The problem with EW is that although one can find many examples of 5-wave sequences on a Monthly, Weekly, Daily, and Hourly Chart, on many occasions these 5-wave sequences "subdivide" even further in Wave 3, ( becoming what is called a "complex" Wave 3 ) making the methodology even more difficult to identify without going back over it in hindsight. Often when a rally or Wave goes much further than fibonacci retracements allow, Prechter then winds-up labeling it as a B-Wave, which even if correct, does not help the trader much at all. Secondly, as is often the case Waves are mislabeled and miscounted and only look CLEAR in hindsight! As for myself, I have in fact found VALUE in identifying 5-wave up or down sequences in an effort to give me a "target" or "objective" for a move, understanding what Wave 2's and Wave 4's look like when they follow the "Rules of Equality". Other than that, EW is very difficult to trade by. I don't recommend it.
Well, I'd like to say thanks to all for the replies. My feelings on the elliot wave principal mirror waggie's - I can't really trade it, but it is interesting. If you read Niederhoffer's "Education of a Speculator," you can see that Prechter\ewi has the wrong approach to prognostication. He actually makes real predictions, as opposed to speaking in generalities, maybes and could be with no time frame. However, if you read his FAQ's, his answer to why he sells the info includes, "Just because you have it, doesn't mean it will help your bottom line." The biggest eye opener is the number that responded to the poll in the bull camp. I don't think you can completely rule our Dow 15k, and if it does happen, I'm sure Prechter just will revise the timing of his "Grand Supercycle."
==== Got an interesting postcard from elliotwave recently; titled Q; What is the job of a bear market rally? Nice postcard card, uses exact same picture as Tony Saliba's derivatives book; dont see any sign of bear market since March-DIA, SPY, QQQ. Buying long late yesterday, 50 day moving average area; didnt answer poll because couldnt find an answer exactly. === Love learning- Solomon, trader king
"I can't really trade it" .. it is "speaking in generalities, maybes and could be with no time frame". (mBear) That says it all. And yet it still seems to endlessly engage a lot of otherwise sensible minds. You need accurate comparative prognostication .. thats timing, expected move size, uptick/downtick in front of the expected move, etc; all close accurate stuff. Wave goodbye to the whole Elliot Wave enchilada .. you might as well consult the heel of your shoe for a better prognosis.
I think these type of people like Prechter are fascinated with the potential collapse of western civilization, like Dr. Devorkian was fascinated with death. Not much reason to think their stuff will be much use for trading. I did see some Gann stuff actually work at one point, it pointed out trades that nothing I have ever developed did and it caught moves in areas where my TA was completely indecisive, so you never know.
I agree that the EW guys have lost some touch with reality. Robert Miner is another respectable EW guy that called a top in the s&p and in gold a while ago. he even wrote that the wave structure that predicts this top has "90% probability". After it kept shooting higher he wrote "although it's going higher, it's still making a top". Sounds like those academy professors that keep saying that "the fact that we don't know the answer actually make us ever smarter". While a top may very well be in the making, someone who shouts "Bear" week after week regardless of what the market is doing, is not someone to pay attention to imho. Eventually there will be a big or small bear, except when your timing is off by months... you'd better keep quiet.
It is since 20 years that every year he calls for secular top It is all the more strange that his master Elliott had normally forecasted that the pick should be around 2012 (as for my model it is around 2008 but I don't pretend like the Elliottists that the market is really fractal and can be applied to any scale without proving it and proving it with so few datas than yearly is not rigorous). He can't ignore that can he .
Top of the year possibly (I predicted 9938 more than 2 months ago we didn't do it but approach it on globex at 9915) but THE top of all tops there is no sign yet all the more so that these scale depends on fundamentals and fundamentally it depends on demography and that also Prechter does know it since he had also pointed heavily on that and this is no "elliottist" discovery but classic economic knowledge. And demography should worsen around 2010 in fact even more for Europe than America but what affects America affects all the World and vice versa since it is the foreign money that sustains US market.
I guess the members at ET just do'nt appreciate the immense value of your contribution. Can't wait for your analysis of the poll results.........fascinating stuff !