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« Dollar Gets to YE$. Fed Gets in a Box | Main | Missed My Dow10K Bet By 6 Weeks »

Wednesday, October 14, 2009


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Interesting stuff, but as "VirginiaJim" notes, this is strictly NUMEROLOGY.
Not a hint of causality.


Yelnick, Perhaps it's worth mentioning that Carolan is one of the few people on this planet whose record makes Prechter look good?

wave watch

Odds are very high this isnt another 1987. Stock Market isnt currently in the Mars-Uranus crash cycle. (Every crash and volatile bear market since 1920 has occurred in the "latter half" of the Mars Uranus cycle.)

If you look at the chart above, we are due for a very short and sharp decisive pullback here then a further run to new highs into 2010 is highly likely.


jwalker - That's pretty funny . . . "Carolan is one of the few people on this planet whose record makes Prechter look good!"

By the way, many of the "perma-bears" that continue to grasp at anything they can (including the '87 Crash) were most likely in diapers during that year . . . and are totally oblivious that the 30-year long bond was offering a most competitive 10% yield for portfolio managers to take advantage of. That is certainly NOT THE CASE today.


All these crash warnings and the stops on my NDX long positions since March have yet to be triggered.

In fact, the only stop that has been triggered was a small "nibble" short position I recently took out on an impulse.

The strategy of not worrying about catching the top has worked out well in not shorting as this thing grinds higher.

Although the smell of a correction coming soon is perceptible, it may well be sideways. I have wave counts and cycles showing this thing could grind higher till end of the year and it's never a good idea to short a dull market anyway.

I guess I'll just keep doing what I've been doing since March —mostly nothing but ocassionaly raising stops on the long positions, taking out a small short position here and there if it makes sense, and berating the ocassional disruptive looney that comes by.

I don't get this :

"Carolan is one of the few people on this planet whose record makes Prechter look good!"


Monday Oct 19th <<<< all fractal wavelets are pointing down on all frequencies ...

Keep getting stopped out, but should be rewarded next week


Oh btw did BP cover his Long on the Dollar ?

Virginia Jim

An egregious error regarding the 1987 "First bottom" date. Here is the second chart in which the error occurs.

I wouldn't exactly elevate this to a crash call. My objective was to improve my abysmal market timing for options purposes and I stumbled on this. The "coincidents" were interesting last month when I first posted this here, on Daneric's site and Slope of Hope. The continued up move from that point, something a perma bear like me would never have predicted, makes it now more interesting. I want a lot of people to see it in the UNLIKELY event that it does occur.


Virginia Jim

Just scanning a couple comments, let me clarify. This model predicts a high October 16 now and it predicted it almost a month ago when I first posted the speculation here. That isn't bearish. You can't have it both ways. You can't call it bearish a month ago when everyone was bearish and it predicted another month of highs and now call it perma bearish.

Second, the model is what it is....pure numerology. Criticize it for lacking any hint of causality as I did, but not that its biased. That's absurd. It is only math for goodness sake. It's not manipulated, rationalized, interpolated. It can't be interpreted, averaged or otherwise biased by slight. You can verify it. It simply is.

And third, it is tentative. On July 11, 2009, when this jumble of number garbage predicted July 11 was a LOW while even CNBC was extolling the H&S Top and a drop to March lows, this speculation predicted a high October 16. But the odds against the model predicting July 11 a low, October 16 a high, November 23 a secondary high....the odds, I'd submit are 1 in infinity. Now that July 11 is PROVEN and October 16, is still in play and very close to proven, the odds are far far better. maybe 'trifecta' level of odds (1 in 500,000) but better than one in infinity...e.g. less worse.

All I can say is if you see yet one more higher high in the next 3 days (the point estimate plus 1 day margin for error of the interval estimate), you might consider where your money is safe. Its just a bunch of numbers. I don't think this thing will work and I didn't design it to do so. All I know is that if I saw a UFO I probably wouldn't tell anyone after the fact; I'd far prefer they be watching with me.

And one last thing. Why disparage the reputations of two fine men, Prechter and Carolan? I don't know a thing about Carolan other than from reading his well written and thoughtful book but I feel very close to Prechter's work. He makes mistakes like anyone else, but he is a certifiable genius IMO. The only rationale for destroying another man's life's work like that is sophomoric penis envy. Just an opinion of the level of those who attack others.

Good luck everyone and best wishes,



Jim - I think that Bob Prechter's track record speaks for itself... it's downright abysmal. I've read the EWT on and off since 1987 and he's been absolutely horrible in his timing. There are so many examples of this that it isn't even worth the time and effort to highlight just how dismal he's been over the years. His latest recommendation to short the market back in early August at roughly 1000 is yet another prime example of how bad he's been. Anyone interested in being 92 handles underwater?
Not me.

