EbbChart Primer (Public Thread)

[ebbnflow]

TNA using ebbchart signals (JAN-MAR 21): 31/55 56% (buy signals -- 15/27 56%; short signals -- 16/28 57%). Gain: +7.34%.
TNA using buy and hold (JAN-MAR 21): 27/55 49%. Gain: +38.76%.

Last year, TNA using ebbchart buy/short signals had an edge of 3% (52% vs. 49%) over "buy and hold" TNA. Gains followed suit (+154.64% vs. -52.67%). This year, the edge has more than doubled at 7% (56% vs. 49%), but surprisingly, the gains are lagging (+7.34% vs. +38.76%). The ebbchart may give us the edge, but we can only expect what the market is willing to give. :suspicious:

TNA (2011): MAY (W 11, L 10, +1.32%); JUN (W 12, L 10, +3.07%); JUL (W 13, L 7, +28.02%); AUG (W 10, L 13, +27.66%); SEP (W 12, L 9, +14.66%); OCT (W 10, L 11, +32.42%); NOV (W 10, L 11, +32.89%); DEC (W 10, L 11, -26.05%). TNA (2012): JAN (W 14, L 6, +17.05%).

EbbChart TNA signals (MAY-DEC): 88/170 52% (buy signals -- 52/102 51%; short signals -- 36/68 53%). Gain (compounded): +154.64%. Positive on all months except for December. A total win-percentage of 52% doesn't look much, that is, until we see the losses on the flip side of the trade. In the same period, TNA only had a 49% win-percentage (loss of -52.67%). What a difference an edge as small as 3% can do! :nuts:

 

[ebbnflow]

It's times like this when having the ebbchart in your toolbox helps. If you thought of getting back into stocks three days ago, then seeing the "short" signals on the ebbchart would have given you pause...waited for a better entry point and perhaps saved yourself some losses. TNA chart has been updated -- you can click on my signature below to see the ebbchart's daily buy/short signals for this ETF.

 

[law87]

It's times like this when having the ebbchart in your toolbox helps. If you thought of getting back into stocks three days ago, then seeing the "short" signals on the ebbchart would have given you pause...waited for a better entry point and perhaps saved yourself some losses. TNA chart has been updated -- you can click on my signature below to see the ebbchart's daily buy/short signals for this ETF.

Your system is a little difficult for me to comprehend, can you explain it a little bit?

Also you showing long TNA as of today :?

 

[tsptalk]

Hey law87. Ebb will probably respond to the comprehension part of the question, but just a reminder that this thread is not part of Ebb's premium threads so he wouldn't (or shouldn't) discuss the current positions here.

You can find that here Premium Services Talk and clicking on the "EbbChart" sub-forum.

Thanks!

 

[ebbnflow]

Re: EbbChart Primer

Your system is a little difficult for me to comprehend, can you explain it a little bit?

Also you showing long TNA as of today :?

Law87, the charts could be a little overwhelming at first, but all it does is keep track of the patterns' performances daily. Only one pattern (8 in all) shows up on the ebbchart each day, so you can understand the charts by simply comparing the changes made today from yesterday.

I learned to use the ebbchart's triple patterns to guide the TSP system. I also take into consideration the daily patterns laid out on the ebbchart. The patterns are given ahead of time -- one to two weeks ahead of time -- making decisions to move a lot easier.

As of yesterday, TNA using the ebbchart signals has a winning percentage of 57% (TNA at 48%). Non-subscribers will have to wait for the TNA update tonight to find out its position. Signals are provided in advance only to current ebbcharters (or is it ebbchartists).

-- ebb

 

[ebbnflow]

Re: EbbChart Primer

I've just updated the TNA chart and happy to report that the winning streak continues. It stands at 7 now, 3 more and we'll equal the longest one we've had back in Jan. 04-18. A couple of weeks ago, the TNA system was down -14.38% for the month, today it's up 18.76%.

Winning Percentage: 59%. Total Gain: +22.89%.

Anyone here following the ebbchart signals for TNA?

 

[ebbnflow]

Re: EbbChart Primer

The TNA chart has been updated (click on signature below). The system was short TNA today (+1.70%), so the winning streak continues (currently stands at 8). Sometimes I get to thinking that maybe reality bends just to meet the ebbchart's expectations. Okay, time to cut down on the sci-fi movies. :blink:

Winning percentage: 36 W, 24 L (60% vs. 48% for the buy and beholders).
Short signals: 19 W, 12 L (61%).
Buy signals: 17 W, 12 L (59%).

