search elliott

  • Google

Enter your email address:

Delivered by FeedBurner


  • Where From?
    free counters
Related Posts with Thumbnails

« Watch the Dollar | Main | YE$, The Dollar Gets Interest-ing »

Monday, May 15, 2006


Feed You can follow this conversation by subscribing to the comment feed for this post.


Wow... all indices are going to new highs soon. Tony, I wish my balls were as big as yours!!!


I find myself pondering that the stock market is like the early 1980's. Everyone scared about oil, nukes, Iran, gold. And we all know what happened after that. Could it just be a "wall of worry" that we're climbing? And is it relevant that stocks didn't trade at single-digit P/Es in 2002?

I dunno guys, but this is one helluva weird market.


In deflationary bear markets, P/Es rise. Prices follow earnings down. Single digit P/E avg might be decades or centuries away.


The market is like the early 80s? When hardly anybody owned stock? Single digit PEs? Stock market going nowhere for 16 years? Does that sound like today? Folks were still up to their eyeballs in stocks in 2002, particularly mutual funds. Maybe that's why the PEs never went down.

J Lee

hey some people call it "spooky action at a distance," but it's all relative I guess (or is it ?) :)

so when do all us monkeys start hoarding and then the elitist take back with force ?

are we still in act 2 of this shakespearean tragedy? good thing no one reads shakespeare and reads elliott waves instead. Smart guy you know. Makes a lot of money peddling newsletters I hear for the magic show. Soon to be in high definition.

J Lee

Oh yah, I almost forgot.

This may keep you directionless monkeys for a little bit. Then you can return back to your flickering screen of digits and fibonacci fan lines.

Don't forget to convert to a basket of currencies and hoard ok? Good thing to teach your kids. How to flip commercial real estate and stocks and fill my belly. Use the right side of your brain just as much as you guys use your right hand. And I will guess the market will respond (maybe). Who knows? I sure don't. Oh well maybe it will come in a secret message one day on ESPN after Tiger's birdie on the 13th.


What really gets me about Elliott wave is this idea.

The Russell 2000 has been making fresh new all-time highs, but the Dow hasn't, and the S&P hasn't, and the Nasdaq hasn't. If you look at the patterns traced out by each of these indices, they have a lot in common, in terms of when the turning points occur, and the shape traced out between highs and lows. So you could say they're all approximately the same thing.

Since the Russell has been making new all time highs, EW people count the whole up move as an impulse. And with all the indices (Dow, SPX, Nazz) that *haven't* made fresh all-time highs, the similar-looking wave-forms are counted as a *corrective* pattern.

But here's the rub: if the Dow makes a fresh all-time high, all of a sudden the move from 2002 will probably have to be counted as a five-wave impulse.

So, PRICE is the most important thing. And yet so many EW'ers judge the function of a wave from its "look"! Or from almost religiously-held idea about the biggest bear market of all time, that is at best just an idea worth keeping somewhere in yousr mind, or at worst an idea about mean reversion that forces one into a particular EW view.

Therefore I just don't put much into this idea of "corrective look". It provides completely arbitrary conclusions and yet some people cite it as gospel! I've seen corrective-looking impulses and impulsive-looking corrections, which can take you off the pitch in a stretcher if you get sucked in by this bogus approach.

People, recall that Elliott is all about being "smarter than the crowd", but if you get attached to a corrective count and then change to an impulsive count only AFTER a fresh high has been reached, doesn't that mean that EW makes you *dumber* than the crowd?? It means that you only change your mind in wave 5 - at the last point in the move. Man, why don't people talk about this more???


>>But here's the rub: if the Dow makes a fresh all-time high, all of a sudden the move from 2002 will probably have to be counted as a five-wave impulse<<

LOL! Probably. But even with a new high that advance may still turn out to be corrective - like in a "B" of an Expanded Flat.

No trading method that can be easily learned by reading a $25 book can possibly make one far "smarter then the crowd". Most of the time one can see several possible "legitimate" interpretations for the price action. Developing the ability to pick the "correct" scenarios takes both sides of the brain - the left AND the right -- plus experience.... ;)

Once upon a time there are "easy" calls... For example, an Ending Diagonal in a "C" position, stretching out in the last little "c" while accompanied by an extreme in sentiment... I'll take that any time. Come to think of it, maybe it's best to trade ONLY such "easy" ones.... ;)

The comments to this entry are closed.