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Cattle Call: Know When To Hold Them
Never "getting married" to a trading position is one of the keys to a successful trading career.
A wise trader once said:
"I have two loves in my life: Women and markets. The first one, I'll marry the moment I feel a life-long attraction. And the second -- they'll never be more than my fleeting mistresses."
Smart man. Reason being, you never want to be locked into a relationship with a trading position that you can't get out of at a moment's notice. The trick is -- knowing when the time has come to end it BEFORE anyone gets too hurt.
That's where Elliott wave analysis succeeds where other technical methods to trading fall short. In addition to using Fibonacci price and time ratios to calculate critical price support and resistance levels, every single one of the 13 recognizable Elliott Wave patterns comes equipped with unbendable rules – and a handful of more flexible guidelines.
Memorizing these strict parameters enables you to know when your assessment of a market's trend is right on target, and when it's way off base – before getting in too deep.
(Live & Feeder Cattle: Lassoing In An Opportunity. In the latest Daily Futures Junctures, editor Jeffrey Kennedy presents original price charts and objective insight into where cattle prices could soon be. Act Now)
Take, for instance, Elliott Wave International's chief commodity expert Jeffrey Kennedy's recent take on Live Cattle futures. In the February 13 Daily Futures Junctures "Weekly Wrap-up," Jeffrey presented the following close-up of Cattle. (Some labels have been removed for this publication)
Here, Jeffrey labels the uptrend from the January 29 low as wave 1 and wave 2 of a yet-to-unfold five-wave impulse to complete a larger-degree wave (C). Critical to this interpretation is the ability of prices to obey the THREE cardinal RULES of FIVE-wave impulsive patterns. These are:
- Wave 2 never retraces more than 100% of wave 1.
- Wave 3 is never the shortest among waves 1, 3, and 5.
- And, wave 4 never ends in the price territory of wave 1.
On February 18, Live Cattle prices fell below the start of wave 1 (at 83.60), breaking the first rule listed above and signaling to Jeffrey that NOW was the time to re-assess the scenario and reap Elliott wave analysis' risk-management benefits. And, in the latest, February 19 Daily Futures Junctures, he does just that via brand-new price charts and in-depth analysis of the developing trend in Live Cattle. (AND: Feeder Cattle).
Right now, a complete Futures Junctures Service subscription includes: The entire February 19 Cattle analysis (written AND video), ALL four previous Daily Futures Junctures AND their featured markets, AND the long-term sister publication Monthly Futures Junctures.
Click HERE to get started – risk-free.