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Friday, November 14, 2008

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Steven_737

Thank you Yelnick

Canadian Money

If Neely's system is a good one, and it doesn't even have to be better than pure Elliott, perhaps someone can keep track of his correct and incorrect short term (I assume day trader) predictions. Then, we can review the results in say 1 years time. We will then have some scientific data to compare rather than just the long theoretical discussion presented above.

Any volunteers?

CM

DG

Yelnick,

I commented here on Eventhorizon's thoughts about Neely, traditional Elliott and x-waves:

http://yelnick.typepad.com/yelnick/2008/11/the-hopeless-triangle.html#comment-139077424

I think my main issue is still the rule of alternation in complex corrections and the fact that diametrics and symmetricals don't exhibit it, if they were in fact simply complex corrections with x-waves inserted. I'm not saying that's exactly what Eventhorizon was implying, since I don't want to put words in his mouth.

It's probably very clear what I think and I think that Neely's new structures are valid and insightful. I also think his concept of "reverse alternation" in triangles provides useful information for complicated-looking moves that don't conform to impulse rules and channel differently from other triangles. From a structure standpoint, I think those, and his "neutral" triangle, are major contributions to wave theory.

We won't know for certain if this past month has been a diametric until we see what happens over the next few days. If we take out Thursday's low before moving to 1000-ish on the S&P, I suspect the count will have to change because the rules for diametrics require "a" and "g" to resemble one another and "a" was that first huge rally off the early October low. This afternoon's drop is already bigger than any retracement during the "a" wave rally looking at Neely's daily plot chart, but I don't think that's a count-killer because we probably should get a bigger retracement during the last up wave of a correction than we got during the first up wave. If the diametric is still the "best fit", I suspect it will just mean that wave f was not complete yesterday, but will complete at the next new low, but I don't know if the price-time relationship between f and b will be correct if that becomes the count.

Overall, the biggest problems traders and analysts encounter are ego and bias. As ironic as it might seem to some, I think Neely has the least ego and bias of the wave "gurus" I've read. With so many rules in his system, there is no room for ego and bias. And since he's written them all down, as you have shown, any of his readers can call him out if he breaks a rule to support a bias.

Ham Actor

I agree with Sean's astute observations on the previous item. Not only is DP's track record on this blog appalling, but this count does Elliott a dis-service

There is overlap which means that to be valid we need to call the structure a leading diagonal triangle which would be fine except that the wave 5 is far too long. I could only give this count credibility if there had been a brief over-through and subsequent reversal into a wave 2 from higher levels.

While the triangle is now invalid I am comfortable that we are in a complex wave 4 and will break new lows, with a significant bottom around 14 Dec.

The rules, whose ever they are must be followed to be a valaid theory.

Eventhorizon

Nice post Yelnick.

DG, I think I understand your point. I was of the view that Neely was like a taxonomist who dug down and identified and specified in detail different varieties of the "cats and dogs" that Elliott identified. Whereas you are saying Neely discovered Symmetrical Hamsters and Diametric Rabbits - if I may stretch my analogy to (beyond?) breaking point!

Regarding the details of the post above ...

"If wave-B takes less time than wave-A, a Triangle, Diametric or Symmetrical is forming.

In all expanding and contracting Triangles, wave-A will be the most violent segment of the formation, even if it is the smallest in price "

These two statements seem to be contradictory, unless I am misunderstanding something. For Wave A to be the most violent even if it is the smallest in price implies it has the steepest slope. If this is the case, and wave B is longer in price, how can wave B take less time?

rohrbach

Another great post Yelnick! I enjoy the more frequent updates especially in this volatile time. Be nimble or dead.

Steven_737

Yelnick,

How does an ending diagonal strike you?

http://farm4.static.flickr.com/3192/3031054736_ce1ca4ca7b_o.gif

If the wave I have marked was a decent 5 element structure, I would be voting for a nested 1-2-1-2, going for the big 3 of 5.

David

I have followed EWI for 20+ years, including Neely's. Results have been disappointing. They both are trying to sell their service for $, from those curious Ewavers.

All the new theories or new discoveries are nothing but gimmicks to cover up their inability to forecast accurately...giving a new name on a dead horse to fool you guys. I can guarantee you all that soon there will be another new discovery, may be called Riverflow theory, when the current one sucks.

We all know their track records, for both Prechter, and Neely, they have been wrong more times than right, worse than a broken watch! IT BEATS ME that you guys still treat them like gurus, gods like experts...wake up guys.

If you want trading profit, you need to do your own analytical work yourself. Following Neely or Prechter or CNBC will lead you to LOSSES...a time proven fact no one can deny.


DG

"Whereas you are saying Neely discovered Symmetrical Hamsters and Diametric Rabbits - if I may stretch my analogy to (beyond?) breaking point!"

Yes, although to take up part of your analogy, I guess that if you considered "dogs" as Elliott's "impulses" and "cats" as Elliott's "corrections", then Neely discovered the jaguar and the leopard, after Elliott discovered the lion, tiger and panther.

"For Wave A to be the most violent even if it is the smallest in price implies it has the steepest slope. If this is the case, and wave B is longer in price, how can wave B take less time?"

