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Elliott Wave Analysis (Archive)
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NUD=Not updated. Don’t know where in optionistic that give the bias figures.
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Stay Hungry. Stay Foolish. - Steve Jobs
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NUD=Not updated. Don’t know where in optionistic that give the bias figures.
http://www.optionistics.com/i/strike_pegger
Maybe it requires registration (free). They refer to Max Pain as Peg or Strike Pegger.The Peg is the strike price where the sum of the amount to be paid by all call and put writers is the smallest. This is the red line on the Daily History and Peg By Expiration charts. The peg changes as the ratio of open interest for calls and puts changes. The ratio of call and put open interest is measured in dollars.
The Bias is the point where the put open interest and the call open interest converge. It represents the direction where the Peg is likely to move based on small changes in open interest. A Bias that is higher than the Peg indicates the Peg is likely to rise and a Bias below the Peg indicates the Peg is likely to fall.
http://www.optionistics.com/f/strike_peg
I really like the Daily History and By Expiration graphs. The bias is graphed in blue next to the Peg (Max Pain) in red. Mouse over the graph to reveal the values.Signature
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Mace, Deagol or anyone else : would be interested in hearing if the last 4 days action have changed any of your wave counts.
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Mace, Deagol or anyone else : would be interested in hearing if the last 4 days action have changed any of your wave counts.
Because 1.v would’ve started at $188.68, a break of that level would invalidate my count and favor either a much more complex 1.iv (double or triple three like a flat-triangle combo) still ongoing or Mace’s preferred 2. On the contrary, a clear impulse from here would make it almost certain as 1.v.(3).(i).
Is it a clear impulse? Last few days from $196 to $210 looks like one, but I’m not sure about the early Feb move from $190 to $204, so I decided to make the previous correction end with a triangle and thus the impulse would not start at the $190 low.
If we try to see the whole thing since Feb as part of that (i) of (3) impulse I mentioned above, looks like it would still need a wave 4 and 5. If so, it’s taking a while to get this wave (3) started, but I have no idea what the rules are regarding time. Here’s the count:
1.v.(2) ends with a triangle wave (Y of WXY combo, Mace?) at $194.06 on Feb11.
Length=$21.53, 80.0% retrace of (1).
1.v.(3).(i).[1]: $194.06 to $204.31, length=$10.25.
1.v.(3).(i).[2]: $204.31 to $195.71, length=$8.60, 83.9% retrace of [1]
1.v.(3).(i).[3]: $195.71 to $210.92 (complete?), length=$15.21, 148.4% of [1]
Note: [3]=1.618*[1] would get it to $212.29.Assuming [3] is complete, targets for 1.v.(3).(i).[4] are:
14.6% ret=$208.70
23.6% ret=$207.33
38.2% ret=$205.11Assuming [4] completes at $205 (can’t go beyond end of [1] at $204.31, unless (i) is a LD), then targets for [5] would be:
0.618*[1]=$211.33
1.000*[1]=$215.25
1.382*[1]=$219.17Targets for 1.v.(3).(i):
2.236*[1]=$216.98
2.618*[1]=$220.89
3.000*[1]=$224.81
3.618*[1]=$231.14Targets for 1.v.(3):
1.618*(1)=$237.60
2.000*(1)=$247.88
2.618*(1)=$264.51Targets for 1.v:
2.236*(1)=$248.85
2.618*(1)=$259.13
3.000*(1)=$269.41
3.618*(1)=$286.041.000*i=$239.85
1.382*i=$259.40FWIW
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thanks Deagol!
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danthemason
- [ Ignore ]
but I have no idea what the rules are
No matter, wait a few days and they will just evolve.
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1.v.(3).(i).[1]: $194.06 to $204.31, length=$10.25.
1.v.(3).(i).[2]: $204.31 to $195.71, length=$8.60, 83.9% retrace of [1]
1.v.(3).(i).[3]: $195.71 to [...]
