search elliott

  • Google

Enter your email address:

Delivered by FeedBurner


  • Where From?
    free counters
Related Posts with Thumbnails

« Bernanke's Operation Twist II Has Failed | Main | A Longer Pause Before the Final Surge »

Saturday, June 13, 2009


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


EWT thanks for this thorough analysis. Indeed great analysis. I would like to bring in some scenario that's been coming to my mind so often lately and it is derived from Neely's discoveries but I don't think he would agree on it because I don't think he counts the rally from 1982 to 2000 as impulsive.

Below is my scenario:

If we go with the assumption that the rally from 1982 - 2000 is an extended wave 5 of some degree and I am not concerned what degree it is as I am more concerned with the structure relativity. If this wave 5 is ending some impulse of higher order (as Prechter suggests) that means wave 5 will have to be retraced more than 68% (Neely's rules) and the S&P will have to drop below the 666 level which is close to the 68%. Now some possible pattern (From Neely's discoveries) that would accomplish that is the elongated flat where the C wave (2007-Now) will be a fib extension of the A (2000-2002). This will bring the S&P close to 275 as final target.

Based on Neely's discovery, this C wave will be the A wave of a higher order contracting triangle that will develop in the coming years.

If we use the MA(50) weekly as the linear regression for price behavior in this C wave of the elongated flat, it is sitting at 971 S&P right now. It is very close right now. Someone on this site on another thread mentioned that another 6 days and it will be 89 weeks since the top in 2007. this is becoming very interesting from price and time perspective to end this upleg. I hope my analysis make any sense here for the gurus...

john walker

Outstanding summary, Yelnick; thank you !

Hank Wernicki

Excellent Analysis



I think that Neely would warn against having an Elongated Flat with a B-wave that exceeds the top of the A-wave, as it did with the S&P making a new all-time high in 2007.

vipul garg

thats a lot of heavy analysis given here.

if i could only understand whats happening from october lows of 2008, or even march lows of 2009, i ll be really happy.

barood, in any case , two things:
one as DG says you cannot have an elogated flat wehere B wave exceeds A wave s high ..
secondly the current C wave going on is a corrective structure , so cannot be a part of flat of whatsoever type .

so what neely is saying is that this C wave is corrective , is a C leg of a neutral triangle , and is still half done .
and thats the only way his short term and long term forecast will make sense as somebody had pointed out that it cannot drop below 450 levels on sp500 .


I take it that the significance of the 89 week figure is that it is a Fibonacci number. Given all the statutory holidays in that time frame, I question how much faith could be put on it. Fibonacci trading days might be a more meaningful number.


Great detailed post, yelnick. You obviously have thought long and hard about that for some time, not just since I asked the question. Thank you. And I will re-read when I don't have a headache. DOW 4000-ish, where it went parabolic seems necessary, eventually. But let me point out that the Nikkei revisited its equivalent point in 2003 or before then rallied, and yet continued in 2008 to progress toward where Prechter says all manias end: Below where they started. All that inflation...but if it really got going in reverse with the deflationary process...Actually, Prechter covered that issue too, one or two Theorists prior.

Forkoholic Serge | Elliott Wave Forkology

Dear Forkoholics & Friends!

Long awaited June issue of Elliott Wave Forkology Newsletter is out!
And more exciting news! EWF Newsletter is now on Scribd! (see below)

June issue is thick, with whopping 11 pages of invaluable EWF research of market trends, pitchforks and fractals. The actual number of pages is 21 ( a Fibonacci number! ), but we needed to add some BS as paperweight ;-) So what so exciting about this issue? We finally found the fractal which may confirm Bob Prechter's Dow 400 prediction! How's that for a headline?

You can preview current issue at
Please also make sure you spam all your friends who invest/trade, with this preview link, so they can see what Elliott Wave Forkology all about. More Forkoholics, better!

In June issue:
Quick Guide to Elliott Wave Forkology
Success of EWF’s Forecast
$SPX projection update into Autumn 2009
NASDAQ $COMPAQ one more time?
Gold: Two conflicting views
Echo Fractal may confirm Prechter’s Dow 400 target
Create Your Own Indicator
Slicing & Dicing $NYMO 5 ways
Random Fractals: Goldman Sachs, 30 year T-bond
Random Fractals: SHOCKING! Apple at $7 again?
1987 crash: Fractal & Fork Review
Forkoholics 1000 Club

Exciting new development! Now you can buy and download our newsletter directly from Scribd! So no more waiting for e-mail delivery if you're in a rush. It's a little over our regular rate as Scribd charges additional fees. So convinience or frugality? you decide!

June Individual issue on Scribd:

June Institutional Investor issue on Scribd:

Size does matter. June issue is about 6Mb Adobe PDF format so make sure you have enough juice in your mailbox. Full size charts are also available as an extra 3Mb file, see instructions at the end of the newsletter.

Thanks, and good luck with your trading!