If I understand the rules, I think this rule about the time of A versus B and the slope of A versus B's slope would only apply to a contracting triangle, so the rule should read "If wave-B takes less time than wave-A, a contracting Triangle, Diametric or Symmetrical is forming", I think. If I were you, I'd ask Neely about this, too.

yelnick

DG, with a little work, I think ewave can be simplified to a sufficient level of accuracy. I have learned from Neely's service that often staying out is the right move! That handles the imponderable situations. If a trader has 20 good calls a year, that is enough to do really well. Like counting cards in Vegas vs craps. Pile on when ready. As I have mentioned, Zoran was on his way. Maybe I can cajole my friend who knew Zoran to pick up his work. Or maybe we create an "open source e-wave" project and attempt to build such a simplified view from contributors like you, eventhorizon, EN, DP, dlu and many others who have posited really interesting wave ideas that occasionally peg it better than the big guys.

Alan Trould

Okay, forget what I wrote. I miss the DP and evolving c-nt stuff. It kind of spiced up the dryness. My daughter be damned.

So this volatility is really something! Like a top wobbling before it falls. Makes me think we're in for a long, convincing move, be it up or down.

yelnick

737 - hmmm. Diagonals or wedges usually come at a 5 or C wave, so this would fit; they also usually come after a fairly strong move, which is why the STU saw a truncated fifth as a possibility with an ending diagonal at the leg b bottom before the election. It was ending the very violent wave 3 down into Oct10. You are doing the same thing, and with a diagonal of larger scale, which would also fit the huge down move. It seems to have broken in "3s" so far, which also fits. And wave 4 runs into wave 1, which is the most striking characteristic of a diagonal. Wave 3 cannot be the shortest, which means wave 5 has to be within SP1004 - SP819 or 185 pts.

If it ends around the lower trendline, it may hit SP788, the daily low in the Jul02-Mar03 bottom. Diagonals often have a throw-under in the final wave, so it may go the full 185 pts down. If the current wave 4 ends around SP953 as your upper trendline suggests, wave 5 at worst would bottom above SP768, which is the intraday low in Oct 2002. Wow! There is a lot to like about this.

If you would like to construct a first level post, I will put it out as a guest blog & see how the rest of the readers interpret.

dlu

I was keeping track of How many times Neely was stopped
out and changed his count recently. To my horror he was
hopping and changing his his count so much that I stopped keeping track of his supirior waves.

DG

David,

I don't think there is anything wrong with trying to sell a service for money. It's the backbone of the entire economic system. Of course there has to be a customer benefit. I know that when I pay for Neely's service, I am looking for one thing, which is can his rule-based system of trading make me money, if applied just as he says to apply it? I lost money with him in the past, but I firmly believe now that it was because of my own faults as a trader, not his. I'm very excited to be back reading his thoughts with a more mature attitude about trading. We'll see if that lasts, of course. It may turn out that the only thing paying Neely's rent in La Jolla (which is a damn pricy location, if that's where he's actually at) is subscription fees and not trading profits at all. In which case, I'll lose money and that'll be that. I have a full-time job that pays a pretty good chunk of change to fall back on, thankfully.

I don't know Prechter's work nearly as well, although I know that he was bearish during most of the run up from 2003 to 2007, so that's not a good track record.

I have been following Neely since early 2006 and so far he was correctly bearish in the spring of 2006 (although he ended up being too bearish initially), correctly bullish later that summer, when his initial bearish forecast was proven too bearish, and bullish beyond that all the way to new highs in the S&P, and correctly bearish as of last October and correctly super-bearish for the past month. I have all the e-mails he sent out to both subscribers and non-subscribers (his "public service" e-mails he sends at what he considers crucial moments in the market and, yes, I am sure they are also meant to drum up subscriptions, too) at those points in time. If he had sent out an e-mail making a macro-call that turned out incorrect, I would know about it. If you had moved your portfolio at each of those times, you'd definitely be outperforming the market over the past two-plus years. At the very least, even when his forecast turned out too bearish, you would have gotten out of the way of a 10% decline over a two month period in the spring of 2006. The only big move he's missed on in that timeframe was the February/March 2007 correction. For a little while, he thought that was the start of a bear market, but then he got back on track and started calling for new highs. In fact, he thought we'd make a higher high in the S&P than we did, topping around 1700. When we didn't, he got bearish and look where we are one year later. Seriously, that is a very good macro track-record and his timing was usually within a week to a few weeks to the actual start of the move he was forecasting, so I'm not sure what you're talking about. Over the past couple of weeks, he's shifted from bearish to bullish to bearish, but that's on a pretty micro-level and is possibly the result of the "fact" that we're now in an x-wave, which isn't exactly the standard type of correction and reversal one would expect after the end of a major pattern like the one he has completing at the early October low. Again, I have documentation of all this.

If you want to argue all the way down to the individual trade level, there just isn't any way to only have winning trades. But, what Neely does is always focuses on entering trades at the precise moment when, if your trade is a loser, it's the smallest possible loser under the circumstances. Then, once in, he reduces risk to zero ASAP. His whole method is based on the premise that forecasting edges are hard to come by, so trade as if you don't have one by minimizing downside risk (even if the market is totally random a trader should want to minimize risk, right?). Or, he just ignores set-ups that can't show adequate risk-reward ratios, even if the set-up looks valid, and doesn't recommend a trade.

