Lynx, True the divergences are a problem, and fuel for the bearish scenario by many. Yes, also with the Fib price targets, especially when the markets get into unchartered territory, like they did through teh 1980's, 1990's. Time targets, time cycles, planetary conjunctions and all the rest, I've never really found very useful. Each bull/bear market has it's own characteristics.
Sorry, none that I know of. I read Prechter's first two books: the Works of Elliott, and the Elliott Wave Principle They provide a good foundation to work from. The rest just takes a lot of serious work. I'm still learning myself
The lack of literature on EW is a good sign, means that not many people understand it. A good contrarian indicator would be the number of books written on a particular subject. If you go to the Barnes and Noble of Union Square (for the ones that live in NYC) you'll find tons of books on how to be as smart as Warren Buffy. Thanks to those books every troll in America with a few extra bucks is sure that he will be as good as Buffy to find talent, a good indicator that we have to play against value.
Yes, and those who don't understand it are to the first to say it doesn't work, and to criticize EW has some sort of smoke and mirrors trick. Makes me laugh, cause I know they are missing out on a great market indicator. There are some books, but none that I would recommend. tony
The Elliott Wave is not a mystery, at least my version of it. Simply because, what I call Objective EW, has little subjectivity to it. Allow me to explain. EW is best used for identifying long term trends, sorry not day trading. When a trend is established, one can anticipate what is to follow in terms of impulse and corrective waves, by applying some basic rules from the original theory; i.e. third waves can never be the shortest, and second/fourth waves must alternate in pattern, etc. In my approach I use two basic TA concepts: trend reversal and momentum. You see trend reversals on bar charts often: a lower low in an uptrend, a higher high in a down trend. Momentum, conversely, is a simple rate of change: day 'y' compared to day 'x', on an ongoing basis. In the early 1980's, I developed MMI (market momentum indicator) to verify the wave count as it unfolds. It has worked to perfection for over 25 years. As a bull or bear market unfolds, the MMI unfolds as well, in an almost identical pattern. When read properly, one can actually see the waves unfold in the oscillator. See chart below: This is how it works. The MMI is a simple 40 day rate of change oscillator: a fibonacci 8 weeks. It simply compares todays close with the close of 40 trading days ago. Simple right? However, it also has a few rules to help interpret the momentum cycles: a complete cycle consists of 5 waves, it can subdivide just like waves, it is labeled just like waves, and the 4th wave is always lower than the second...always! This is how one can tell when a price wave is subdividing without the need of guess work (subjectivity). In the chart below, I display the bull market thus far, and (as best I can) the MMI. Notice how waves (1 - 4) all line up with the indicator, and momentum (4) is lower than (2). Also, notice the subdivision within wave (3) and how 4 is lower than 2. This is Classic Objective EW, the Nasdaq is beautifully displaying a very clear bull market. Now, since the wave (4) momentum low, we've had four waves and four momentum waves. This is the key to this bull market! The fourth momentum wave HAS NOT exceeded the second, thus as before in wave (3), wave (5) is extending. I've marked in RED on the chart what has already occurred, and in BLACK what has yet to occur (not to scale) in the MMI. If you keep up with this thread, or visit my blog: http://spaces.msn.com/members/caldaroEW/ you can watch the bull market unfold before your very eyes, just as I have for over two decades. And, it works perfectly in bear markets as well. Good trading! Tony
Cool blog Tony, I'll keep an eye on it. I work in Union Square and I spend a lot of time in Barnes and Noble drinking coffee and reading stuff. I you are ever around let me know.
Thanks for the thread Tony. I am working way more on autotrading stuff than anything else nowadays. If I get the account size to where I need to trade longer term I really want to look into EW, meanwhile I added the recommended books to the wish list at Amazon.