
○
○
○
○
○
○
○
Momentum 1
○
○
Momentum 2
○
○
This price projection should pro-
○
○
Momentum 3
○
vide major resistance for the cur-
○
○
○
rent rally.
a) The prices should rally to the
MOB projection
MOB projection.
Projected from
here.
b) Approximately 70% of the time,
prices will trade to the MOB pro-
jection level and reverse.
c) The rest of the time the prices
will reach the MOB price projec-
tion and continue to trade through
with stronger momentum. Hence
the name Make or Break. Prices
IBM Weekly
will either reverse or go through
with increasing momentum.
T-147
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Applying Technical Analysis
IBM Weekly
MOB projection
Projected from
here.
In this case, prices
a) reached the MOB
projection and
b) reversed sharply.
The price projection zone is determined based on the momentum of the current swing and the previous two swings.
Where to draw (originate) the MOB calculations: The simplest way is to initiate the MOB
calculations from a previous pivot (Primary or Major). In the above example of the IBM
Weekly, the MOB levels were initiated from a Major (J) pivot. The Pivots can be calculated and displayed by the software by selecting the Pivot Study.
The MOB can be initiated from several levels. For example when a Fifth Wave is being completed, one can initiate the MOB study from the previous Wave Three Pivot. Basically, any time you have a Major or Primary Pivot, MOB price levels can be initiated. At times, even smaller Pivots such as Intermediate or Minor can be used for the projection.
MOB
Major (J) or
Primary (P) pivot HIGH
Initiate MOB from here
Major (J) or
Primary (P) pivot LOW
MOB
Initiate MOB from
here
T-148
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Applying Technical Analysis
MOB (Make or Break) Example with Elliott Waves
The Daily Live Cattle
chart for the Dec 96 con-
Live Cattle
tract is shown on the left.
1996 Dec
In this case, the
The MOB is initiated from
MOB projection
the Previous Pivot Low.
was given at a very
Using the ratio of these
early stage before
various momentums, Ad-
the low was taken
vanced GET calculates a
price projection zone.
out.
This price projection
should provide major sup-
Projected from
MOB projection
port for the current decline.
here.
MOB Projection zones usually provide the termination point for a Five Wave Elliott sequence: In this case the previous pivot low was the Wave Three low. The MOB projection from this Pivot Low provided the support (MOB projection zone) for the final Wave Five.
Also note how early the projections were given.
In this case, prices
a) reached the MOB
projection and
b) reversed sharply.
Live Cattle
1996 Dec
Projected from
MOB projection
here.
T-149
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Applying Technical Analysis
MOB (Make or Break) Example with Elliott Waves/Trend Channels Bean Oil
Here the MOB projection
1996 May
coincided with a TYPE 2
Buy at the end of a Five
Wave Sequence. Use the
Trend Channels for entry
MOB projection
Projected from
here.
The chart shown above does not require much explanation. The May Bean Oil was trading in a Five Wave Sequence. The MOB projections from the previous pivot low (in this case it was a Wave Three pivot) provided the major support for the prices at the end of Wave Five.
Here the market set up a Type 2 Buy after the completion of a Five Wave sequence. The MOB
projection provided further confirmation by providing a Major Support level.
Additional tools such as the Regression Trend Channels can be used to provide a clear cut entry in the direction of the trade.
In addition, one could have used the XTL (Expert Trend Locator) to add on positions once the Wave Three was in progress.
The MOB (Make or Break) study is a very valuable tool that can enhance one’s trading provided it is used correctly. There are times the projections fail to hold. In such cases the market breaks through the MOB levels with increasing strength. These are usually Wave Three type swings. One can avoid some of these situations by knowing the Elliott Wave count at that time. Let us look at an example.
T-150
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Applying Technical Analysis
MOB (Make or Break) – An example of when prices Break through Crude Oil
Here the prices rallied
1996 May
through the MOB level with
increasing momentum. The
Elliott Oscillator confirms
this strength and the rally is a
Wave Three swing.
Projected from
here.
MOB projection
In this example, the MOB projection was generated from the Previous Pivot High. In this case, the previous Pivot High was a Wave One.
When prices reached the MOB projection zone, it hung around for a while and then broke through with increasing momentum.
Once again, this is why I call it the Make or Break Study. It either runs into the MOB zone and changes Trend. In other cases it will make through the MOB zone with increasing momentum.
In most cases where the market makes or goes through the MOB zone, tools such as the Elliott Oscillator will help to identify such breakouts prior to it happening. When the market is trading in a Wave Three, the MOB price zone simply becomes a level where the market breaks through with increasing momentum. One could also use the XTL to identify such situations.
If you ever get an “*” showing up at the beginning of the MOB, this means that there isn’t enough data for the MOB to be 100% certain that this is the level. Keep erasing and redrawing the MOB as each bar comes in until the “*” is gone.
I suggest you take the time to master this study. Also watch the 96 seminar videos. I have discussed several methods of how to use this study.
T-151
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Applying Technical Analysis
New Time Marks Added to the MOB study.
We released this new addition to the MOB study at the Cleveland Seminar (Nov 10, 1997). In the past the MOB provided price levels at which the market had tendencies to reverse. However, it did not provide any sense of time as to when the prices can arrive at the MOB level.
From our ongoing research, we have developed a method to forecast the time as shown in the example below (Z- Woolworth Daily Stock):
Z – Woolworth
Prices approach the
Daily Stock
MOB level near
the
Time Mark #1.
(Group A).
Here the MOB is drawn from the previous Primary Pivot (P). As you can see, the prices traded to the projected MOB level and reversed quickly. If you examine carefully, the MOB also has two Time Marks drawn vertically. These are two projected time periods where the software has calculated a high tendency for the prices to approach the MOB level.
MOB level.
Time Mark
Time Mark
# 1
# 2
In the above example, the prices traded to MOB level on the day marked as Time Mark #1 and quickly reversed from the projected MOB level.
T-152
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Applying Technical Analysis