So, I don't think I consider Neely a "god", when I know that he's going to be wrong in his forecasts a significant percentage of the time, especially at shorter time-scales, although, as I've shown, he's made 5 great macro-calls and 1 failed macro-call over the past 32 months. I do think his risk management for stop-loss setting and position-sizing, as presented, is perfect and I work in risk management and know something about the topic. I would not change a thing about it, in fact. So, unless you assume there are better forecasting methods than Neely's, his risk management system alone should be good for the average trader's returns, since the average trader is probably sub-optimal on risk management techniques. Can you show me someone who's made correct macro-calls at all 6 of the junctures I mentioned? Have you, since you seem to think that doing your own analysis is the only way to profits? I think it's one way, but the other ways are to pay someone to be a mentor in the trading game or to go work for a trader and both are just as valid, so long as the bottom line shows results.

David

DG,

I am not sure if I'm talking to someone from Neely corp. Apparently you sound more like it from Neely from the way you wrote your comment.

All I can say is, the past fact showed anyone following Neely advice would have lost their shirts and his track records are so bad that I cannot imagine any sane trader or investor would pay him money for losing their shirts.

To invest 1% of capital every time is not necessary good risk management...it is just to show you that the chances of him getting his projection right is very low! It is another way to keep his foolish subscribers on hook for longer before they cut off their subscriptions.

All in all, if you still want to pay Neely or Prechter to loose your capital in order to make you feel good about yourself, no one will stop you.

Min

David:

I totally get what you are saying. I never got involved with Neely, but I did get a nightmarish introduction to trading from EWI.

I was able to recover all my horrendous losses following their calls only after learning this stuff cold and supplementing the wave counts with additional research.

This year I cracked 7 digit profits for the first time. There is absolutely no substitute for doing your own thinking and being your own advisor. EWIs services are seldom worth receiving even on free weeks except to confirm an ocassional contrarian play.

I "bat" about 60% - 65% and also manage to run a large business. Why those who do this for a living can't get it right more often is way beyond me. I did track Hochner's success for several years and that was around 10%.

I post this to caution newbys away from getting too caught up with Elliott. It is a powerful tool which can work well but you have to know it cold and you also have to be willing and bright enough to discover the additional tools needed to make it work for your particular goals and tolerances this is something that paid services will DEFINITELY not provide you. Discovering and learning all this takes time and if this learning process is rushed, you can lose your shirt and more.

The ending diagonal mentioned by Yelnick a few posts up is "getting warmer".

Jack

Hey Yelnick.

I like the transition you seem to making with your blog, allowing some wavers a shot at guest posts and then the herd (your readers) commenting on what they see.

I think it will add to the quality of the blog and the quality of the commentary. Thanks.

Cheers

John

If someone is willing to sell their tricks for making money in stocks then they have no tricks. Nobody with a system that works would ever run the risk of ruining it.

Steven_737

If someone is willing to teach new surgeons how open-heart surgery is performed, then they don't actually know how to operate. Nobody with the knowledge to operate on hearts would ever run the risk of losing his monopoly on heart operations.

If someone is willing to teach at a University how to analyze balance sheets and understand business plans to decide if they will lend money to a company, then he knows nothing about it. Nobody with an analysis method that works would ever run the risk to let other banks (would be bankers and their employers) have a chance to success.

If someone develops a formula to estimate proper options valuation and is willing to publish it in a paper and teach the formula at Graduate School, he has no formula.
Nobody with a formula that works would ever run the risk of ruining it.

Hey body, are you serious?
How long have you been at his?
Have you not heard that there is no secrets in trading?
There are methods and tricks, and you have to buy the books and study or pay the educators/coaches to teach you.

'nough said.

Steven_737

No way to edit typos, so I repeat:

How long have you been at this?
Have you not heard that there is no secrets in trading?
There are methods and tricks, and you have to buy the books and study or pay the educators/coaches to teach you.

I don't mean to upset you John;
But I think otherwise.

Steven_737

Too many typos, sorry.

I meant to write:

Hey buddy, are you serious?

DG

David,

I assure you that I do not work for Neely. I simply think that he is on to something by taking a more rule-driven approach to e-wave. He has nearly eliminated "guidelines", which, let's face it, is where bias can come in and ego. If someone can find a "guideline" that supports a count they've put a lot of time and effort into developing, my experience is that 9 times out of 10 they will (it's called the "confirmation bias"), whereas with a rule-driven approach, they would take their losses while they are smaller and move on to the next set-up.

I showed you six specific instances of major turning point (10% or more moves) in the S&P over the past 2 and a half years where Neely was correct within anyone's definition of a reasonable timeframe and price range. Did he pick the "top tick" or "bottom tick"? No, and he is not trying to. You keep saying that "his track record is awful". Can you please supply the same level of detail on his track record that I did? I want to know what specific calls he made that turned so sour as to cause someone major losses. And please don't talk to me about times when he recommended trades with big stop losses because that's precisely why the 1-2% of capital at risk standard is used! If you ignore that advice, you simply can't blame that on Neely, it is your own fault and you let greed get in the way of prudence. Also, Timer's Digest has consistently ranked Neely in the top timers in the S&P and Gold, and he has also shown up in their top 10 for Bonds. I don't know if Timer's Digest tracks the Euro, which is the other market he counts.

