How far will this
swing retrace be-
fore the original
swing continues its
ORIGINAL
trend?
SWING
Jan 98 Soybeans
Daily
T-160
GET
Applying Technical Analysis
The new study takes the original swing in question and provides a Time and Price Level which should hold any retracement of the original swing.
If the Time and Price Level holds, the original swing should continue its original Trend. The Time and Price Level is displayed on the chart in the shape of an Ellipse. Hence the name T.J’s ELLIPSE.
As long the ELLIPSE (Price
and Time) holds, the original
swing should take the prices
lower.
ORIGINAL
SWING
Jan 98 Soybeans
Daily
How the T.J’s Ellipse is calculated:
The user identifies the swing (high and low). This is used to determine a room size and the current strength of the market. Using these values, Advanced GET calculates a projected path for the Ellipse to intercept the prices. In actual use, the T.J’s Ellipse will continue to move towards the prices. When the prices meet (or hit) the Ellipse, the Ellipse stops moving and provides a solid Price and Time level.
At this time, it is critical for the Ellipse to hold the prices. If it holds, then the original swing can continue.
Please watch the seminar tapes. We go through several situation and examples and it is very clearly explained. You really need to take a few hours and watch the 1997
seminar videos. If the Ellipse study is used correctly, it does provide an incredible edge for traders.
T-161
GET
Applying Technical Analysis
Lets continue with the previous example:
Ellipse B is
the Ellipse gener-
Ellipse A
ated from
Ellipse B
Swing B.
Swing A
As long as this
Swing B
Ellipse B holds
the prices, Swing
B should con-
tinue its trend
lower.
Jan 98 Soybeans
Daily
Ellipse C is
the Ellipse gener-
ated from
Ellipse A
Swing C.
Ellipse B
As long as this
Swing A
Ellipse C holds
Swing B
the prices, Swing
Ellipse C
C should con-
Jan 98 Soybeans
tinue its trend
Daily
lower.
Swing C
T-162
GET
Applying Technical Analysis
As the market continues to trade, new swings are generated. For each new swing, the software can generate a new Ellipse. As longs as the corresponding Ellipse holds, the original swing should continue its trend.
Ellipse A
Swing A
Ellipse B
Swing B
Ellipse C
Swing C
Jan 98 Soybeans
Daily
Ellipse D
Swing D
Ellipse D is the Ellipse generated from Swing D. As long as this Ellipse D holds the prices, Swing D should continue its trend higher.
ELLIPSE PROJECTION (Shadow):
Once the Ellipse study is applied, the software starts to project its path to intercept the prices.
Ellipse intercepts
Projected Path of
Prices
Ellipse
T-163
GET
Applying Technical Analysis
Example – Projected Path of Ellipse:
The following example shows how the Ellipse study shows its projected path as it attempts to intercept the prices.
RBK – Reebok Daily
Projected Path of
Ellipse
Swing used
Ellipse start
As the prices continue to retrace, the Ellipse
moves closer and closer to the prices.
The distance between the current Ellipse and
Projected
its shadow (projection) continues to narrow
Shadow
as it gets closer to the prices.
Ellipse
New
start
Position
T-164
GET
Applying Technical Analysis
Once the Projected shadow meets the prices, immediately use the Regression Trend Channel for confirmation of the actual turn in the prices. These techniques are discussed in great detail in the 1997 seminar videos. I have tried my best to explain this on paper, but it does not come close to the seminar presentation.
RBK – Reebok Daily
Projected Shadow
meets prices.
Use Trend Channel
for confirmation
The actual Ellipse continues to move
up till it intercepts the prices. When
prices cross the Trend Channels, a
low is confirmed.
T-165
GET
Applying Technical Analysis
USING NORMAL and SHORT Term ELLIPSE
The Ellipse study provides three options: Normal, Short and Long Term. Currently, the Long Term does not provide any significant information.
In nine out of ten cases the normal setting should be used. All our discussion so far uses the Normal setting.
