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« The Pause Has Refreshed - Now the Final Surge | Main | A Look at the Longer-Term Wave Structure »

Friday, June 12, 2009


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Maybe the Fed knows that we are in a deflationary environment? Thus, purchasing bonds will result in a profit (assuming that the issuer does not default). The QE was used to change the market psychology. From the March lows, the rise in the markets have allowed the big bank holding companies the opportunity to recapitalize.

Thus, in this case it was "Mission Accomplished".

Mamma Boom Boom

This is the way I have described it on my site:

LONG TERM: - Sell - Yield spreads reached a record high this week. Nobody wants to own the long end. Can you blame them? The government has now become the enemy of debt securities. It seems impossible that, collectively, we have elected 536 'children' to manage our affairs. But, that's what has happened.

I. Sosceles

It's interesting to see how many bankers and politicians are still gaming the system. We are NOT capable any longer of controlling the rot.

Mamma Boom Boom


You made the statement "there is no evidence that the move from the March lows in an impulse, so since it is corrective, the majority of it will have to be retraced."

How can a so-called accomplished neo-waver make a statement like that?

I await your defense, on pins and needles.

You friend



I simply followed the NeoWave rules on Impluse wave construction and deduced that the move has been corrective. Even if one doesn't have the patience to wade through the text of the rules in Chapter 3 of MEW, one can look at the diagrams in Chapter 5 and see that the move up from March doesn't fit any of the Impulsive structures. Has the rally been substantial? Sure, there is no denying that, but that is a different issue from the Impulsive/Corrective issue.

Since the move is not the A-wave of a Zigzag formation (otherwise it would take on the form of an Impulse), it can, at best, be the A-wave of another type of Corrective pattern. Since all other Corrective patterns aside from a Zigzag typically retrace at least 61.8% of the initial move, I say that the "majority" of the move will be retraced.

Now, that's if I were under the impression that the move from the March lows was in fact the initial leg of an Elliott Wave pattern, which I am not, since the pattern playing out, in NeoWave terms, is much more bearish than even that.

Mamma Boom Boom

>>Has the rally been substantial? Sure, there is no denying that, but that is a different issue from the Impulsive/Corrective issue.<<

That's not what I question. I agree that it most certainly is corrective. The same analysis is on my website. And since you have decided to be civil, I'll tell you what I do question.

Isn't it true in N.W. as well as in E.W. that if a move is corrective then the prinary trend is the other direction. That being said, the move in question would have to 'more' than be retraced.



In the context of my statement, I was responding to a question about the possibility that the pattern Neely thinks is in effect might be the wrong pattern. I was saying that even if Neely's current wave count (which does imply that the move since March will be more than retraced), is incorrect, the corrective nature of the move up since March AT LEAST implies a significant amount of it will be retraced, even if the entirety of it isn't.

Mamma Boom Boom

Makes no sense...........


What doesn't make sense about it? Someone asked me "What pattern might be in play if Neely is wrong?" I said, "I'm not exactly sure, but since the move from the March low is corrective, the majority of it will be retraced".

For example, if the move from March was the A-wave of a Flat ending a Complex Correction that began last October, in which the move down from January to March was the X-wave, the current move up would be Corrective, but not necessarily be completely retraced, but it would be retraced at least 61.8% (hence the word "majority" in my initial response). That retracement would then be followed by a C-wave up to approximately where we are now or a bit higher. That C-wave would then be completely retraced once the primary trend took over.

If the move from March was a Triangle, a similar scenario would play out in the initial retracement level, since the B-wave of a Triangle typically retraces more than 61.8% of the A-wave.

anon_aka_TERA BAAP

it is IMPOSSIBLE for this market to make a meaningful move lower!!!

any dip, ANY RED whatsoever will be bought!

be LONG, or be WRONG!

man, i am loaded to the GILLS with calls on GS, XOM, and SPY!!

i usually sell my calls at Friday's close to blow some free cash on the weekend..but next week is gonna be HUGE UP!!

i wonder what LIQUIDTY INDEX is saying?


Mike McQuaid

NDX is making a fractal formation subsequent to May 26 that mirrors in miniature the impulsive running correction thats imbedded in the action from March 9 to May 26. The April 2 gap is the "big brother" to the gap on June 1, both occupying the early action of the B wave of their respective running corrections. I used both daily and 60 minute charts to observe this action.
So the primary degree 2 wave label is May 26.
If this scenario continues, the summer should hold out a rally that goes like gangbusters.


This gangbusters rally is about to enter it's steepest upward part, a parabolic rise that should last 3-5 years minimum and carry the DJIA to 22,000.

Mr. Elliott

This gangbusters rally is about to enter it's steepest upward part, a parabolic rise that should last 3-5 years minimum and carry the DJIA to 22,000.

Posted by: cole | Friday, June 12, 2009 at 07:59 PM

This rally has been going for 3 months. Even if I assume that somewhere in all that overlapping grind up from the beginning of April, there was a wave 2, I'm now supposed to believe that wave 3 will last 12 to 20 times as long as wave 1, at a minimum? The "with the trend" waves of an impulse formation are more likely to take approximately the same time, although the extended wave has a faster velocity, enabling it to cover more ground than the other two "with the trend" waves.

Forkoholic Serge | Elliott Wave Forkology

FSN with Steven Hochberg

a lot of "Not quite sure" and "maybe" "could see" "not 100% sure" "usually" :)


My method is a combination of 1. fundamentals and 2. fading consensus on this and four other "Elliott" websites. It's nothing against the people here because you're bright and hardworking but there is just something eerily (errily?) wrong about the predictions. Whoever has said Prechter --to take another example-- offers bad advice has undoubtedly never tried fading it. Prechter has been an extaordinarily reliable moneymaker for me.


That was one of the better Theorists. Psychology toward inflation seems to be another example of the majority looking in exactly the wrong direction right at the turn.

I would be interested in the opinion of you wise people as to whether the bear market began in 2000 or 2007. I think it has implications for how long this wave 2 can last.

Heads up: If the market holds up as little as 6 more trading days, we'll be in week #89 from the top.


Yelnick, I know you've said somewhere, but I can't remember your take on whether 2002-2007 was a b-wave or wave 5. Could you share that? Thanks.



Upstart, let me answer that question in a high level post.


That would be great, yelnick.

I guess I feel like the rally up to 2007 had the ultra-phoniness of a b-wave when you consider the economic fundamentals, and the rally up to 2000 attended a stronger economy and seemed to be where the general public was extremely engaged in stocks, CNBC (or whatever it was called then) was really booming, etc. - that seemed like a fifth to me.

vipul garg

with T notes indicating 'flight to safety' soon, gold consolidating before a surge for 'safe heaven' , .. equity markets have little or no time ..
it will be a slow and steady fall accelerating only when eurodollar reverses.
so next leg of severe weakness should come from eurozone.

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