The fact that you would connect that risk management rule with the supposed accuracy of forecasting it implies tells me that you might need to do more studying of trading theory because nearly every top trading advisor I read says to risk 1-2%, regardless of your trading methods. Also, so long as your risk-reward ratios are in line, you can be wrong multiple times in the short-term, but if you are right in the long-term, you end up ahead even if your percentage winners is low. A practical example of this is setting up right now in the S&P, possibly. Neely wants to go short around 1000 and he's already given specifics about where to place the stop. His ultimate target is around 500. The risk-reward ratio on that trade is over 6 to 1, so even if he's wrong the first five times he tries it, as long as he's right on the sixth try, he will make money. Without going into too much specifics on that trade, let me assure you that it's doubtful he would even make 6 tries at it because the time requirements of the pattern wouldn't allow it, really.

If either of us seems to have underhanded motivations in these comments, it's you. You come in, make blanket statements with no evidence to back them up, and ascribe motivations to people you don't know, such as saying I am paying Neely to "make myself feel better" about losing money. What the heck is that? I don't know you or your experiences in trading, but that's your own fault because you are not supplying details from which I can figure out the answers to those questions. I'm not talking about personal details, of course, but trading details.

My P&L is up 31% over the past month following Neely and could have been up more if I hadn't missed one trade and gotten into another too early (I figured price was near where it need to be to enter and I was burned when price never went there and reversed instead). I don't take every single trade he recommends, although I do take the time to understand why he recommends them and there are times when I stick with something after he would recommend getting out, so that 31% isn't entirely representative, but I'll still take it, especially since the market was what, down 25% over the past month? Come on, man, give me a break with your sob story. You screwed up by taking bets that were too big for your account and busted out and now you're blaming Neely. If that's true, you need to do a self-evaluation because you are playing the victim in life and that is never a good idea.

Min, I like the fact that you at least admit you don't know Neely. I don't know EWI that well but from hearing others talk about them and comparing that to my experience with Neely, it sounds like they are night and day. That's just one man's opinion.

John, Neely assumes, and I think rightly so, that the average person will be turned off by his approach because it requires too much memorization of rules and too much time analyzing markets to ensure your counts fit those rules. However, are those really "tricks" or is it just a more rigorous method than anyone else has put out there? Unless you want to be a "buy and hold" investor (I am, more or less, a "buy and hold" guy in my 401(k)), why wouldn't you want to use wave theory to trade? In Mastering Elliott Wave, Neely wrote, "Only after an identifiable pattern is complete is it safe or desirable to enter a market. This helps avoid over-trading and prevents entering the market when there is little potential. On the other hand, it promotes trading when the probabilities are greatly in your favor and risk is at a minimum. The Theory also allows for the placement of very objective stops, enabling you to know when in time and where in price your interpretation is wrong. What else could a trader ask for?" Please, tell me, what other "tricks" are there that would be more useful than these techniques, so long as you agree that there are such things as "identifiable patterns" in the market, which, if you don't, is a whole different discussion. Let's stipulate for the purposes of this discussion that there are no such things as "crystal balls", OK?

DG

DG, with a little work, I think ewave can be simplified to a sufficient level of accuracy. I have learned from Neely's service that often staying out is the right move! That handles the imponderable situations. If a trader has 20 good calls a year, that is enough to do really well. Like counting cards in Vegas vs craps. Pile on when ready. As I have mentioned, Zoran was on his way. Maybe I can cajole my friend who knew Zoran to pick up his work. Or maybe we create an "open source e-wave" project and attempt to build such a simplified view from contributors like you, eventhorizon, EN, DP, dlu and many others who have posited really interesting wave ideas that occasionally peg it better than the big guys.

Posted by: yelnick | Friday, November 14, 2008 at 06:05 PM

Yelnick, I'm flattered to be on that list of contributors. I like the ability to have some interactions with others interested in wave theory, for sure. If Zoran's friend wants people to bounce ideas off, let me know and I'll provide some contact information to enable myself to participate in the discussion for as long as I'm wanted. I see learning wave theory as a life-long pursuit at this point, so I'm game.

On "simplicity vs. accuracy", it is a tradeoff, like all other crafts, I think. Striving for too much accuracy leaves you with analysis paralysis and going too simple will destroy your accuracy. That's one reason why I try to keep my eye on the other side of the trading coin, which is risk. I guess I'm willing to put up with the additional rules striving for accuracy because I think it reduces my risk. I wish I had learned this a while back and I wish I did it perfectly.