There is one situation that requires using the short term Ellipse. When the 10/70 Oscillator is above its strength band and the market is in a massive Wave Three, we recommend using the short term Ellipse. See example below:
U.S. Bonds
Dec 1997
Short Term
Normal
Ellipse held
Ellipse
prices
10/70 Oscillator above
Strength Band.
T-166
GET
Applying Technical Analysis
THE JOSEPH TREND INDEX (JTI)
The Joseph Trend Index (JTI) is a dynamic mathematical model that can be used to identify the Trend of the market, the direction of the Trend and the strength of the Trend. Of all the studies in Advanced GET, the JTI has the most complex routines and takes the most time to calculate. The JTI also uses the same algorithm for all markets and all time frames (such as daily, weekly and monthly).
The JTI calculates a Trend Index value which can be set to track the short, medium, normal or long term Trend of the market. If the Trend Index Value is greater than (30 to 50), the model classifies the market as trading in an Up Trend. If the Trend Index Value is below (-30 to -50), the model classifies the market as trading in a Down Trend.
There are times when a market fails to generate a Trend Index Value and these are usually seen during extreme congestion periods.
The JTI is very different from studies such as the DMI. It uses a proprietary correlation routine that calculates the Trend Index. The primary objective while designing the JTI was to create a study that kept one from taking positions against a major trend. Historical testing indicates that JTI handles this very well. The added bonus is its ability to act as an early warning study both prior to a breakout of the Trend and at the end of a Trend.
UP TREND
Trend Index > (+30 to +50)
(+30 to +50)
CONGESTION PHASE
(-30 to -50)
Trend Index < (-30 to -50) DOWN TREND T-167 GET Applying Technical Analysis Once the Trend Index Value is calculated, the software internally calculates and projects various price action values which are dynamically adjusted to the current market conditions. This is used to classify the strength of the Trend and is displayed in four colors. RED - The Trend is very strong BLUE - The Trend is of medium strength GREEN - The Trend is of low strength YELLOW - for most part is caused by noise in the market Almost all Wave Three phases and extended Wave Five Phases generate a Strong (RED) Trend Index Value. Generally, most of these phases start out with low or medium strength Trends and progress to a strong Trend. However, many times the Strong (RED) Trend appears during the early stages of a move and the JTI is designed to detect this. Wave Three phases and extended Wave Five phases also show a strong tendency to lower their Trend strength prior to completion. The JTI is quick to detect this and alerts the user by down grading its Trend strength and changes to a lower strength color. ò End of Trend UP TREND JTI indicates the Trend is over either by lower Trend values or by down grading the Trend strength and changes to a lower é strength color. Beginning Trend ñ ê Trend Index > (+30 to +50)
(+30 to +50)
T-168
GET
Applying Technical Analysis
Examples of the Joseph Trend Index (JTI)
JUNE 93 GOLD
The JTI is breaking above (+30)
level and also shows a BLUE
color. This indicates the prices
are breaking out in a well de-
fined Up Trend.
JUNE 93 GOLD
The JTI changes to a RED color
indicating a very strong Trend.
T-169
GET
Applying Technical Analysis
Examples of the Joseph Trend Index (JTI)
June 93 Gold
Trend Index (JTI)
Notice how the JTI stayed strong all through the rally in the RED color mode. Then, near the top, the JTI changed color indicating the Trend is over.
This is where one has to apply Elliott Wave studies. Yes, the current Trend has topped.
However, in Elliott terms, this is a Wave Three. As long as the Wave Four retracement provides an acceptable PTI index, we would look for another rally attempt in Wave Five.
The JTI will treat this second rally phase as a totally different Trend.
USING DIFFERENT LEVELS OF TREND LENGTH:
When using the NORMAL TREND LENGTH, historical testing indicates the JTI will treat both Wave Three and Wave Five as two different Trend phases. The LONG TREND
LENGTH tends to treat the entire Five Wave sequence as one Trend phase.
The Short or Medium Trend Length allows the user to break down Wave Three phases into smaller Trend segments and can be used for shorter term positions.
WE SUGGEST YOU START WITH THE NORMAL TREND LENGTH AND
ONLY CHANGE ONCE YOU GET FAMILAR WITH THE JTI STUDY.