You vs. Market Trend: One Way to Know of a Coming Change

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You vs. Market Trend: One Way to Know of a Coming Change
The August 3 Elliott Wave Junctures video lesson shows you how the double-key trend reversals are the single "key" to unlocking a market opportunity

By Nico Isaac
Wed, 08 Aug 2012 18:45:00 ET

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When I was traveling through Europe many years ago, a friend and I took an overnight train from Barcelona to Amsterdam. We shared a sleeper cabin with this really cool guy who kept us up till all hours with one amazing story after another.

In one of those yarns, he told of a man he met on a similar train through Switzerland. The man was 81 years old and, according to lore, had been living full time on the train for over 30 years. When our storyteller asked the man why he stayed, he gave this simple answer:

"I knew where to get on the train. But nobody ever told me where to get off."

This, for me, epitomizes the chief flaw of some methods of technical market analysis. Fact is, many traditional "techies" (as I call them) rely on a very narrow selection of 1 or 2 measures to guide their interpretation of price action -- such as the Relative Strength Index, Candlestick patterns, or Moving Averages.

And, on their own -- i.e., without Elliott wave analysis -- those indicators are great for identifying the dominant trend at hand. But they fall short of providing any objective measure for knowing when and where that trend may end and another opportunity will begin.

(For example, a market can show an oversold/overbought RSI for a long time without a reversal, but if you know within which wave of the Elliott wave sequence an extreme RSI reading does suggest a reversal at hand, you are ahead of 99% of other RSI users.)

For over a decade, EWI's senior analyst Jeffrey Kennedy has adopted a two-fold approach to pinpointing potential turning points on price charts: Elliott wave analysis combined with a carefully chosen arsenal of traditional technical indicators.

And, in his August 3 Elliott Wave Junctures video trading lesson, Jeffrey shows you "one of his most favorite" of all known technical tools: the "Double-Close Key-Reversal Bar Pattern." That's a mouthful, so we'll shorten it to DCKR moving forward.

As for what this pattern is, Jeffrey cuts through the complicated mumbo-jumbo often used to explain the DCKR -- AND in 30 seconds flat, presents the simplest how-to lesson on the bullish and bearish formation of this pattern I've ever seen.

Then, Jeffrey uses the remaining 4 minutes to show you how the DCKR pattern identified very significant and profitable turns in trend in the real-world price action of 3 markets, including this chart of the DJ Wilshire 5000 Composite Index below.

First, in late March 2012, a pair of bearish DCKR's signaled the onset of a multi-week selloff. And then, in early June, a bullish DCKR identified a multi-week advance.

Jeffrey goes on to show you how "applicable the DCKR is on multiple time frames" in the 60 minute and 1 minute charts of Cisco Systems Inc. and the SPDR S&P 500 ETF Trust, respectively.

And there, on those two charts, Jeffrey presents the video lesson's main attraction: How a trader can work with the key reversal bar of this pattern to acquire the brass tacks of a "reliable" trade set-up, such as:

What prices must do FIRST to initiate a buy or sell order
Where to place your protective stop
How to use the range of the bar to create a "well-defined" area of risk

So, what are you waiting for? Know where to get off the train of opportunity before it's too late. Watch this invaluable, 5-minute Elliott Wave Junctures video today via a risk-free subscription.

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Tags: Elliott wave, elliott wave junctures, Elliott Wave trading, Jeffrey Kennedy, technical indicators

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