Note: [3]=1.618*[1] would get it to $212.29.More targets for 1.v.(3).(i).[3]
2.000*[1]=$216.21 passed
2.236*[1]=$218.63 [edit: passed]
2.382*[1]=$220.13 [edit: passed]
2.618*[1]=$222.54 [edit: passed]
3.000*[1]=$226.46 [edit: Tue HOD $225.00]Assuming [3] completed at $225.00, targets for 1.v.(3).(i).[4] are:
14.6% ret=$220.73
23.6% ret=$218.09
38.2% ret=$213.81 [top of little [iv] price zone]
50.0% ret=$210.36 [bottom of little [iv] price zone]My theory is [4]
[ Edited: 09 March 2010 07:02 PM by deagol ]hopefully fills that gap to $211-$212 by Fridayto $215-$218 sometime next week, then [5] to $230 on iPad pre-order/launch/announcements speculation to complete this lengthy (i) of (3). Then perhaps a sharp and quick (ii) to backtest $218 (around/after April earnings?) before the big (iii) of (3) rally to $250-$275 by July (iPhone + earnings). FWIW!! (not much).Signature
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Max pain thesis: So long AAPL closes above max pain on OE Friday, AAPL is in a multi-month rally. It usually closes near highest OI (calls) when in multi-month rally and near highest OI (puts) when in multi-month decline.
I’m gonna try this table format…
. Mar2010 Apr2010 Jul2010 Oct2010 Jan2011 Jan2012
------- ------- ------- ------- ------- -------
Max Pain and bias:
Pain $200.00 $200.00 $200.00 $210.00 $170.00 $190.00
chng - + $5.00 - - - -
Bias $204.58 $194.80 $203.66 $214.27 $168.25 $196.50
chng + $7.58 + $4.64 + $1.92 - $1.56 + $0.79 + $3.32
Diff + $4.58 - $5.20 + $3.66 + $4.27 - $1.75 + $6.50
Highest OI:
Call $220.00 $220.00 $250.00 $210.00 $300.00 $220.00
chng +$10.00 +$10.00 - - -
Puts $185.00 $200.00 $200.00 $175.00 $200.00 $180.00
chng - +$15.00 - -$45.00 -Better? No? :bugeyed:
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1.v.(3).(i).[1]: $194.06 to $204.31, length=$10.25.
1.v.(3).(i).[2]: $204.31 to $195.71, length=$8.60, 83.9% retrace of [1]
1.v.(3).(i).[3]: $195.71 to [...]
Note: [3]=1.618*[1] would get it to $212.29.More targets for 1.v.(3).(i).[3]
2.000*[1]=$216.21 passed
2.236*[1]=$218.63 [edit: passed]
2.382*[1]=$220.13 [edit: passed]
2.618*[1]=$222.54 [edit: passed]
3.000*[1]=$226.46 [edit: Tue HOD $225.00]Assuming [3] completed at $225.00, targets for 1.v.(3).(i).[4] are:
14.6% ret=$220.73
23.6% ret=$218.09
38.2% ret=$213.81 [top of little [iv] price zone]
50.0% ret=$210.36 [bottom of little [iv] price zone]My theory is [4]
hopefully fills that gap to $211-$212 by Fridayto $215-$218 sometime next week, then [5] to $230 on iPad pre-order/launch/announcements speculation to complete this lengthy (i) of (3). Then perhaps a sharp and quick (ii) to backtest $218 (around/after April earnings?) before the big (iii) of (3) rally to $250-$275 by July (iPhone + earnings). FWIW!! (not much).
How confident are you we get some sort of pullback here to mid 210s? Curious to get Mace’s input here… -
How confident are you we get some sort of pullback here to mid 210s? Curious to get Mace’s input here…
Well, we’ve had 3 clear waves from the recent bottoms: First a 10-14 point (depending on where you start) “tentative” rally lasting a week or two in early/mid Feb. Then an 8 point correction for about a week. And this one now running for 29 points over the last 2 weeks, which might not be done yet. If we are to believe in EWP, once this third wave completes there should be a shallow wave 4 correction (up to 38% of $29 = $11) before we complete this whole impulsive move since Feb with a fifth wave.
