MOB level.
Time Mark
Time Mark
# 1
# 2
Time Marks:
The software calculated two Time Marks. These are two days or bars (on a 5 min chart etc.) which has the highest tendency for the prices to approach the MOB projections. In testing, we have observed the following:
The prices approach the MOB levels in two groups.
Group A has a tendency to approach the MOB level near the Time Mark #1. In this case the prices tend to hit the MOB level and reverse at or near the Time Mark #1. The example on the previous page on Woolworth shows the prices approaching the MOB level at Time Mark #1.
Group B had a tendency to approach the MOB level between Time Mark #1 and Time Mark #2 with a slight bias towards Time Mark #2. See the example below (US Bonds 30 min): US BONDS Dec
Prices approach the
97 – 30 min
MOB level near the
Time Mark #2.
(Group B).
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Applying Technical Analysis
Distribution of Groups:
The distribution is split almost 65 to 35. Prices approach the MOB levels near Time Mark #1 (Group A) roughly 65% of the time. Prices approach the MOB levels between Time Mark #1 and #2 (Group B) roughly 35% of the time.
Group A
OBSERVATION:
65% of the time
In Group A, the prices
approach at or near the
Time Mark #1. (Almost
on top of it).
MOB level.
Time Mark
Time Mark
# 1
# 2
OBSERVATION:
Group B
In Group B, the prices
35% of the time
approach between
Time Mark #1 and
Time Mark #2. (With a
MOB level.
slight bias towards
Time Mark #2).
Time Mark
Time Mark
# 1
# 2
AA Stock
Daily
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Applying Technical Analysis
The Time Mark study is not the Holy Grail for identifying the exact day or time when the market should reverse. Instead, it provides a framework of when to expect such reversals. If the prices have not approached the MOB level by Time Mark #1, then you are simply not in Group A. You would then continue to look for a Group B type behavior.
In the following example, the MOB level is shown with an Elliott Wave study. When Five Waves are complete, the market changes direction. The MOB levels help to identify price levels where this change can occur. The Time Marks provide a framework of when to expect the change.
In this example, the action
is classified as Group B.
Even though the price
penetrated the MOB ear-
lier, the rally labeled
Wave 2 (which was the fi-
nal high before reversal)
happened right in the
middle of Time Mark #1
and Time Mark #2.
Soybeans January 98
60 min (hourly)
Recalculation of Time Marks:
When the MOB is first drawn, the software calculates Time Mark #1 and Time Mark #2. As time passes by, if the prices have not taken out the pivot high (where the MOB was drawn from), the software will cancel the current Time Marks and recalculate new ones.
Time Mark #1 #2
NEW Time Mark #1 #2
MOB
level.
Once the high is
MOB drawn
High not taken out
from here
taken out, the
Time Marks will
not be recalcu-
lated.
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Applying Technical Analysis
BIAS REVERSAL
By using the price momentum and volatility, our research has been able to identify certain areas where the market is setting up for a price reversal.
The initial identification is actually for a change in bias. Thus the name Bias Reversal.
Markets can have small changes in bias and still continue to trade in the original direction.
Therefore, once a Bias Reversal is detected, we need to see further changes in prices to confirm the signal. This is discussed on the following pages. When a change in Bias is detected, the software draws a triangle.
If the triangle is pointed up (Ù), then a change in Bias to the upside is detected. If the triangle is pointed down (Ú), then a change in Bias to the downside is detected.
The chart shown below is the US Dec 96 Bonds. The Triangles are the changes in Bias detected by Advanced GET. The arrows are drawn by hand to show which bar the change in Bias was detected.
ë
ì
Change in Bias
to the Downside
Change in Bias
to the Upside
í
î
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Applying Technical Analysis
BIAS REVERSAL
Once a Change in Bias is detected, we suggest to use the Trend Channels from the previous pivot. Wait for the prices to cross the Trend Channels. This will confirm a Change in Trend is in progress.
Trend Channels from
the Previous Pivot
í
ë BUY
Confirmation
Change in Bias
î
Detected to the Upside
As stated before, a change in Bias does not guarantee a change in Trend. This is why we suggest you use the Trend Channels to confirm the change in Trend.
FALSE SIGNALS: Once the change in Bias is detected, the software needs one or two bars to confirm the signal. If the confirmation is not seen, the signal is considered False and a line is drawn above/below the triangle. Ù Ú
To prevent the false signals from being displayed, select the Filter button to ON in the Bias Reversal menu. If you see a False signal bar drawn on the Bias Reversal, we suggest you leave that signal alone and wait for the next one.
The Bias Reversal also has a normal and tight mode. The Tight mode is basically a filtering technique where the software has to obtain stronger signal to generate the change in Bias.
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Applying Technical Analysis
Elliott Wave Trigger
The Elliott Wave Trigger study was added to further enhance the use of the Elliott Oscillator at the end of Wave Four retracements. In many cases, the Oscillator pulls back to the zero level and continues to stay below zero for some time. In such cases, the Elliott Trigger provides the confirmation that Wave Four has completed.
Elliott Trigger
confirms
end of Wave
Four
ë Elliott Trigger
confirms
The Weekly chart of the Dow Jones is shown above. The 5/35 Elliott Oscillator has pulled back to zero. Notice how the Elliott Trigger is also below the zero line.
Once the Oscillator has pulled back to zero, wait for the Elliott Trigger to cross above the zero line. This provides confirmation that the Wave Four is over.
Where this study becomes very helpful is when the Oscillator pulls below zero and stays there for a while. In such cases, you simply wait till the Elliott Trigger provides the confirmation by going above the zero line.
The next page shows another example.
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Applying Technical Analysis
The following example shows the Dec 96 DMark in a Wave Four. The Elliott Oscillator 5/35
has pulled back to zero and is staying in that area. You now wait for the Elliott Trigger to go below the zero line to confirm the end of the Wave Four. In cases where the Oscillator hangs around the zero line, the Elliott Trigger is very useful and helps to avoid false entries.
Elliott Trigger
confirms
Oscillator pulls
end of Wave Four
back to zero
î
Elliott Trigger ì
confirms
When the market is rallying in a Five Wave sequence, you will look for the Elliott Trigger to go above the zero line to confirm the end of Wave Four. When the market is declining in a Five Wave sequence, you will look for the Elliott Trigger to go below the zero line to confirm the end of Wave Four.
In both cases, wait for the 5/35 Oscillator to pull back to zero before you monitor the Elliott Trigger. Prior to the 5/35 Oscillator pulling back to zero, the Elliott Trigger can cross its zero line all it wants. It does not matter.
The sequence is as follows: In a Wave Four, allow the 5/35 Oscillator to pull back to zero.
This happens approximately 94% of the time. Once the 5/35 Oscillator has done this, then monitor the Elliott Trigger to confirm the end of a Wave Four as shown in the example above.
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Applying Technical Analysis
T.J’s ELLIPSE
How far will a price swing retrace before the original trend can continue? This has been a question that all traders have asked at one time or the other. Fibonacci Retracement studies offer some help in this matter. However, they just provide levels such as 25% retracement or 50% retracement. If one level does not hold, the trader looks for the next Fibonacci level and so forth.
ORIGINAL
25% Retrace-
SWING
ment
Which level will
50% Retracement
hold and allow the
original swing to
62% Retracement
continue its trend?
75% Retracement
The new study T.J’s Ellipse provides a technical solution. The details are discussed on the next several pages. Be sure to watch the 1997 seminar videos where I go into numerous details which cannot be explained on paper. Please take time to watch the videos and learn this new technique. It will increase the quality of your trading.