Thanks guys. I'm interested in Elliot Wave theory. But if it fails as a predictive indicator with regularity, it will leaving me scratching my head and my balls.
You can rest assured it will and does. Every significant major test on things like this I have seen, yield mixed to disappointing results. Similar for retracements, etc. But that does not dissuade the believers of hocus pocus
Remember when he wrote this predicting gloom and doom http://www.amazon.co.uk/Crest-Tidal-Wave-Wiley-Investment/dp/0471979546 Maybe he should have stuck to surfing if he is so much into WAVES
Exactly. With all due respect to our illustrious Moderator ( nkhoi ) who obviously has nearly 15 times the number of posts that I do, I have developed a pretty solid foundation of technical analysis keeping things pretty simple, using Elliott Wave along with some simple moving average analysis and fibonacci ratios. I have been refining my methodology over the last 15 years or so with a friend. I have been trading the market since 1980. In any event, the term impulsive is used by Elliott Wave analysis to describe an advance ( or decline ) that is reflective of the primary trend in the market. It is ( in this case ) an advance that shows up as a 5 wave sequence. Initially, I thought that the move off of the lows that were registered in March was "corrective" in nature, meaning that the wave structure of the advance was "overlapping" ( wave 4 would dip back down into the peak of wave 1 on the hourly charts, etc. ). Elliott calls such an advance a "B" wave. "B" waves usually see a lot of short-covering and often take out the old highs before they collapse in Wave "C", sending the market into a decline/correction again. As the market advance pushed into April, the nature of the wave sequence that was unfolding appeared to no longer show "overlap" and thus indicated to me that we were in fact in an impulsive wave structure that identified and was reflective of the primary trend advance. My minimum target for this advance is 1507.15 with the high possibility that the SPX will move towards the old highs made in 2000 at the 1552 level over the next 8-12 weeks. Without getting into too much detail ( that will most likely go "over" most people's heads ) in this discussion, it is very significant to note that the end of this most recent advance will terminate a much larger primary WAVE 3 that has been in effect since the SEPTEMBER 2004 LOW at 1053 SPX ( see next post with the attached chart for projections ). The reason that many people do not understand Elliott Wave very well ( and take pot-shots at it like our illustrious moderator ) is because they fail to CORRECTLY IDENTIFY just where the market is in regards to the theory. One has to break things down from the Monthly charts, to the Weekly's, to the Daily's, to the Hourly's, etc. - - - As you can well imagine, putting all of this together can be quite difficult. There are a whole host of alternative counts along the way because like a hiker in the middle of a huge National Forest, it is quite easy to get lost and focus on the bark of the tree in front of you, let alone the actual tree, let alone the grove of trees in that particular part of the Forest. The neat thing about Elliott Wave is that as the trend matures, the alternative counts fall to the wayside, and one obtains a pretty clear picture as to where the market is at. Given that this WAVE 3 has been in existence since September of 2004, the alternate counts are no longer a factor. Termination of this advance lies dead ahead this Summer. What is important to note here is that given the duration of Wave 1, we can use some fib ratios to obtain a duration for Wave 3, and thus the termination of Wave 3. Such analysis targets the month of JUNE 2007 for a TOP of intermediate proportions. After this top has been registered, the market will head into a corrective WAVE 4 downward sequence that should last 12-14 months. A final WAVE 5 will then take the market towards a final target ( approx. 1792 SPX ) before a MAJOR SECULAR BEAR MARKET begins. It is also interesting to note that the timing of this last advance looks to PEAK with the November 2008 Election. This would suggest that the next market cycle will not be very kind to whoever the future administration will be, be they Democrat or Republican. While these projections may seem outrageous a quote from Ralph Elliott says it all, âone of the hardest elements of this theory is believing what you see.â
Landis82 a question for you if I could ask? I have been recently learning 123 swing, fib extensions and fib projections. Aren't these very similar to EW? I am finding them very useful to use when used in the proper areas of the chart.
sound pretty subjective to me. Anyway I frequently receive newsletters from EWI run by R. Prechter and they had been calling for the 'big one' forever thus that is how I perceive EW prediction. If you are more adept at EW than him then my hat is off to you, peace.
See SPX attachment: According to Elliott wave 3 cannot be the shortest. W3? is shortest at 265.98. So W1 = 537.80(W1?+W3?) and W3 at least has to equal W1 or larger...this market is going to where no market has gone before??? Or Elliott theory is sh...just a theory.