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Tuesday, February 12, 2013

Manuel Aparicio Theory. Natural Analysis: A natural way of looking at the markets.


Tuesday, February 12, 2013

Manuel Aparicio Theory. Natural Analysis: A natural way of looking at the markets.


Tuesday, February 12, 2013
Manuel Aparicio Theory. Natural Analysis: A natural way of looking at the markets.
http://manuelapariciotheory.blogspot.com/

Background:

After studying the two main market analysis theories (developed by Charles Dow and Ralph N. Elliott) which led to technical analysis and the various tools and indicators created over the years, we are left wondering about the validity of Dow's theory regarding the nature of price movement in that "all is discounted in the price" (that is, the news, earnings, fears and ambitions) and secondly, we also have doubts about the truthfulness of the premise that there is "smart money and dumb money" leading to the four stages of price movement (accumulation, big move up, distribution, big movement down). Both assertions, we believe, are in contradiction with the fractal quality of price movement. In contradistinction we agree with the basic tenets of Ralph N. Elliot's waves theory.  He was the first to note that price moves in waves and that these waves are governed by man's social nature.
Our theory, to analyze price movements in the markets, goes farther and considers that although it is human nature what governs price movement, it is nature itself, nature regulated by its own laws, what ultimately controls everything and therefore price movement. In other words, price is ultimately governed by the laws of nature. 
When postulating our theory we have considered that nature respects its laws with accuracy and that fractal theory inherently has to comply with these laws.
We have tested our hypothesis by using all the tools based on the Fibonacci sequence, countless hours of trial and error as well as we have counted waves. From here we have developed our new rules which we believe improve the accuracy and speed of predictions based on wave counting. 

Elliott determined the existence of 3 rules:
1) Wave 2 always retraces less than 100% of wave 1.
2) Wave 3 cannot be the shortest of the three impulse waves, namely, waves 1, 3 and 5.
3) Wave 4 does not overlap with the price territory of wave 1, except in the rare case of a diagonal triangle.


I have determined the existence of 3 new rules

New Rule 1: We have repeatedly observed and proves that Elliot's 3 rules and our 3 "New Rules" for use with the count of waves respect accuracy to the smallest fraction. 


New Rule 2: We have repeatedly observed and proved that retraces called: waves 2 and 4 (both measured from the start of the impulsive wave until it ends) will be determined by whether this retrace is less than or greater than 50%. If the retrace is less than 50% this will be a wave 4 and the impulsive wave will be a wave 3. If the retrace is greater than 50% this will be a wave 2 and the impulsive wave will be a wave 1. 

Rule 3: Waves 3,4 and 5 must be contained within a fan line that begins with wave 1 except for wave 2 that may be out of this fan line.

"Because accuracy, any failure, by less than this is, breaks the 3 rules of Elliott and our 3 new rules".

All rules must respect fractal theory.

Simplicity on waves count:

With our 3 new rules, wave counting is simple because, we only have to determine waves 2 or 4 by using 50% retracement, been careful with accuracy.

Quickness on waves counting:

Our 3 New Rules allow us to make decisions quickly and on real time.

Examples:

Case A)


SPX: 1928 to date. Daily log chart.

You can watch how primary wave 2 (62.28) retraces more than 50% (63.95) and cycle wave 4 (768.63) retraces less than 50% (767.29). We can also observe how cycle waves 3,4 and 5 are contained within a fan line that started with wave 1 on  07.08.1932. This 85 years chart shows how accuracy works on waves counting. 

Case B)

AAPL: 1.5 years, daily chart.

On december 29,2012, we called a truncated minute wave 5 (after we relabeled as a minor wave 5) so, an intermediate wave 3 (after we relabel as primary wave 3) was in place and we forecasted a downfall to 336.17 (subsequently we have predicted AAPL will fall to 300). This was because we weren't using our 3 new rules as we have presented it to the community this day
Why we call for a truncated minute (minor) wave 5?. Because the 50% retracement was 501.89 and the minor wave 4 retraced down to 502.82 (less than 50%), fulfilling our new rule 2. After, went up to 600 (+/-) as a truncated minor wave 5, retracing again down to 498.33 (greater than 50% or 501.89) going up again then retracing a third time to 501.74 ( greater than 50% or 501.89). Accuracy is the hardest rule. 

