Lately I have been investigating the D-wave; trying to wrap my brain around the unique framework it provides. Let's consider the wave structure from the hourly bar chart of the cash SP500 which is displayed in the attached chart. The hourly D-waves are plotted on the daily bar chart.
Perhaps the key to using this data is to focus on the fact that the end of three (A-B-C) or five (1-2-3-4-5) wave swings are potential exhaustion areas. Next we make the assumption that the next higher time frame chart is a 'forcing' mechanism. That is, you only want to take positions that are in sync with the next higher time frame. Since Combo, Setup and Sequential are also designed to identify exhaustion areas it makes sense to see how they all interact.
To start, take this groundwork: The yearly DJIA D-wave count can begin at the 1932 low since it is a 21 period low. From that starting point D1 ended at the 1966 high and D2 at the 1974 low. As of today we still don't have confirmation that D3 has ended. Note that these waves could be labeled DA, DB, and DC. What is the deciding factor? The trend. The price action since 1932 (on a yearly basis) is certainly not a counter-trend (corrective) move.
To Be Continued ....
1 comment:
Saxby, good to see you're on D Wave. Been using it for several years now in much the same way you suggest, that is melding different time frames to get a whole picture along with Combo/Sequential/Set Up. It has been a great help.
I use the Perl formulation of 13/8/21/13/34 and find it to be more useful than a lessor sequence, especially since I don't mess with squiggles, extensions, wxy's, or other e wave arcana. I've learned to keep it simple so that my main focus is on trading. Otherwise you can create a new world with this stuff.
In any case, I'll be glad to offer positive comments as you go along. Like what you're doing, but will offer an up front caution. You're going to find that these waves change amplitude from time to time, most likely to happen when there's a direction change. So try not to get married to one time frame as your reference for a particular wave level.
Right now, for example, Using the Perl formulation I like the 2 hour for a 5 wave down from May 2, the 4 hour for an ABC and the 2 day for a single wave. This, by the way, is the highest amplitude I have seen. Anyway, good work. Keep it up.
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