After that fifth wave, we’d go into a higher-level corrective phase (a wave 2 in my count with wave 1 being the whole thing since Feb) which should at least retest those same price levels touched on the aforementioned lower-level fourth wave. Only then we’d be free to rally unimpeded in a 3 of 3.
I’m not confident at all, just trying to follow what the EWP theory suggests. I’d also like to get Mace’s input.
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So I’ve been trying to get over my cognitive dissonance about Primary wave 2, by thinking ahead in preparation for the completion of Primary 1 sometime in the future.
An idea I had was looking at it in reverse. Let’s suppose Primary 1 ends at AAPL = x. Now let’s look at the possible retracements, and peg those retracement prices at some of the recent resistance/support levels. In particular, I thought of pegging a 38% retracement at the previous 1.v.(1) high of $215.59, a 50% retracement at the 1.iv low of $188.68, and a 62% retracement at the 1.i high at $133.50. Yes, I know this is quite arbitrary. Anyway, the targets I get for x (end of primary 1) are:
(x-215.59)/(x-82.33)=0.382 ==> x=$297.95
(x-188.68)/(x-82.33)=0.500 ==> x=$295.03
(x-133.50)/(x-82.33)=0.618 ==> x=$216.29Since we just passed $216 this last scenario is less likely. The other two scenarios align, so that’s probably where Primary 1 will end?
Mace, where are you?? We all miss you here. What do you think of this kind of reasoning? Does it help in guesstimating probabilities for targets? Does it make any sense to you? To be honest, I can’t see a need for any retracement even close to the minimum 23.6% (if Primary 1 were to end right now it would completely wipe this last, most needed advance from $190, or if Primary 1 reaches $294.13 then it’d be a $50 drop… a 17% pullback is no biggie but what event would trigger it?). Once again I’m basing that perception on my “trustworthy” FA.
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So I’ve been trying to get over my cognitive dissonance about Primary wave 2, by thinking ahead in preparation for the completion of Primary 1 sometime in the future.
An idea I had was looking at it in reverse. Let’s suppose Primary 1 ends at AAPL = x. Now let’s look at the possible retracements, and peg those retracement prices at some of the recent resistance/support levels. In particular, I thought of pegging a 38% retracement at the previous 1.v.(1) high of $215.59, a 50% retracement at the 1.iv low of $188.68, and a 62% retracement at the 1.i high at $133.50. Yes, I know this is quite arbitrary. Anyway, the targets I get for x (end of primary 1) are:
(x-215.59)/(x-82.33)=0.382 ==> x=$297.95
(x-188.68)/(x-82.33)=0.500 ==> x=$295.03
(x-133.50)/(x-82.33)=0.618 ==> x=$216.29 ...Good idea. I did similar computations occasionally. The waves to gauge completion of wave 1 using this method is to ascertain 1.iv and 1.ii. 23.6%-38.2% ret would completed around 1.iv and 68.2%-78.6% ret would complete around 1.ii. Looking at weekly chart and assuming wave 1 begins at $82.33, possible wave 1.iv is 188.68 and possible wave 1.ii is $133.50. You got it right, man
. Posting these type of price targets would make Mercel happy 
.I’ve been following your views. Playing video games with my son so too lazy to reply. Btw, I like your idea of max pain bias, give a good sense of the price direction. My max pain thesis is a lagging indicator, your bias is a leading indicator. Is nice to know that max pain thesis is indicating multi-month rally is still intact. I expect it that to change during wave 2. So I can safely say wave 1 has not completed yet.
Edit: Just like to add that Neely and Prechter still think is a bear market and has continued to short (stopped out quite a lot). I don’t discount this unless S&P manages to break above 1230. Will they be proven right or their reputations be destroyed once and for all? I’m wondering are they too old and can’t decipher waves or EW is too hard to read.
Edit2: Daily volume has been declining as price advances for the past three days.
[ Edited: 12 March 2010 02:33 PM by Mace ]Signature
Stay Hungry. Stay Foolish. - Steve Jobs
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Max pain thesis: So long AAPL closes above max pain on OE Friday, AAPL is in a multi-month rally. It usually closes near highest OI (calls) when in multi-month rally and near highest OI (puts) when in multi-month decline.