 

[ebbnflow]

Re: EbbChart Primer

I just discovered the links on my signature not working properly. I forgot Tom made a change to this thread's name. All fixed. :embarrest:

 

[ebbnflow]

Re: EbbChart Primer

Before doing the triple patterns' timeline, I believed that it was better to use only the major patterns for entry (5-5-5 or 8-8-8) and exit (1-1-1 or 7-7-7). But, as the chart below shows, every triple pattern can and should be used. Even the first bearish green pattern 1-1-1 turned out to be right -- 100% F-fund produced gains, while a 50% S, 50% I-fund move would have resulted in losses. Another benefit is the bigger gains attained. :nuts:

 

[ebbnflow]

Re: EbbChart Primer

TNA (-0.87%) didn't cooperate with the ebbchart's buy signal last Friday. I was really looking forward to having a couple of 10-baggers this year. Instead, we had to settle for a 9-day (MAR 19-29) and a 10-day win streak (JAN 04-18). Getting 10 right calls in a row is no walk in the park. Flipping a coin 10 times, and guessing the right outcome in all 10 will have an odds of 1 in 1024 (.5 ^ 10). The ebbchart's mechanical calling system was started back in May of last year. So, to put it in perspective, we've only had less than a year's worth of guesses to accomplish something that should take 3-5 years. Lucky to be ahead of the curve, I say.

YTD win percentage: 37 W, 25 L (60% vs 47% for buy and beholders).
Short signals: 20 W, 12 L (63%).
Buy signals: 17 W, 13 L (57%).
Gain: +25.12% (vs. +39.16% for the buy and hold crowd).

The ebbchart signals have increased the winning edge to 12% (60% vs. 47%) and it's also closing in on the gains category (+25.12% vs. +39.16%).

 

[ebbnflow]

Re: EbbChart Primer

After watching the movie "Moneyball," it dawned on me that we're probably using the sabermetrics approach to market timing through the ebbcharts. Sabermetrics or evidence-based stats are now employed in all of baseball. It all comes down to the percentages and the edge we can get out of it.

 

[ebbnflow]

Re: EbbChart Primer

This is a comparison chart on how the triple patterns did (2007-2012) vs. the flip side of the trade. All twelve patterns end up making the right call.

Bearish green patterns.

Pattern 1-1-1: 100% F (gain +0.80%) vs. 50% S, 50% I (loss -0.42%).
Pattern 4-4-4-4: 100% F (gain +2.27%) vs. 50% S, 50% I (loss -10.01%).
Pattern 4-4-4: 100% F (loss -0.82%) vs. 50% S, 50% I (loss -1.49%).
Pattern 7-7-7: 100% F (loss -0.08%) vs. 50% S, 50% I (loss -2.96%).
Pattern 2-2-2: 100% F (loss -0.66%) vs. 50% S, 50% I (loss -34.22%).
Pattern 7-7-7: 100% F (gain +5.71%) vs. 50% S, 50% I (loss -0.66%).
Pattern 2-2-2: 100% F (gain +4.24%) vs. 50% S, 50% I (loss -19.18%).

Bullish red patterns.

Pattern 6-6-6: 50% S, 50% I (gain +4.59%) vs. 100% F (gain +4.40%).
Pattern 5-5-5: 50% S, 50% I (gain +31.99%) vs. 100% F (gain +11.09%).
Pattern 5-5-5: 50% S, 50% I (gain +26.97%) vs. 100% F (gain +4.70%).
Pattern 3-3-3-3: 50% S, 50% I (gain +12.39%) vs. 100% F (loss -1.21%).
Pattern 8-8-8: 50% S, 50% I (gain +8.75%) vs. 100% F (gain +2.03%).
Pattern x-x-x: (still up in the air).

 

[ebbnflow]

Re: EbbChart Primer

We can also observe in the chart below that between 2007-2008, seven different triple/quadruple patterns made appearances. But, right after the market crash bottom (March 09, 2009), guess what triple pattern came out of hiding? It's none other than the ebbchart's most bullish contrarian pattern -- pattern 5 (red-red-red). Amazingly, no other triple pattern tried to interfere during its two-year reign (Apr. 20, 2009 - Jun. 09, 2011). To top it off, bullish red pattern 5-5-5 showed itself not once but twice to drive the point home that we're in a bull run. A real bull run -- unmitigated and uncontested.

 

[ebbnflow]

Re: EbbChart Primer

They say not to hold the exchange-traded fund TNA for a long period of time because it's meant to be traded. Now, I'm thinking it only applies if your system doesn't know where the market is headed. I am assuming that TNA began in Nov. 19, 2008 -- i can't get more data beyond this. In light of this discovery, I would abandon timing TNA using the daily ebbchart signals and just go with the flow of the triple patterns. Imagine, four trades in less than four years and a gain of +837%. The chart below shows TNA using the triple patterns.

 

[ebbnflow]

Re: EbbChart Primer

Speaking of triple patterns, what are the odds of one turning up on the ebbchart? Normally, a number (1-8) showing up three times in a row would be: (1/8 or .125) x (.125) x (.125) = .001953125 or 1/512.

But because it doesn't matter what number comes up first (1-8), we only need to multiply it two times to get the odds: (.125) x (.125) = .015625 or 1/64.

I started the ebbchart back in Jan. 16, 2007, so that gives us about 5 years and 4 months. There are about 252 trading days in a year or 21 per month: (252 x 5) + (21 x 4) = 1344. 1344/64 = 21.