Also, minor waves 3, 4and 5 were contained within a fan line that begins with the wave 1. Fulfilling our new rule 3.

These were the post we published on our blog, at that time:






*Disclaimer:



The content on this post is provided as information only and should not be taken as investment advice. All post content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this post are solely the opinions of the author and are for information purposes only. Any investment decision that results in losses or gains made based on any information on this post is not the responsibility of the author. The author may from time to time make statements about certain investment vehicles and strategies, but it is not to be taken as investment advice. Again, it is just the author expressing his opinion only.These theory is being published only for validation by community experts. Once validated may be used for the purposes that the author considers.All information published in this post belongs to the author intellectually and commercially and may not be used by others for commercial use or to provide information to the general public. The author has used some information from wikipedia,stockcharts and Elliott wave principle.

Thursday, January 24, 2013

AAPL 16 year, weekly chart. Our primary wave 4 target at 300 continue its way.

We continue to monitor our forecast and we see that  primary wave 4 is probably in its wave 3 of wave c. We will continue to monitor and report.




AAPL 16 year, weekly chart.

Wednesday, January 23, 2013

$SPX "Big picture" bearish count.

our current count considers a bigger degree outlook with supercycle waves instead of cycle waves, as we posted yesterday. Our main count (bearish) will be negated if price exceeds the highs of 2007 at 1576.09. The bullish alternative is considering the cycle wave 2 instead of the primary wave A.



SPX, 7 years daily chart.

Monday, January 21, 2013

$SPX: Logarithmic monthly EW count,1928 to date.

We are sharing with our community our latest monthly Elliott waves count, from 1928 to date. This time we present the bill in a chart with logarithmic scale, which allows us a better visualization of all the waves. We are trying,also, to enlarge the degrees of the waves to reach Supercycle waves,what seems most appropriate to reality. This logarithmic and our first arithmetic scale counts, both indicate the next fall of markets, which would be the last downfall since the beginning of this correction process  of the large increase of price from 1972 to 2000 (2,000% in 28 years), as a cyclical wave C to complete supercycle wave II.


Monday, January 14, 2013

$AAPL: Mortally wounded.

EOD price has finish at minute wave 1 (orange) milestone but price is mortally wounded.


$SPX: At the end of the road?

Early we posted: "We are alert and watching the next price movements between these two dotted lines (1464.68 & 1474.51). The break ( down or up) of one of them will trigger bearish..." and tday, SPX low has been at 1466.06 and High at 1471.82. We think that last wave 4 and wave 5 of minute wave 2 (orange) are in place so tomorrow could start a minute wave 3.
We are sharing 2 charts. The first is an hourly charts and the second one is a 5 minute chart so we can count better the smaller waves.



60 min chart


5 min chart

Friday, January 11, 2013

$SPX: Accuracy,1474.51 is the first Elliott rule final proof, tomorrow

We have aplied our first rule, accuracy, so the third Elliott rule, at 1266.74 and, now, the first Elliot rule, at 1474.51 will tell us if the downfall is as close as the distance from the EOD price, today ( 1472..12) and 1474.51, namely 2.39 points. Todays high was 1472.30. My first rule: accuracy, not allow differences neitherone hundredth.


SPX, 2 year daily chart

Thursday, January 10, 2013

AAPL 16 year, weekly EW count. Relabel but , big picture forecast, is the same.

We are relabeling our 16 years, EW weekly chart count, changing truncate minute wave 5 (purple), we have mention before by truncate minor wave 5 (green).My predictions remain, but this downfall will be a bit higher than with the previous count. 


AAPL 16 years, weekly chart

Tuesday, January 8, 2013

Discrepancies with Dow theory that lead me to try out some inconsistencies in this theory # 2.