. Mar2010 Apr2010 Jul2010 Oct2010 Jan2011 Jan2012
------- ------- ------- ------- ------- -------
Max Pain and bias:
Pain $210.00 $200.00 $200.00 $210.00 $170.00 $190.00
chng +$10.00 - - - - -
Bias $206.90 $196.91 $203.45 $213.30 $168.94 $197.63
chng + $2.32 + $2.11 - $0.21 - $0.97 + $0.69 + $1.13
Diff - $3.10 - $3.09 + $3.45 + $3.30 - $1.06 + $7.63
Highest OI:
Call $220.00 $220.00 $250.00 $210.00 $230.00 $220.00
chng - - - - -$70.00 -
Puts $185.00 $200.00 $200.00 $175.00 $200.00 $180.00
chng - - - - - -
EW:1.v.(3).(i).[1]: $194.06 to $204.31, length=$10.25.
1.v.(3).(i).[2]: $204.31 to $195.71, length=$8.60, 83.9% retrace of [1]
1.v.(3).(i).[3]: $195.71 to [...]2.618*[1]=$222.54 passed
3.000*[1]=$226.46 passed, Fri HOD $227.73
3.618*[1]=$232.79Assuming [3] completed at $227.73, targets for 1.v.(3).(i).[4] are:
14.6% ret=$223.06 Fri LOD $225.75 [Edit: passed]
23.6% ret=$220.17 [Edit: Mon LOD $220.25]
38.2% ret=$215.50 near top of gap
50.0% ret=$211.72 near bottom of gap
[EDIT]
A few more:
0.618*[2]=$222.41 passed
0.764*[2]=$221.16 passed
0.854*[2]=$220.38 Mon LOD $220.25
1.000*[2]=$219.13
1.382*[2]=$215.85And more!
...[4].[ a ]: $227.73 to $220.25, length=$7.48, 23.4% retrace of [3]
...[4].[ b ]: $220.25 to $226.45, length=$6.20, 82.9% retrace of [a]
...[4].[ c ]: $224.98 to ...0.764*[a]=$220.74
0.854*[a]=$220.06
1.000*[a]=$218.97
1.382*[a]=$216.11
1.618*[a]=$214.35
(Jeez, these targets reproduce like rabbits… hehe see what I did there?
)
[/EDIT]Comment: Given the extent of the current move, I guess it’s possible these 3 waves up are (i), (ii), (iii) of (3) instead of [1], [2], [3] of (i). The other least bullish count I thought was this move as (1), (2), (3) of v, with a quite complex combo iv having completed in early Feb at $194.06. However, momentum seems too strong for a fifth wave here, which normally shows divergences as the final high gets formed. No divergence anywhere to be seen in this move.
[ Edited: 17 March 2010 11:19 AM by deagol ]Signature
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Max pain thesis: So long AAPL closes above max pain on OE Friday, AAPL is in a multi-month rally. It usually closes near highest OI (calls) when in multi-month rally and near highest OI (puts) when in multi-month decline.
. Mar2010 Apr2010 Jul2010 Oct2010 Jan2011 Jan2012
------- ------- ------- ------- ------- -------
Max Pain and bias:
Pain $210.00 $200.00 $200.00 $210.00 $175.00 $190.00
chng - - - - + $5.00 -
Bias $207.85 $199.28 $206.20 $219.69 $170.42 $198.49
chng + $0.95 + $2.37 + $2.75 + $6.39 + $1.48 + $0.86
Diff - $2.15 - $0.62 + $6.20 + $9.69 - $4.52 + $8.49
Highest OI:
Call $230.00 $220.00 $220.00 $230.00 $230.00 $220.00
chng +$10.00 - -$30.00 +$20.00 - -
Puts $185.00 $200.00 $185.00 $200.00 $200.00 $180.00
chng - - -$15.00 +$25.00 - -Comment: AAPL closed above Max Pain for March expiration. Multi-month rally is intact.