I agree that sometimes you need to stay out to let more clarity emerge (Rule of Reverse Logic, right? When there are many wave count possibilities eliminate any that don't put you in the middle of a correction and if you're in the middle of a correction, you probably don't have a good set-up to trade anyway). Don't force a trade. I mentioned that my Neely portfolio is up nicely this month and that is largely due to one monster gain on the big dump in October, with many small gains and small losses besides. I pyramided into that trade, which is something Neely doesn't seem to do, but that I learned from Jesse Livermore's book. The nice thing about it is you can always keep only 1-2% of your portfolio at risk by adding appropriately when the market is moving in your favor and your wave count tells you there's more to come. Commissions on incremental trades are a source of friction, but if your accuracy is above par, you should be able to overcome that.

Steven_737

"If you would like to construct a first level post, I will put it out as a guest blog & see how the rest of the readers interpret."

Yes. Good Idea, Yelnick. I would appreciate feedback.

Ok. Let the analysis be presented as it has evolved.

I have been watching the eurusd and the dollar index.
They broke out of their respective triangles, but on the fifth sub-wave of the first wave following the breakout, price action was really strange. The stock market was falling but the euro was holding on, as if there was intervention.

I categorized the fifth sub-wave as an ending diagonal.
The price action on the euro and the dollar index since that point in time, is such that leads my analysis to the possibility of an ending diagonal formation on both.

@EU#
http://farm4.static.flickr.com/3234/3031130151_1de4825f37_o.gif

@DX#
http://farm4.static.flickr.com/3281/3031970246_921e5009c7_o.gif

I further looked at the ES and the NQ. Price action could be forming an ending diagonal as well. Here is a chart depicting price going up to the level of recent ES pivots, in the 943 (11-5-2008 low) to 960 (11-10-2008 overnight high) area, to establish point 4 of the ending diagonal.

http://farm4.static.flickr.com/3192/3031054736_ce1ca4ca7b_o.gif

The @NQ# chart, showing price going to the 1280 price area (62% retracement from recent high, to establish point 4 of the ending diagonal.

http://farm4.static.flickr.com/3055/3032153074_aff8c57978_o.gif

Steven_737


Now, from the triangle analysis on @EU# and @DX# I have in mind the timing based on the triangle apex.

@EU#
http://farm4.static.flickr.com/3038/3031130259_4492cb6212_o.gif

@DX#
http://farm4.static.flickr.com/3160/3031130295_c2b0c50f05_o.gif

OK, this suggests it is time for the 5th wave of the ending diagonal to occur. Monday after Friday's price action and after G20 will likely be an important day for currencies.

How about the stock market?

Since USD and ES moves are correlated lately, there is considerable probability for the 5th wave of the ending diagonal triangle of ES and NQ to take place, starting this coming Monday. Please note that I am referring to probability, not certainty; after all correlations do not mean one to one correspondence.

@ES#
http://farm4.static.flickr.com/3179/3031130331_453758d6af_o.gif

@NQ#
http://farm4.static.flickr.com/3241/3031970368_0690726689_o.gif

Steven_737

As a final note, here are the Murray Math levels that may attract prices:

@ES# levels 781.25 and 812.5
http://farm4.static.flickr.com/3239/3031228903_0cfed129c4_o.gif

@NQ# level 1062.5
http://farm4.static.flickr.com/3011/3031228939_0d935206ae_o.gif

As always, observations and suggestions are welcome.

Steven_737

Wave Rust

DG,
A quibble with the 1 'miss' out of 6 by Neely.

Although the s&p dow, etc were not begining bear markets in february '07, it was the beginning of the bear market for banks and the bkx. yen strugled higher but it was a dance of death for dollar yen.

the last few months have given me a different appreciation for that break down of that important sector of the stock markets.

to me, that is now the warning sign i didnt see. i didn't see it for what it really was. that warning sign said "bridge out ahead", "stop go back" "light at the end of tunnel is a big train" etc.

i won't forget that one for a long time.

wave rust

John

Hi, Steven--

I'm not sure I understand you but let me be clearer about what I meant. We may well have no argument!

The markets are hard to predict because there's constant feedback and success sews the seeds of its own demise. As soon as enough people perceive a pattern their anticipatory behavior kills it. This sort of phenomenon doesn't exist among heart surgeons, veteran and student, because hearts and heart disease don't change in patients as surgical methods change among doctors.

Prechter, Neely, and others who claim to help you make money do not. They help you lose money inasmuch as 1) They are willing to take your subscription fees and 2) They imply that you can trade their advice with more confidence than you could trade anyone's advice.

Anyone with a brain and sense of history could see what an anomalous time we've lived in and how our unusual debt levels and pervasiveness make us extremely vulnerable to financial and economic problems, acute and long-term.

Best,
John


DG

John,

I'm not sure I understand what you mean when you say "As soon as enough people percieve a pattern their anticipatory behavior kills it". When price reaches the end of a pattern, say a C wave in a flat, of course there are going to be some people who perceive it immediately and some who don't. Otherwise, who would sell or buy from the ones who perceive it? Martians? No, other human beings who, if the pattern really was the end of a C of a flat, were "objectively" wrong in selling or buying there, depending on if they expected a continuation of the C wave or they expected its reversal.