Continuing with our Discrepancies with Dow theory, we will proceed to analyze a second axiom, always based on the Elliott theory and our own observations and studies. Here we analyze the following axiom:

"Everything is discounted by the price Averages.Since the Averages reflect all information, experience, knowledge, opinions, and activities of all stock market investors, everything that could possibly affect the demand for or supply of stocks is discounted by the Averages."


We understand that one of the pillars of technical analysis is the study of price and this is commonly called the "King Price" and, we, also, understand that our position can and will generate technical analysts discomfort but that is what this forum is for, so participants can  generate discussions and our approach may be valid or not and in any case, I will have to prove my statements.


We must begin by describing the term fractal (wikipedia), which is the basis of Elliott theory:

fractal is a mathematical set that has a fractal dimension that usually exceeds its topological dimension and may fall between the integers. Fractals are typically self-similar patterns, where self-similar means they are "the same from near as from far". Fractals may be exactly the same at every scale, or, they may be nearly the same at different scales. The definition of fractal goes beyond self-similarity per se to exclude trivial self-similarity and include the idea of a detailed pattern repeating itself.Wikipedia.



Fractals example.

In the previous blog we disagree with the axiom that there is a "smart money" and "dumb money" on markets and now, basically with the same arguments, we are obliged to disagree with the idea that "Everything is discounted by the price Averages.Since the Averages reflect all information, experience, knowledge, opinions, and activities of all stock market investors, everything that could possibly affect the demand for or supply of stocks is discounted by the Averages.". If this is right, it means that if the price discount it all and secondly, according to fractal theory applied to Elliott waves, the same rules are true for any degree wave, we will need "information, experience, knowledge, opinions, and activities of all stock market investors, everything that could possibly affect the demand for or supply of stocks" each second, minute, hour, day, week,etc, so that the movement of these waves, which are governed by rules and respect the Fibonacci sequence will be identical in each wave of any degree. We have discrepancies with this Dow theory axiom.

Discrepancies with Dow theory that lead me to try out some inconsistencies in this theory.



We have always been interested in analyzing some of the main ideas of the Dow Theory which then have become axioms. Our interest stems from one of the basic ideas behind this theory such as proposing that there is a “smart money” and a “dumb money” or, the money of anyone who is not Smart , namely the general public. This single idea has intrigued me because it goes against one of the foundations of the Elliott waves theory ,which is that there are different degrees waves and the structures Elliott described also meet the common definition of a fractal (self-similar patterns appearing at every degree of trend) so, the 3 Elliott rules and his waves definition, both impulsive and corrective, to be applied in any degree, according to their fractal characteristic. If we accept the idea that there is a “smart money” buying the public, without they realize that there is this secretive process, prior to a rally or “smart money” selling to the public or   distributing quietly, before a downfall of Price, means that “smart money” has to be alert to any wave degree acumulation or distribution stage, say of a primary wave as well as a micro wave, because each wave degree has to respect the same rules as soon as has to respect its fractal definition.

Another major discrepancie of the above Dow theory axiom,  with the Elliott theory is that the Fibonacci Summation Series is the basis of The Wave Principle. Numbers from the Fibonacci sequence surface repeatedly in Elliott wave structures, including motive waves (1, 3, 5), a single full cycle (8 waves), and the completed motive (89 waves) and corrective (55 waves) patterns so The Dow theory “Smart money” has to continually tending to fulfill this mathematical sequence.
These profound discrepancies between the Dow and Elliott theories generated in me the need to devote myself to study in depth the Elliott theory , of whom I am her follower and admirer.
As we have announced in this blog, as well as in other important forums, we have proved the existence of 4 new rules. The first of which was filed as "accuracy".
The intention of this post is to go documenting and proposing for discussion, some basis of my studies and observations I have tested and will allow me to support the existence of my new 4 rules, to be used in the count of Elliott waves.

Thursday, January 3, 2013

$AAPL: Good question and my answer in the MTA board.


AAPL 9 months daily chart.


Comments

John Graef January 03, 2013 12:57 pm
Glad to see you have rules in place to adjust to market conditions. Do you have an alternate count?