EW:
1.v.(3).(i).[1]: $194.06 to $204.31, length=$10.25
1.v.(3).(i).[2]: $204.31 to $195.71, length=$8.60, 83.9% retrace of [1]
1.v.(3).(i).[3]: $195.71 to $227.73, length=$32.02, 312.4% of [1]
1.v.(3).(i).[4]: $227.73 to ...[4]=0.146*[3]: $223.06
[4]=0.236*[3]: $220.17
Fri LOD $221.23, length $6.50, 20.3% of [3]
Mon LOD $220.15, length $7.58, 23.7% of [3][4]=0.764*[2]: $221.16
[4]=0.854*[2]: $220.38
Fri LOD $221.23, length $6.50, 75.6% of [2]
Mon LOD $220.15, length $7.58, 88.1% of [2]...[4].[ a ]: $227.73 to $220.25, length=$7.48, 23.4% retrace of [3]
...[4].[ b ]: $220.25 to $226.45, length=$6.20, 82.9% retrace of [a]
...[4].[ c ]: $226.45 to ...[c]=0.618*[a]: $221.83
[c]=0.764*[a]: $220.74
[c]=0.854*[a]: $220.06
[c]=1.000*[a]: $218.97
Fri LOD $221.23, length [c]=$5.22, 69.8% of [a]
Mon LOD $220.15, length [c]=$6.30, 84.2% of [a]If [4] completed at $220.15 then norm target for [5]=1.000*[1]: $230.40
[ Edited: 22 March 2010 11:18 AM by deagol ]Signature
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EW:
1.v.(3).(i).[1]: $194.06 to $204.31, length=$10.25
1.v.(3).(i).[2]: $204.31 to $195.71, length=$8.60, 83.9% retrace of [1]
1.v.(3).(i).[3]: $195.71 to $227.73, length=$32.02, 312.4% of [1]
1.v.(3).(i).[4]: $227.73 to ...
...
If [4] completed at $220.15 then norm target for [5]=1.000*[1]: $230.40So [4] did complete at $220.15, length=$7.58, 23.7% of [3], 88.1% of [2].
[5]=0.618*[1]: $226.48 (truncated) passed
[5]=0.764*[1]: $227.98 passed
[5]=1.000*[1]: $230.40 Wed HOD $230.20 [Edit: Thu HOD $230.97]
[5]=1.382*[1]: $234.32$230.20 could still be [iii] of [5] with [iv] max retrace to around $227 level (right now struggling to regain the highs). However, if $227 breaks then [5] and (i) most likely just completed:
[EDIT]
$230.97 seemed to be completion of [5], with the sharp decline from there into Thursday’s close taking out $227. But no, this market wants to keep running (Fri HOD currently $231.95). The interesting thing now is that Thursday’s move from $230.97 to $226.25 is too big for a wave [iv] of [5] but too small (and quick) for a wave (ii) of (3) or even [A] of (ii) and it can’t be a wave 1 (as in [ i ] of [A]) because of the higher high today. So the only solution I see right now is a wave [ii] of [5] which would significantly extend the target for [5]. I think I’ll wait until the session is over before working it all out.
[/EDIT]
1.v.(3).(i).[5]: $220.15 to $230.97, length=$10.82, 105.6% of [1]
1.v.(3).(i): $194.06 to $230.97, length=$36.91, 171.4% of (2)
1.v.(3).(ii): $230.97 to ...
(ii)=0.236*(i): $222.26 previous lower degree wave [4] price range
(ii)=0.382*(i): $216.87 gap remains unfilled
(ii)=0.500*(i): $212.52 gap partially filled
(ii)=0.618*(i): $208.16 below gapSince (i) lasted 29 sessions, I’m going to guess duration of (ii) is between 11 and 18 sessions (complete around Apr exp?), but I’m not sure how this duration guideline really works.
1.v.(3): $194.06 to ...
(3)=2.236*(i): $278.24
(3)=2.618*(i): $292.34
(3)=3.618*(i): $329.25
etc.(3)=1.618*(1): $237.60
[ Edited: 26 March 2010 10:43 PM by deagol ]
(3)=2.618*(1): $264.51
(3)=3.618*(1): $291.42Signature