So, strictly speaking, if one accurately predicts the end of a C wave and buys or sells the next reversal, one is taking one's profits from those who interpreted the pattern incorrectly. The fact that there were sellers or buyers at that price who took the wrong side of the trade proves that what you say about "enough people" anticipating the pattern's conclusion is a logical impossibility. Even if I picked every single bottom and every single top by some method I published, I would bet you a million bucks I would always find someone to take the opposite side of my trade, if only to try to prove me wrong or someone who hadn't read my book or who had read it but not fully understood it.

Also, and another thing I think Neely is saying, is that possibilities in the market psychology in aggregate changes as more participants become aware of wave theory. That's why new patterns have emerged, in his opinion. If wave theorists were only 1-2% of the market in the 80's and were earning good returns, maybe they are now 10-20% of the market and the 1-2% of the market is now people using Neely's brand of wave theory. I certainly heard of Prechter long before I heard of Neely.

DG

Wave rust,

Sure, but I hesitate to condemn a man for not passing a test he didn't take. Neely wasn't counting the BKX, he was counting the S&P 500. Energy, of course, took off and dragged the market higher despite the banks.

A very good wave counter, Dominic Mazza from Trading the Charts, who tragically passed away in October 2008, used to use the Citigroup chart as an example of what every wave counter was expecting the S&P to do. In some ways it (and the other banks) was a canary in the coal mine (sorry to mention coal, which President-elect Obama doesn't seem to like!), but there was still money to be made in the S&P.

puravida19

Steven 737- For what its worth -
The STU of Thursday, last of this week, written by Peter Kendall, shows the Nasdaq 100 wave 4 ending where you have your wave 3 and Thursday's low being "i" circle, and the close of 1240.93 being wave (a) of an expected a-b-c of "ii" on Friday. His c of "ii" circle of 5 is your (4). He says support is at 1104-1116 then 938.52, the Feb 2003 low.
In the Dow, similar charting, with support down at 7416.6 (wave a low)then at 7197.5, the low of Oct 2002. He places weight on AAII % Bullish sentiment reading as a highly accurate indicator, showing peaks correlate with the beginning of downturns, and CBOE put/calls as another indicator.

David

DG,

From the way you wrote above comments, I am now almost 100% sure that you are from Neely & Co! If I were you or Neely, I would probably do the same PR work for him or yourself...as subscription must be real bad these days.

Since you are from Neely & Co, (or even if you claim you are not) you should have all the Neely's weekly forecast records in file and the best way to prove Neely's accuracy is to lay it out "week by week" for all of us here to see...to prove me wrong in claiming Neely is no better than a broken watch!

I bet you can't!

David

DG,

See your comment above to John as list below here:

"Even if I picked every single bottom and every single top by some method ""I published"", I would bet you a million bucks I would always find someone to take the opposite side of my trade, if only to try to prove me wrong or someone who hadn't """read my book""" or who had read it but not fully understood it."

Do everyone a favor, you are "Neely", right?

Admit it!

Please in the future, identify yourself properly in this forum.

Steven_737

John,

I was referring to methods: i.e. is Elliott Wave a good method? I think it is. In what sense?
One has to study it, understand it and apply it himself.

So I think that Prechter does know his Elliott wave, and he probably was a good analyst back in the 80's. And if you want a trader's education his book is a must, and knowing how waves are counted is more or less indispensable. Try to trade short time frames without placing a framework on price action.

And of course Precther or Neely will sell his method i.e. write a book, produce dvds and give seminars. No tricks, no secrets here. An analysis method that usually works and you have to figure out when it does not.

So that was my surgeon and professor parallel. I am fed up reading comments like: "If this guy knows how to trade, why is he writing a book", or people who sell trading methods being dismissed on the same argument.
They do it to collect money of course. And the book is fine and the trading method may or may not be ok, but if it does not cost much you get to see how other traders put things together to trade.

Subscriptions: good only to learn the ropes by example (those that are not in books), not to trade by them.
I don't know about Neely. I will ask his subscribers to e-mail me old reports to see what he has to offer.

I have been a subscriber of Prechter, for 9 months. I subscribed not only to the Short term update but to the real time forecast for a month.

That was back in Spring of 2005 when Prechter and Hochberg were in the 1-2-1-2 nested wave analysis mode, expecting the big plunge of wave 3 in the abyss (May 2005).

The fellow working the real time update was using Fibonacci levels a lot and during the first two weeks of the subscription I saw that his Fibonacci work was calling all the time for higher levels and his wave counting was giving bullish waves, in total contradiction to Hochberg's analysis in the STU. The fellow was correct in his calls, but they were too short-lived, (could not be used as triggers to the longer perspective of the STU) and he was always trying to camouflage his bullishness as he did not want to contradict Hochberg and Prechter.

Steven_737

Talk about trade paralysis by analysis. I finally gave up the real time update, as I was unable to execute trades. When the 2005 fall rally came I stop subscribing.

The straw that broke the camel's back was a smart-ass comment by the EWI team (perhaps Prechter himself), that if you are not a good trader, they may give you tomorrow's Wall Street Journal and you still will not make money today. That is generally a good advise but coming from analysts that cannot call the market, is an insult.

Yea, sure, you have to be a good trader to buy puts, , when the analyst that supposedly is good tells you that the market will tank.