Although his socio-economic commentary about public mood and sentiment is fascinating, it is of very little value when it comes to making money as a TRADER in the markets. I would suggest that a TRADER is far better off using a few simple tools of technical analysis ( such as the NYSE Cummulative A/D line ) and a couple of inter-market relationships ( such as the US Dollar and Crude Oil ) to make money.

And make no mistake, all of these "bloggers" like the Kenny's and Daneric's of the world are simply portals for EWI. Lot's of pretty charts, but stubbornly wrong and unable to trade their way out of a paper-bag if their life depended on it!

Virginia Jim

Michael, I think Robert Precter's record is excellent. And I think his contribution to TA dwarfs that of any person in my lifetime. You are welcome for your opinion and I for mine.

The really telling commentary is this; your need for voicing unnecessary off topic defamation is the only thing that speaks for itself and volumes about yourself.



Prechter's record is "downright abysmal" only to daytraders and market timers, who try to use EW to predict daily and hourly movements in the markets, which is impossible, since so many possible counts are in play at any given time. EW can only be applied accurately in hindsight, and is elegant when done so.

Prechter thinks in terms of centuries, so being off in his predictions by a decade or so is still very accurate. I agree with Jim. He is a genius. Daytraders should simply steer clear and try to discover another "foolproof system" to beat the markets. Trusting Prechter's advice and then bashing him when he is wrong on a call is so childish.



I have to agree with Michael.

Prechter's record is excellent only in it's mistiming.

I can't imagine how anyone would think a USEFUL market forecasting company —which EWI is supposed to be, that's what people are paying for— can be isolated from the very essential ingredient of time.

Off by a week maybe a month, OK. Off by 5, 10 or 20 years? Is that really good work? What kind of trader or investor would that benefit?

Maybe Jim and Hag are reincarnations of Methusalah? Is he an aspiring movie producer?

I have no penis envy Jim I have 9 inches of my own and that's plenty. I also read each of EWIs STUs, EWFFs, EWTs, form mid 2000 to very early 2005 and actually tabulated forecasts in those publications for that time period. He was essentialy correct about 1 time in 10. if you go to:

those guys give him a very generous 37% batting average which is still poor.

Where is the off topic defamation? It's as Michael describes and I'm not a day trader. I lived it and tried to make use of his forecasts for several years to big losses early in my career. I've also used EW to good results since then by not following his work.

Market forecasts are only useful if timing is somewhat acurate. If he were to market to the Methusalah crowd —which he doesn't or make it plainly clear on his website —which he also doesn't, I could respect his work more. I suggested this to him many times and he chose to ignore that as well.

Sorry mate.

Virginia Jim

Okay, I give. You guys win the test of will and intelligence. And in surrender, I promise to read your book when it published and appears on the syllabus for post grad TA at Princeton. Just send me an email.



..dunno about a crash, but my current work points to a potential top of Primary B wave around that time ( dec 11th) at about spx 1210 :)))


"Prechter's record is "downright abysmal" only to daytraders and market timers, who try to use EW to predict daily and hourly movements in the markets, which is impossible, since so many possible counts are in play at any given time. EW can only be applied accurately in hindsight, and is elegant when done so."



Virginia Jim:

A little sarcastic dig as you bow out? Well I've seen worse.

It's precisely because Prechter wrote such a simple, easy to read, book that makes his record such a bummer. If he simply practiced what he preached in EWP he could be the ElliottWave messiah instead of it's pariah.

I've never argued his ability to write books and being a successful author but those qualities don't necessarily translate to being a good market timer/forecaster which is where he derives his misplaced adulation.

I bring this up not to put the guy down but to alert newbys as to what he is really all about so they don't make the same mistakes I made by listening to the hype some create about him.


Yeah Chartman I agree and called his people out on this many times a few years back as that was one of their default answers to handle pissed off subscribers.

When You read SHORT-TERM-UPDATES by Steven Hochner you aren't really expecting multi decade trades.

What a shirking of responsibility that is. A total misrepresentation.

EWaves can be used for shorter time frames. I know because I 10x'd my trading portfolio with them in 2008.

Why can't Prechter do this? Maybe Princeton isn't such a good credential to have when it comes to trading. Better to judge people by what they can do instead of their credentials.


Min: Prechter went to Yale, not Princeton.


Thanks jwalker46 I was actually poking fun at Virginia Jim's sarcastic remark:

"And in surrender, I promise to read your book when it published and appears on the syllabus for post grad TA at Princeton. Just send me an email.


I can see the ambiguity in how I wrote that last sentence though.


