For those readers who have been monitoring this page for awhile, you'll know that it's been continually stressed that Wave59 works best when a lot of different tools come together at a specific point in time to generate a signal. This approach of looking for the "sweet spot" in the market takes patience, but allows traders to enter into trades with very little risk and large potential reward.
In looking over today's action, one of these "sweet spots" jumped out at me. Ok, I admit that I didn't see this one in real time like some of the setups on the other pages, but I would have if I had been paying attention! In any event, it's very instructive, so let's take a look:
The point we are interested in is the one marked with the big red arrow. This is an obvious buy signal for two reasons. The first is that we've just counted down to a gold 5 on the 9-5 Count, which tells us that the market has completed a full price cycle downwards and is now at a place where we could easily have a turning point. The second reason is the bullish divergence signal that has set up on the pink UltraSmooth Momentum indicator at the bottom. This indicator is making a higher low while price is making a lower low. 70% of the time, these divergences between price and momentum are resolved in the direction of momentum, so it's good to watch this tool.
These tools are familiar to Wave59 users and readers of this showcase page, so no need to go into more detail about them at this time. The tool that might not be so familiar is the Planet Rise/Transit/Set indicator that plots as vertical lines on the chart. Each vertical line represents a point in time when a particular planet is doing something interesting to people in Chicago. You'll see that these lines frequently cause something to happen with price action, even if it's only a few ripples. The vertical black line right at our red arrow means that the Moon's node has just risen above the horizon.
Ok, so the Moon's Node just popped up over the horizon. What is so special about that? What it means is that for this particular point in time, the node is HOT. Let's pull out our ephemeris and see what we can see:
This is a snapshot of the planetary positions at our red arrow. The node is the black line at 50 degrees, pointing to the upper right. The little red triangle right at the edge of it is the Ascendant, or in other words the location of the eastern horizon in Chicago. Since the Node is rising, the two are right on top of each other. This is an important point on the ephemeris because it is 120 degrees from Jupiter and the Moon as well as 120 degrees from Chiron and the Sun the other direction. This is a very powerful astrological pattern called a Grand Trine.
The way astro patterns connect to markets is through price. Price can be considered to be just like a planet itself, and it moves around our ephemeris just like the other planets. Take a look at the price ring placed around the dial. It's the blue circle that starts at 0 and runs 36 points. So I'm using a conversion factor of 36 points of price = 360 degrees of planetary movement.
The price at our low point was 1121.00. We want to see where this price falls on the ephemeris wheel, which can only contain prices from 0 to 36. So what we do is just keep subtracting 36 points (a full circle - remember 36 points = 360 degrees) until we get the number in range. If you do this, you'll find that 1121 = 5. Look where that price is in relationship to our pattern. It's exactly on the Node/Ascendant spot!
Now let's go a little further. 1121 is our low, but the ES moves in ticks of 0.25. So if we count the current price in ticks, we'll get 1121 * 4 = 4484 ticks. This is a pretty huge number, so well just go back to our basic scale of 360 price units = 360 degrees. So in this case, our prices range from 0 to 360 on the wheel. We need to get 4484 to within our range, so subtract 360 until you find a good number. 4484 - 4320 (360 x 12) = 164. 164 is the Jupiter/Moon corner of our Grand Trine. So we've got price hitting our pattern in two locations.
So this is a case when we've found a "sweet spot" on the ephemeris. We've got a Grand Trine with the Ascendant on one corner, and we've got price making a very close connection to this pattern. And of course the standard technical stuff like the 9-5 Count and UltraSmooth Momentum really helps the cause as well. The great thing about this setup is that you know the astro pattern would break if price fell much beyond 1121.00, which means you can use a very close stop. As indicated, price turned around and moved up 7 points into the close.
This may be a bit confusing to those unfamiliar with the ephemeris, but it's a good one to study because it's all so clean. Once you get good at converting price to degrees in this way, you'll be amazed at the other market sweet spots that start jumping out at you.
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