So I decided to learn trading (I do not mean technical analysis - there is huge difference). Having a better grasp of trading methods, I realized that I needed a filter - to help me decide when to stay out of the market. And Elliot wave fits the bill.

As Yelnick likes the Short Term Update for analysis, I may add that reading the STU and trying to figure out what they are doing wrong is a GREAT EDUCATION, the best way to learn Elliott wave.- provided that you have not lost your shirt on puts. (or calls for that matter). I lost only one sleeve, as I was advised that Prechter was a perma-bear.

the times require a good laughter:
http://bigpicture.typepad.com/comments/2006/03/you_know_you_ar_2.html
check the one before the last.

Finally, I really liked a comment by a fellow on this blog that if Hochberg is for the triangle, we had better look for something else to evolve.
Maybe we should fade Hochberg's calls after all.

Take care John, as I said, I did not mean to upset you.
It seems that our points of view are converging.

Steven_737

DG

What the hell, David, I already told you that I'm just an individual trader with a history of following certain ideas to see if they can be profitable.

"Week by week", again what are you talking about? I already said that of course any forecaster has to have a percentage of losing trades.

For the last time, I have already shown you 5 (five, cinqo, etc., in case you don't understand) instances where Neely made very good forecasts of the S&P macro-direction against one bad call. YOU HAVE YET TO MAKE ONE SPECIFIC REFERENCE TO A SINGLE TRADE HE RECOMMENDED! You talk in vague bullshit terms as if that proved something other than that you're a gasbag. Yet, you keep asking me to prove to you something that you've obviously already decided isn't true.

At this point, my response to you is GFY. Yeah, it stands for exactly what you think it stands for.

David

DG or Neely,

GFY TO YOU TOO!

Your ridiculous outburst simply indicates that you are the broken watch Neely! YOUR WRITINGS ABOVE HAVE EXPOSED YOUR TRUE IDENTITY YOU CANNOT DENY!!! GFY!

For a third party, individual trader coming to this forum to chat would not have reacted in this incredibly RUDE, AND fu----- maniac manner! Go look at the mirror! See how poor your forecast has been.

Go blame the stupid subscribers for not understanding what you wrote in your book or not clever enough to trade opposite to ALL your forecast!

I am really pity you, broken watch neely, FOR spending so much time with different names in this blog to try to fool people to get business! Why not just GFY!

DON'T FORGET:

"IF IT IS A PIG, IT IS STILL A PIG... NO MATTER HOW MUCH LIPSTICKS YOU PUT IT ON YOUR LIPS...OR HOW MANY TIMES YOU CHANGE YOUR NAMES TO DG OR TO DOG!"

GFY...ITs about TIME FOR YOU NOW!


David

FOR EVERYONE'S INFORMATION:

DG =/IS "BROKEN WATCH NEELY"!

SO, WHEN YOU SEE WHAT DG WROTE ABOVE, IT CAME DIRECTLY FROM THE "BROKEN WATCH NEELY". IT IS JUST ANOTHER SNAKE OIL SALES LADY.

DON'T BE FOOLED BY HER IN SELLING YOU HER BROKEN WATCH SERVICE.

"this is a community service message to avoid online fraud and misleading ad."

DG

David,

Yelnick can probably check my internet address and see if I am from the La Jolla area where Neely is living or if, as is the reality, I am from an area far, far away from Neely's headquarters.

I had an outburst because your responses are retarded. Are you really trying to tell me to go look in a mirror to see how poor my forecasts are? What is this? Transylvania, where you can put the "evil eye" on me or something? Get a life, buddy. It's not Neely's fault you can't follow instructions well enough to not blow all your money but some of us are trying to talk about grown-up stuff here so why don't you run along.

DG

David,

One last point. You can't possibly be American. I can tell by the way you write and I'm never wrong about these things. I think what probably happened is you got fooled by the propaganda in your home country about how stupid Americans are and you figured that making money in the stock market would be easy, right? Then, by whatever stroke of luck, you found Neely's service and proceeded to screw up his recommendations and lost all your money, right?. Hey, it happens.

Again, I'm up double digits this month with Neely. Trust me, I'm not interested in your opinion at this point and probably not at any other point, either.

rohrbach

Constructive comments only would be appreciated. Attacks are fruitless.

The ending diagonal would be my preferred count here.My question would be what would the elapsed time allowed for that to play out?

DG

I stayed constructive as long as I could, but David's posts are "out there" and I don't see the value in them since I'm clearly not affiliated with Neely in any way other than as a subscriber. It's just annoying when you try to have a substantive discussion and some nut jumps in the mix.

John

Any of you make a living trading? If so, how long have you been doing it? What are your percentage returns like? Standard deviation?

Do you think Prechter and Neely trade much? How well do you think they've done in their own accounts?

If he needs surgery, a surgeon ought to submit to the very practices he follows and teaches.Do you think Prechter and Neely follow their own advice? They make money by taking it from subscribers.

John


miguel stone crow

Coupla thoughts re: the above

1)Yelnick posits a trader only needs "20" good trades a year. That's a deep thought that opens up a whole discussion on trade managment and amounts invested.

