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28 March 2010

Lessons in Technical Indicators

Lessons in Technical Indicators: Part 3
How to use technical indicators to complement your wave analysis

By Nathaniel Williams
Tue, 23 Mar 2010 11:30:00 ET
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Want to Learn More? Read Part 1 and Part 2 of this series.
The MSCI Asia Apex Index combines 50 of the largest stocks in
Hong Kong, Taiwan and Korea. The index also provided Elliott Wave International's Asian-Pacific Short Term Update editor Chris Carolan an opportunity to teach his subscribers how to use three of his favorite technical indicators to anticipate and capitalize on trend changes.
 
Enjoy this free lesson that comes from Chris Carolan's on-demand, online trading course "3 Technical Indicators to Help You Ride the Elliott Wave Trend." 
You can order "3 Technical Indicators to Help You Ride the Elliott Wave Trend" for $49, or you can subscribe risk-free to The Asian-Pacific Short Term Update, The European Short Term Update, or Global Market Perspective for the same price and get the trading course FREE!
MSCI Asia Apex Index - from "3 Technical Indicators to Help You Ride the Elliott Wave Trend"
Chris's primary tool for spotting trend reversals is the Wave Principle. Through wave analysis, he saw an impulsive "wave five of five." In other words, prices appeared to be at both a short-term and long-term high. One of the Wave Principle's rules is that a correction -- or a trend reversal -- occurs after the completion of a five-wave impulse, so Chris's wave count suggested that the index's next move would be down.
 
Chris then used his favorite three technical indicators to verify his forecast, as he demonstrates in the trading course.
 
First, the Relative Strength Index (RSI) noted a divergence, symbolized by the red dot, at the top of wave five. A divergence occurs when prices make consecutive highs or lows while losing momentum, and it means that a given market might be overbought or oversold. After divergences, trend reversals often ensue.
 
Second, the Digital Signal Filter (Jurik RSX), an enhanced RSI, also suggested that the index was overbought. The blue line on the chart hadn't yet started to retreat, but it was clearly reaching a topping point. This was another signal that the trend was nearing its end.
 
Third, the interaction between the index and the Keltner Channel provided a clear indication that a reversal was imminent. When prices breach the channel wall and appear to be reacting contrary to the channel's trend, you can expect a corrective price reversal. 
MSCI Asia Apex Index - from "3 Technical Indicators to Help You Ride the Elliott Wave Trend"
As you can see from the chart above, Chris's wave analysis was correct. The index had reached the top of a five-wave impulse, and prices responded by initiating a steep downward correction. What's more, all three of Chris's indicators supported his forecast. Using the Wave Principle and technical indicators isn't like looking into a crystal ball, but you can see how helpful they can be to help you spot the end of a trend -- or the beginning of a new one.
 
This is just one of Chris's many lessons about using technical indicators to complement your wave analysis. You can learn more today in his on-demand, online trading course "3 Technical Indicators to Help You Ride the Elliott Wave Trend." In this 42-minute video, Chris shows you how to get the most out of each of these indicators, using detailed charts, real-world examples and practical insights.
 
You can purchase "3 Technical Indicators to Help You Ride the Elliott Wave Trend" for just $49 here -- but please don't! Get it FREE when you start your risk-free subscription for the same price to one of the following services:
(Already a subscriber to Global Market Perspective, European Short Term Update or Asian-Pacific Short Term Update? View the trading course here.)

2 comments:

  1. Good blog.
    You are researching well.
    Thank you.

    ...(I'd be pleased if you exchange reciprocal link with me.)
    my blog:
    http://forex-chart-analysis-and-a-cat.blogspot.com/

    ReplyDelete
    Replies
    1. So sorry for the late reply . . .
      I have been posting but not looking for comments.
      I will from now on.
      Sure no problem wrt reciprocal link.
      just leave yours here and I'll comment on your blog.

      Delete