Manuel Aparicio January 03, 2013 2:08 pm
John, thank you because your question mentions my new 4 rules to be used in the Elliott waves theory. Of the 4 rules, I have shared one of them with the public through my blog, please see: http://perutradercharts.blogspot.com/2012/12/our-seventh-ew-rule-acuraccy.html. Actually, I'm naming the rule "accuracy" as my first new rule. Indeed, based on my second new rule is that the minute wave 4 (purple) is already in place and could not go down more and as you see, then had be a small lower price, which makes me say that the minute wave 5 is already in place, as a truncate wave. For now, I can not share the other 3 new rules yet. We need the board's consideration and approval, officially.






$SPX: Price could be preparing a nasty "island top" to mantain bulls there for a while.


We have call a top yesterday using our $NYAD top or bottom pattern. Will be nastier for bulls if an island top ( gap before and gap after the top) because it will be like a jail in which bulls will have to wait a long time to be released.

$AAPL is bullish again.Could we see fresh new highs on 2013?. Why I don't think so.

We present these two charts, one daily, the other one hourly. 595.07 shall be the barrier that must hold off the price, so that it can continue its downward path. We're counting, for now, this bullish wave as a sub minute wave 2.


Hourly chart


Daily chart


Wednesday, January 2, 2013

$NYAD pattern says that, maybe the market has made a top.

$NYAD Pattern (my theory) to determine Tops and Bottoms ond the $SPX index ( The markets) 

My $NYAD pattern theory was published on September 28,2011 and since then , have been successfully tested. This theory is based on the judgment "always, everybody will be wrong and, allways, the market will be correct". The $NYAD,  is a breadth indicator based on Net Advances, which is the number of advancing stocks less the number of declining stocks so ,if the result of this subtraction is positive and is maintained at maximum level as 2500 is, means that everyone is wrong and because, the market is always right, the market has made a top. That simple.

Wednesday, September 28, 2011


$NYAD Pattern (thesis) to determine TOPs and BOTTOMs



 $NYAD 1 min timeframe chart.
 $NYAD 15 min timeframe chart.
$NYAD 60 min timeframe chart.

Observing the $Nyad charts I have notice that,in some opportunities, $Nyad chart can help us to determine when a TOP or a BOTTOM is developing. I have not read.nor hear someone has study this pattern and if this is the case I will like to be the one who first study this reliable pattern.Please If somebody have hear or have Knowledge about this issue make me Know about this.

The $NYAD pattern works in diferent timeframes. I have posted 3 charts,the first of 1m timeframe, the second one of 15 min timeframe and the last one of 60 min timeframe.

The $NYAD pattern to determine the TOPs and BOTTOMs developing consist in a flat or slightly up or down, movement during the particular timeframe and a change in the MACD during this developing, from positive to negative in TOPs and negative to positive in BOTTOMs.

I would greatly appreciate if you have some imput to give me.

Tuesday, January 1, 2013

I am looking for a sponsor to introduce my 4 new rules that will join the three existing Elliott waves.



I am a keen supporter of the theory of Ralph N. Elliott and technical analysis in general. I am also a passionate student of the Divine Proportion or golden ratio, discovered by the Greek Phidias (480-430 BC) and the number sequence introduced from the Middle East to Europe by Leonardo Fibonacci (1170-1250). The first study was a contribution to the geometry and the ratio is 1618 ... to one that was used by the Greeks in construction, among other buildings, the Parthenon, but also has been used throughout the centuries by many architects and artists of all nationalities. 
The second study was a contribution to mathematics and has led many observers to study her amazing relationship with nature.  What joins both studies is Phi = 1.618 ...
This introduction is because my interest in both, the Elliott waves and Phi,  has led me to study in depth how both are more related than what Ralph N. Elliot studied and bequeathed to mankind.As I mentioned at the beginning of December in http://perutradercharts.blogspot.com, I have observed and tested four new rules to add to the 3 rules of Elliott in the study of Elliott Waves.