According to these calculations, we should expect at least one triple pattern every 64 trading days, or 21 triple patterns by now. Close enough, we actually have 13 valid wave patterns and 3 null wave patterns for a total of 16 triple pattern occurrences. The most triple pattern we've had in a year was 5 back in 2008 and the least was one in 2009. That said, triple patterns don't occur randomly -- all four valid triple patterns that showed up in 2008 were bearish green patterns and the only one appearing in 2009 after the market crash bottom was a bullish red pattern.

 

[ebbnflow]

Re: EbbChart Primer

Triple-pattern strategy: Plenty of triple patterns (14), but using only six moves in less than six years. Here are the moves:

1st move: (100% F) Bearish pattern 1-1-1 (+0.80%). Total gain: +0.80%.
2nd move: (50% S, 50% I) Bullish pattern 6-6-6 (+4.59%). Total gain: +4.59%.
3rd move: (100% F) Bearish patterns 4-4-4-4 (+2.27%); 4-4-4 (-0.82%); 7-7-7 (-0.08%); 2-2-2 (-0.66%); 7-7-7 (+5.71%). Total gain: +6.42%.
4th move: (50% S, 50% I) Bullish patterns 5-5-5 (+31.99%); 5-5-5 (+26.97%). Total gain: +67.70%.
5th move: (100% F) 2-2-2 (+4.24%). Total gain: +4.24%.
6th move: (50% S, 50% I) Bullish patterns 3-3-3-3 (+12.39%); 8-8-8 (+8.75%) vs. 100% F (+2.03%); 3-3-3 (-8.04%); 8-8-8 (+4.96%). Total gain: +18.00%.

All six moves resulted in gains -- even during the market crash of 2008. I won't say if we have a new triple pattern (as of this writing) in deference to current subscribers, but six moves??? That's the power of cycles at work -- without it, everything is just a crapshoot.

 

[ebbnflow]

Re: EbbChart Primer

Triple-pattern strategy: Plenty of triple patterns (14), but using only six moves in less than six years. Here are the moves:

1st move: (100% F) Bearish pattern 1-1-1 (+0.80%). Total gain: +0.80%.
2nd move: (50% S, 50% I) Bullish pattern 6-6-6 (+4.59%). Total gain: +4.59%.
3rd move: (100% F) Bearish patterns 4-4-4-4 (+2.27%); 4-4-4 (-0.82%); 7-7-7 (-0.08%); 2-2-2 (-0.66%); 7-7-7 (+5.71%). Total gain: +6.42%.
4th move: (50% S, 50% I) Bullish patterns 5-5-5 (+31.99%); 5-5-5 (+26.97%). Total gain: +67.70%.
5th move: (100% F) Bearish pattern 2-2-2 (+4.24%). Total gain: +4.24%.
6th move: (50% S, 50% I) Bullish patterns 3-3-3-3 (+12.39%); 8-8-8 (+8.75%); 3-3-3 (-8.04%); 8-8-8 (+4.96%). Total gain: +18.00%.

All six moves resulted in gains -- even during the market crash of 2008. I won't say if we have a new triple pattern (as of this writing) in deference to current subscribers, but six moves??? That's the power of cycles at work -- without it, everything is just a crapshoot.

 

[ebbnflow]

Re: EbbChart Primer

Besides the market crash of 2008 (3rd move), the triple-pattern strategy also had gains during the summer crash of 2011 (5th move). To show how simple it is to recognize a triple pattern on the ebbchart, here's that bearish pattern 2-2-2 making an appearance last year (June 10-14, 2011). The strategy's move to the F-fund gained +4.24% while the S-fund lost -17.24% and the I-fund lost -21.12% (June 10 thru Sep. 22). There's nothing simpler than the triple patterns -- it's either there or not. Confirmations? What's that?

Note: Daily ebbchart patterns are posted a couple of weeks ahead of time.

 

[ebbnflow]

Re: EbbChart Primer

Triple-pattern strategy (4th move): Right after the crash of 2008 and before the summer crash of 2011 (see chart above), the ebbchart produced a couple of bullish red patterns (5-5-5) on April 20, 2009 and June 29, 2010. Amazingly, during this two-year bull market run, no other triple pattern showed up. I didn't know what the triple patterns meant back then, but that doesn't mean it didn't happen. It did, so for new subscribers, here's another look at the patterns:

April 20-22, 2009

June 29 - July 01, 2010

 

[ebbnflow]

Re: EbbChart Primer

I will keep adding past comments that can help folks know more about the ebbchart's triple patterns.

Like I said before, there is nothing simpler than the ebbchart patterns. Data are gathered mostly from price and volume. I use known cycles for timing purposes. There are no unnecessary parameters and if conditions to gum up the works. Simply put, what you see is what you get (WYSIWYG). The TSP system I will be using in 2013 will solely be based on the 90-day cycle of triple patterns.

Triple patterns are aberrations or anomalies that mark turning points in the market and need to unwind its bear or bull cycle phase, hence the importance of the 90-day cycle.