Virginia Jim:

It is (at best) delusional for you to describe criticism of Prechter and Carolan as "penis envy", or to call Michael's quite accurate summary as "defamation". Yelnick is more tolerant than I ever imagined.

The ability of a person or system (Carolan's, for example) to catch a given turning point precisely may reflect value or just randomness: If you make enough forecasts, or throw out "alternate counts" (i.e. "up or down") or if you forecast "turning points" (direction unspecified), then of course some will look brilliant with hindsight, simply by chance...or obfuscation.

The test of value is accuracy over time, and during the years I read Carolan's newsletter his recommendations were quite unprofitable. Similarly, anyone who followed Prechter's quite specific trade recommendations during the late 1980s and early 1990s would have gone bankrupt several times over. From what Michael posted, that is true recently as well.


Well said JW; I guess "those that can't trade, write" would be a befitting corollary to that famous saying, right?


Agreed 100%.
If I could have $100 for every time Prechter (or Hochberg) switched their primary count to an alternative count, I'd be a very rich man. Anyone remember how Prechter said that crude oil wasn't suppose to go past $70 in 2008? How about his stubbornly horrible primary count back in 1993? I do.

How ironic that "Virginia Jim" speaks to duration that involves decades, while Prechter appears on Bloomberg TV and other media outlets all throughout 2009 marketing his short-term predictions and cadre of subscription services, including Hochberg's STU.

Don't make me laugh "Virginia Jim".
Sounds like someone could use a reality check.


P.S. I've just noticed that yet another delusional follower/blogger of Robert Prechter's and "portal" for EWI . . . DANERIC has once again come to Prechter's defense.

DANERIC states that Prechter and EWI recommended going to a full short position on August 28th when the Dow Jones was roughly 9600.

What DANERIC conveniently ignores in his puppy-dog loyalty to EWI is that Prechter came out with a special report on AUGUST 5th recommending that his subscribers initiate a SHORT-POSITION if they have risk capital. In fact, as I recall Prechter made a big deal out of this monthly report coming out two-weeks early because he wanted to ensure a sense of TIMING to his recommendation!

However, the Dow Jones was not at 9600 on August 5th.
It was at 9280 and the SPX was trading around 1000.

In DANERIC'S defense of Prechter's call, DANERIC goes on to say that such a recommendation was an "investment" ( as opposed to a Trade ) and is only down 4% (as of today) if one had taken his recommendation on August 28th.

I guess DANERIC never got the AUGUST 5th report from EWI.
If he did, he wouldn't be looking like the total FOOL that he is claiming only a 4% loss.
But given his tremendous BIAS to EWI and Prechter, he'd probably do his best to "spin" and twist the facts just the same.

Buyer beware.


Mark Hurlbert says that $100,000 invested/traded off of Prechter's advice since 1985 would have resulted in a 98% loss of one's capital.

How's that for a dose of cold, hard, reality?


Welcome to the EWI bashing thread on yelnick typepad... (LOL)). But actualy and factualy, very deserved and acurate.

You shoulda been there in 2003-early 2005. Bobby and Steve-o gallantly defending their Armageddon scenarios while the markets first taunted them, then humiliated them, then eventualy just tore them a new one.

I got pretty bloodied up in 2003 and the first 9 months of 2004 was nightmarish as well.

Towards then end of 2004 I gave them the one finger salute, unplugged from Prech-World and it's been fun ever since.

You can pretty much conjure up any scenario and be right at some point within the next hundred years.

What makes Prech a genius is how he can make people into believers after being wrong most of the time. I guess it speaks for the sad state of humanity who also choose people like Hitler as their leaders time and time again. I will always be puzzled by the need people have to lick the boots of their opressors.

ain't he?

OCTOBER 19, 2007


Near Term Picture

Despite every chart presented in this issue, there is no guarantee about timing. Any euphoric period that has persisted for nine years can continue to do so. There are various scenarios for this top formation, so stay tuned to The Elliott Wave Financial Forecast and the Short Term Update for current commentary.

On July 17, EWT recommended that aggressive speculators take a fully leveraged short position. That time marked the all-time peak in several indexes, including the Dow Jones Transports (topped 7/18) and secondary averages such as the Value Line Arithmetic index (topped 7/13). Our proxy for this type of recommendation is S&P futures. The December futures contract at that time (close on 7/17 to open on 7/18) was 1570.25-1572.25. The August 26 issue outlined the bearish seasonal period that carries through October 26. EWT made clear on page 1, “This observation does not rule out a new high within this period.” The major averages crawled to a new high in the second week of October. The futures contract made a new intraday high by only 7 points, closed down on that day and has fallen since. Place a stop at 1571.25, which is break-even. If stopped, use the post-October-12 low as a level to re-short.

