P1: PIC/PIC c05
August 18, 2008
Printer: Yet to come
HIGH PROBABILITY TRADING STRATEGIES FOR ANY MARKET AND ANY TIME FRAME
FIGURE 5.13 Reversal at Time Target
a correction may take, but the ES is in a position to complete an ABC, three-section correction. Typically, an ABC correction is complete by the 62% time retracement and near the 100% alternate time projection. The maximum recent high-to-high count has been 18 15-minute bars. All three of these time factors are within three 15m bars the morning of January 8. If the ES continues to advance into this narrow-range time zone, we would be very alert to the price and momentum position for a probable corrective high and go-short strategy for a probable decline to a new low. Figure 5.13 shows the outcome. The ES made a Wave-C high on the 8:30, 15m bar, just one bar prior to the three-bar range projected for a Wave-C high. The ES was at the 50% retracement with the momentum OB. An ideal time, price, momentum, and pattern setup to complete a corrective high followed by a decline to a new low. Not every corrective high or low is made when all four factors of time, price, pattern, and momentum are in place for a reversal, but many are. Your job is to identify in advance the conditions with a high probability outcome and be prepared to take advantage of those conditions. Thatâ€™s the objective of all technical analysis and trade strategies.