- Forkoholic Serge -


Perhaps someone could weigh in on the current wave count. A couple of months ago there was disagreementn in the EW community as to whether we were in wave 4 of [1] or if wave 5 of [1] had concluded and we were now in wave [2]. Did this disagreement go away and the wave 4 camp throw in the towel. I am under the impression that the A up move of wave 2 of [2] is about to conclude and we should have a B down move, followed by a C up move to conclude wave [2].

Feedback please.


Great Analysis, Yelnick.

You are well above Nearly and Prechter in my opinion in terms of doing a thoughtful analysis of market trends....and best of all, you don't charge people like those salesmen for their flip flop analysis.

Well done.


Wow. Outstanding analysis Y-Man. I am going to print it out - it's a keeper.


I have reason to believe that the people looking for a simple a-b-c wave 2 (or a combination that looks the same) and an end to it in a few months are wrong (including Prechter). I think the wave 4 people are pseudo-right because we will make a new low, or at least challenge it, and the decline will be wave B of a flat. I think we ended wave 5 of [1] and have been in the A-wave rally of a flat. Bulls think we've bottomed for good. Most bears think we're headed higher for now "after a pullback". This psychology seems to allow for more pullback than most are expecting. I have another reason too that I will guard for now. But that's my two cents, Rob.

This is the what I see best long term wave count out there Russo.

Forkoholic Serge | Elliott Wave Forkology

Rob, still in Wave 4 camp as we did not exceed EWforkology guidelines for W4
and I like Yves count too


Rob, the wave 4 is still alive, just lower probability. Some difference as to whether it started on Nov21 or Mar6. The Nov21 date lends itself to a really good flat with a B wave lower than the start.


Upstart, your wish may come true IF we turn out to be in a triangle from 2000-2014 rather than a flat with an X wave to a second corrective structure. The period from now to a high sometime in summer 2010 will look like a long trading range - essentially from Nov21 (the end of the big move down) to the beginning of the next move down. Curiously, the "wave 4" concept matches with this, but in a different way than a wave 4: if a triangle, leg C needs to break as a "3" not a "5". It has already had its first three waves down, to Nov 21. What we may be in is an X wave which is breaking as a flat from Nov21, and sometime this summer we will enter the second ABC of leg C.

The 'tell' between the two counts is whether we break the Mar6 lows at the next retest.


usdollar, Joe Russo's long count is intriguing. Prechter has mused that maybe the run from 1784 to 1929 was wave I, not waves I II and III. Russo's count is a bit different in that he has wave I to 1837 and II to 1857, then begins wave III; but he doesn't end wave III in 1929. Instead, we are still in it.

Both have the same underlying logic which is that the whole run from 1784 to 1914 feels like a singular period - the rise of European Civilization due to the Industrial Revolution. Then comes WWI and it all falls apart. What I like about Russo's thinking is he ends the 1857-1929 period in 1916, right smack dab amidst WWI and the self-destruction of European Civilization. Also, he expects the Information Age (which we are in) to run much farther to future glory, which feels right, vs. Prechter's uber pessimism that the whole run of Industrial Civilization is beginning a 100 year correction.


DG & Vipul,

thanks for pointing out the fact an Elongated flat should not be considered when B makes a new high. I really did not know that. is this mentioned anywhere in MEW? I don't think I can miss a fact like this. thx barood.



That is not a part of the NeoWave rules, but it is implied that an Elongated Flat with a strong B-wave should be considered very rare by the statement that Irregular Flats should be considered "abnormal and infrequent" on MEW page 10-5. The state of "self contradiction" for an Irregular Flat would be even more severe for an Elongated Flat with a strong B-wave.

I also think vipul is correct that the C-wave of that formation is not Impulsive.

vipul garg

its in behaviour logic .at this degree an elongated flat where b exceeds a 's high will be totally circumspect.
even if one does consider , c has to be impulsive which in this case , is not.

Mista B

It was a Wave 5, imo. Here's my reasoning.

Tech clearly bubbled in 2000, and to astronomical levels. While most of the other major sectors (transports, healthcare, consumer goods, etc.) all had very good runs in the 1990s, tech went up the most by far, thus having a huge impact on the S&P 500. If you look at every other major sector outside of tech, especially energy and basic materials, they ALL went to significantly higher highs. So did foreign developed markets. So did emerging markets (much, much higher highs).

It was a classic blowoff top to higher highs around the world. I think it's a mistake to look just at the S&P, which was heavily weighed upon by tech. The NYSE Composite also reached clearly higher highs. Thus if one focuses ONLY on the Nasdaq and S&P could one conclude that higher highs were not reached and that 2002-2007 consisted of a B wave. Psychologically, though, that doesn't hold water to me. People were euphoric. That's fifth wave pschology. Now we're seen classic B-wave psychology: pure unadulterated HOPE.