Like all indicators, seasonal patterns are probabilistic. The ending of this period has no reliably bullish implications, because the evidence of bearish potential given throughout the charts in this issue trumps every small-time bullish portent. In 1973 (34 years ago), the Dow and S&P bottomed on August 22, soared until October 29, and then collapsed in November to below the starting point of the rally. The Fed meets this year on October 31, and investors are breathlessly awaiting the next discount-rate cut, as if it were bullish.

Investors holding interest-bearing cash equivalents have outperformed the S&P for over seven years. Hold onto that cash with both hands.


As the U.S. stock market found a bottom in late-February/early-March of this year, Robert Prechter, seeing the distinct Elliott Wave pattern into the low, issued a call for a major rebound in the February issue of his EWT investment letter and recommended investors cover any shorts established at the top in 2007. “The market is compressed,” he observed. “When it finds a bottom and rallies, it will be sharp and scary for anyone who is short. I would rather be early than late.” “This is an environment of escalating financial chaos,” wrote Prechter. “Our main job is to keep the money we have. If we exit now, we will do that.”


Min - Trust me when I tell you that Prechter's bearish call in 1993 was very similar to his 2003 call. His uncanny ability to lose money on a consistent basis is incredible.

Here's my blog on the analysis by Jim Ross:

It's a little more explanatory.



I believe it. What I experienced from 2000 to 2004 was pretty obsessive. From 2000 to 2002 it served him as it was in alignment with the trend but when the up trend took hold he and Hochner

just kept on plowing on obsessively.

That kind of behavior originates deep from within so I can totally seem him doing that in 1993 as well.

A year ago, a subscriber posted on this blog how his famous October 1987 call actually went down. Turns out he gave his subscribers the "heads up" after the fact and so was useless to them in terms of getting out of harm's way.

Prechter himself recognized in an EWT that I read somtime in 2004(?) that he has been ineffective at reading the markets since 1987.



Thanks for sharing I'm short on time right now but I will read your link later on.

I guess you're saying earlier that Prechter made a good call in February of closing his SPX short?

I agree. I just wish I had the certainty that it wasn't just luck because every time he called a top in 2003, 2004 and I've heard from others in 2005, he was also very certain.

What do you think?


Michael, min - Prechter along with many other ewavers at the time first thought 1987 was the Kondratieff Winter crash. No. It went back to a timing and price prediction in his 1978 book, Elliott Wave Principles. They had it pegged right around the Aug 1987 top in price and time. So they stayed with it too tightly - it was to elegant a story. Prechter's predecessors in ewave after Elliott himself had made really great calls for the '66 top and '74 bottom, so he wanted to, too. 
Then many ewavers, not just Prechter, read 1994 as the top, given a completed five wave move since 1974. What fooled them was while their count did show a complete five waves, none of the waves had extended; usually one wave extends in an impulse. Then we had the great fifth wave extension from 1995-2000. I would criticize Prechter first for letting his ego get in front of his analysis regarding 1987, and second for not figuring out it was an extended fifth wave once it broke north in late '94. 
Now, his third really bad call was Oct 2002, where he was still seeing a debacle down as the market churned at the bottom and turned up. He really didn't adjust to the magnitude until late 2005. 
He has the stubborn strength of his convictions and in all three cases held a bad call too long in the face of contrary evidence. Because of this, Neely has had a much better track record. Glenn is much quicker to admit he is wrong and revise his view. 
Right now Neely is waiting for the wave structure to clarify. Perhaps his premature all about Jun11 has given him pause. Prechter still sees P3 coming, but not sure when the top will be in. I have been watching Tony Caldero closely as of the three he seems to have this market pegged the best, given his adroit double ZZ call. 
Bash them if you wish but I would rather see you take into consideration their weaknesses as well as their strengths and come to a judgment accordingly. Where I feel a real need right now is more of a machine-driven (computer) approach without the ego and discretion of human actors. It too may be wrong - indeed will inevitably be - but at least its limits can be understood consistently. 


Yelnick, thanks for the historical rundown.

My awareness of Prechter started in 2000 and have not seen much strength. The strength of his convictions is not something you can trade off of. I'd rather see an unbiased conviction based on real world developments or something a bit more practical. After all Elliott developed E-Waves as a tool to help understand MARKET behavior.

Your input helps but you know how it is, one has the most reality with what oneself has actually experienced.

To me E-Waves is just another TA tool and if at times it isn't the best tool to get the job done I leave it and go grab something else.

Many Ellioticians use E-Waves too much like a divining rod or an oracle. Prechter himself has written that he is able to see an e-wave pattern in everything.

To me if the result is unpredictable it may be evidence to the contrary.

That being said I am willing to take an unbiased look. The good call in Feb 09 is a start but only a start.

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