2) Steve 737 - you do some amazing, provocative Eliot work.

3) Say what you will about Eliot Wave analysis, but I think it is the only market analytical theory that could have (and did) forecasted the dramatic drop we've seen since the Summer of this year, which seems so long ago. I personally know a few traders who shorted the Market HARD in late August - all based on their own Eliot analysis (not Prechter's) - told me the Dow was going south of 9k. I know of no other tool, except perhaps the Lindsay Long Count that could have forseen these events.

DAVID

DG/Neely,

If you are not broken watch neely, you would not attack me with a bad mouth of foul words like what you did to yourself: i.e. GFY!

Your above writing has clearly exposed yourself that you cannot deny, no matter how many times you said, "trust me"...you are such a liar, gutless with no decency to admit you are indeed the broken watch neely!

Please reread what you wrote:

See your comment above to John as list below here:

"Even if I picked every single bottom and every single top by some method ""I published"", I would bet you a million bucks I would always find someone to take the opposite side of my trade, if only to try to prove me wrong or someone who hadn't """read my book""" or who had read it but not fully understood it."

Do everyone a favor, you are "Neely", right? Admit it!!!!

I repeat: "If one is a pig, he is always a pig no matter how much lipstick he put on, or no matter how many names he changed or disguised as DG or as DOG!

YOU ARE SUCH A LIAR...TRYING TO FOOL PEOPLE HERE FOR BUSINESS!

GFY!

DAVID

ONLINE FRAUD EXPOSED: DG=NEELY

In another EW website, one disgusted subscriber revealed that he once approached Neely during a seminar and asked him why his forecasts were always wrong? Neely replied: Go F--- Yourself, or GFY!

Now, if you read what DG wrote above, Neely's favourite line, GFY, came up! Just another way to show DG is Neely!

For those like DG who could say something bad like GFY, you can imagine his childhood must be really bad, education sucks, no warmth in the family, possibly abandoned by parents when he was young. When he grows older, he tends to do illegal act to cheat people like what he is doing now.

It is a real pity to see someone pissing this blog here!

DAVID

John,

Both Prechter and Neely do not trade, they just try to make money by selling snakeoil forecast or books.

If they really trade per their own forecast, they would have gone broke years ago!

Prechter put his money where his mouth is and that is "short term treasury bonds", not stock market.

Neely will always blasted that he spent 20000 hours in researching EW and came up with a book that no one including himself understand. Hence, he came up with many new names and theories whenever his forecast sucks, or he came up short in wave counting.

I bet Neely will come up with another new theory very shortly, called " OVERTHROW THEORY" when his current river flow theory hit the dust!

Just imagine, with dozens of staffs and analysts in their office, both prechter and neely's forecasts can be so wrong repetitively, don't you think it tells you something about the EW theory itself and their snake oil forecast service?

DAVID

The following line was written above by DG (Neely):

""Week by week?", again what are you talking about? I already said that of course any forecaster has to have a percentage of losing trades."

Does anyone think the above sentence could be written by a casual blogger or investor, and not by neely himself? See the emotional outburst there in above sentence?

One can lie, lie and lie, but cannot hide forever; eventually, the fox tail will show up...by his own write up!

DAVID

THE MYTH OF 1% TRADING:

Neely advocates trading only 1% of your capital all the time. Okay, let see what happen:

I have $1 million in capital, so I trade $10,000, or 1% each time, leaving aside the rest of $990,000 in Money market earning little interest.

Assume that I am lucky and made a net net 10% trading profit after many disaster/wrong forecasts, 10% of $10,000 = $1,000. This is equivalent to 0.1% return on my 1 million dollar capital! A very good return on capital...do you think???? Even if I made 50% trading profit, or be right 5 times in a month, my return would still be 0.5% of my capital!

It is not much better, if not worse than the short term bond that Prechter bought!

That's why, I mentioned above that this 1% trading by neely is a gimmick trying to fool his naive subscribers!

So when the liar said above that he made a double digit profit last month with Neely, even if it is true, it means a miserable 0.X% return of his capital. Big Deal?

Steven_737


Just to keep a balance in our arsenal of strategies, some fundamental valuation is in order.

A quote from an article in Forbes, by
Nouriel Roubini, a professor at the Stern Business School at New York University and chairman of Roubini Global Economics, is a weekly columnist for Forbes.com.


"--For 2009, the consensus estimates for earnings are delusional: Current consensus estimates are that S&P 500 earnings per share (EPS) will be $90 in 2009, up 15% from 2008. Such estimates are outright silly. If EPS falls--as is most likely--to a level of $60, then with a price-to-earnings (P/E) ratio of 12, the S&P 500 index could fall to 720 (i.e. about 20% below current levels).

If the P/E falls to 10--as is possible in a severe recession--the S&P could be down to 600, or 35% below current levels.

And in a very severe recession, one cannot exclude that EPS could fall as low as $50 in 2009, dragging the S&P 500 index to as low as 500. So, even based on fundamentals and valuations, there are significant downside risks to U.S. equities (20% to 40%)."

link:
http://www.forbes.com/opinions/2008/11/12/recession-global-economy-oped-cx_nr_1113roubini.html


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