Imo, we're in the typical B-wave bounceback rally similar to the one in 1930 that followed the great crash. It should top right about now if I'm correct. We may get a five-year type of rally like 1932-1937 if we go down low enough, but I have my doubts. I just don't think we'll see that level of liquidation (90% loss in S&P). If we don't, then I think the most likely scenario is a very, very long trading range like the Nikkei is still in.

Thor's Hammer

Hope you bought some calls today, folks. This was a wonderful gift and shame on you if you didn't put it to good use. Back to the ol' upswing.

Thor's Hammer

hate to say I told you so...


and now that I have a little credibility, let me say that the next rise will be STEEP and RELENTLESS. You will see the Dow up hundreds of points a day for days on end.

Will there be unicorns? I love unicorns!

and now that I have a little credibility, let me say that the next rise will be STEEP and RELENTLESS. You will see the Dow up hundreds of points a day for days on end.

Posted by: Thor's Hammer | Monday, June 15, 2009 at 12:41 PM

All you do is show up and say "the market will go up" with no reasoning behind it other than you're saying so. How do you translate that into "credibility"? That's just a guy with an opinion using the internet to spread it.

Mamma Boom Boom

Another day like today, will pretty much tip my 'in-dick-ators'.

Thor's Hammer


I called the bottom when the Dow was down 220. That adds to my reputation.

When DJIA are up 250 tomorrow, that will boost my reputation more.

When we are at Dow 15,000 in December you will beg me my method!

Will there be unicorns? I love unicorns!

First off, you didn't say, "this is the bottom", you made some generic statement about buying calls.

Secondly, 33 points of short-covering at the end of the day, over the span of over an hour of trading, hardly qualifies as any sort of reversal on anything but the most short-term chart.

I applaud you for putting yourself on the line and making a specific forecast for tomorrow, though.


Yes, DOW up tomorrow, on its way to next week's multi-month top.


I don't know about you bulls getting all bulled up for some new monthly highs tomorrow but today's weak close was a daily sell signal on my simple as a moron dressed up like an idiot for Halloween model.


Hey EN!!

email me at [email protected]

As a student of Neely River Theory, id like to talk to you about your experience with it.

Hank Wernicki

Went Long at the close for the $COMPQ with a tight Stop for tomorrow

Thor's Hammer

You won't get stopped out, Hank. We are going up. Relentlessly. Bears will be basted, baked, and boiled.



The rally in the DOW from March has looked corrective in structure, but been a bit puzzling to me as to the best count. The rally up to early April where the triangle began doesn't count as a five like in a zigzag. No, instead, the straight shot up to late March was A (and can count more convincingly as a 5), the "big" pullback there was B, and everything from late March has been an ending diagonal. Wave 1 ended early May, 2 was the flat in May, 3 ended the other day at 8877.93, a simple zigzag 4 ended today or will tomorrow (note it overlaps 1). The corrections exhibit alternation. Wave 5 should end next week "on schedule" in week 89 from the all-time high. This count even correlates better with the diagonal I mentioned in the XAU. Being corrective, the rally has not been wave C of a 4th wave flat. 5 waves down ended in March, as EWI labels it. Thus, being corrective, the rally has been A of a flat wave 2. Wave B down will retest or exceed the low, and C will scream upward, maybe into early 2010. That's why I disagree with EWI's timing for the end of wave 2.

I agree with Prechter that the clearest waves are usually in the DOW. Think about this huge example: Early 2004 to late 2005 was a mammoth triangle, only in the DOW. The S&P was a mess to attempt to count.

Yelnick, has the STU mentioned a couple of turning patterns ending next week, both involving several hundred days? If not, I may share it if it continues up into next week.


Come on boyz. Even a tiny infant can see that we started a new daily downtrend today.

If this thing can rally hard tomorrow, I will eat my words . . . and you bulls will earn my money but it won't . . .

anon_aka_TERA BAAP

THOR is exactly correct..tomorrow will be a bear Slaughter..i almost cannot handle watching..i warned you bears, this market is going much much higher!!

today they couldnt even close it on the lows..i am adding to calls BIG time..WFC, GS, XOM, SPY

Today's move was a fakeout because during the TRIPLE witching, they need to close out their short hedges so they bring it down..and lure more shorts inside!!

After a THREE HUNDRED point move higher, they will reset their positions on the way to ALL-TIME highs

with VERY FEW on board!!

Reality Check

For those crowing about "not closing on the lows", today's last hour move in the SPX was only about 60% as strong as the other positive last hour moves over the past two and a half months and that was after a much larger intraday drop than we've had on most of those positive days. The idea that some sort of solid bottom was put in this afternoon is definitely premature.


Wavespeak counts this decline as the fourth wave within C of 4 down from the high in 07, anticipating a relatively shallow pullback over the next couple of weeks before a final push higher in 5 of 4.


DG & Vipul,

Your answers are so much appreciated. thanks a lot.

Thor's Hammer

I am not Thor. I'm his Hammer.

And I told you so.

The comments to this entry are closed.