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Friday, October 16, 2009


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"This should be clarified Monday. Enjoy the weekend! "

At this point we are in uncharted territory. People are using every method in the book to predict this market, but right now the market is telling those prognosticators to FOAD. The trend is continuing to go up on anemic, pathetic, boring volume. This is not investing it’s casino gambling. Yeah sure I’m not an expert, but even the experts have been wrong so far so there! My hypothesis is… soon we roll over and crash. … Pay close attention to the retroactive traders on the real time trading sites that are always on the correct side of the trade… They will let you know what they did after it’s profitable, do the opposite of what they do.

wave watch

Latest from Terry

Update for Wednesday evening Oct 14; Todays strong gain meets nearly all the peak requirements for the ABCD T construction on a closing basis. The date is within range and the market is at token new highs above the Mystery T's mid September peak. The closing S&P is just shy of the upper envelop target level of 1106 but that might be reached tomorrow. The very short term T on Sunday can have its center date more later by one day so it is possible we have seen the momentum peak today and the upside strength will rapidly dissipate.

wave watch

Terry has had the hottest hand lately in the blogosphere...

Oct 8 note: I am changing my outlook back to the original forecast of an important peak and selling point on Oct 12 13 14 as below. The performance on Thursday was negative in my view as we are losing momentum and the volume oscillator is probably topping at the zero line. Details on next Sunday's regular Update.

Oct 5 after close note: The mid Oct peak(D) is being estimated as Oct 12, 13, or 14th. It is positive that the Arms selling climax and Wrong Ts bottom date has halted the slide to the 55 Day MA. Should be headed up from here.

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when you say "In scanning the many ewave sites I thought this chart from Kenny was most instructive. "

the only instruction i got was this has to be one of the most incorrect wave counts available from whoever.
one doesnot have to belong to any style of wave counting ( like mine is neely) to really understand that there has to an iota of logic in wave counting.
a lot of ewavers have made wave counting as an art, label whatever you are inspired to, on whichever time frame to express what you feel.
i was hoping that there is a little science and method to it as well.


I believe I have seen a wave count similar to what you propose, Yelnick. Neither Kenny or Daneric's wave count makes sense to me in that their pink (i) and pink (ii) is so early in the rally. However, I am not sure that I can count 5 waves up to Kenny's black i at 1059.62. At any rate, assuming that is a valid wave count, as you suggest there is more latitude for a valid pullback below Tony's pink (i) of 1079.47 which could be violated in this wave 4 pullback.


Apparently Daneric is going to come up with some alternate wave counts this weekend.


Another concern from an EW wave count perspective is the labelling of the waves off the July Int. B low of 869.32. I believe many have denoted the end of the 1st wave as being 1039.47. Given the pullback from 1080.15, the wave 3 top, to 1019.95 the wave 4 bottom, there would have been overlap.

After this occurred, Daneric relabelled wave 1 to 1018.00 and had an orthodox wave 2 labelling of 991.97, rather than 978.51. In so doing, there was no overlap between waves 1 and 4.

Does this work for you, Yelnick?


Rob, it works barely in the S&P but fails in the Dow, which did overlap. Some ewavers counted it as an ED (since that allows overlap between 1 and 4 - indeed requires it) but they failed for several reasons, including an ED is a 33333 patterns and we have had some 5s. The rise from Sp992 to Sp1080 looks impulsive and counts as a 5, for example. I think Tony Caldero's double zigzag is much sounder. Interesting question is where to put the X wave, since it could go in two spots: from Aug23 to Sep2 or thereabouts (my choice) or the more recent drop from Sp1080 to Sp1019, where Daneric puts his wave 4. You can criticize my third count in that the spike up off Oct2 has a very short 4th wave near the end of the huge spike up, but it does drop rather than go horizontal, and I think even under Neely's more strict rules would satisfy as a wave not a continuation.


Vipul, fair enough. Why don't you share your count?

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yelnick ,
i have mailed you the wavecount.

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Relatively speaking, the US Dollar wave count is pretty clear, at least when it comes to USD/ERU and USD/CAD pairs. There needs to be one more (small degree) fifth wave down for USD to complete all the outstanding waves so far.

I think that is why Robert Prechter is still not releasing his monthly Elliott Wave Theorist for this month yet. This USD bottom may occur one or two weeks from now.

That is where the next stock market top will probably occur.


Here's someone using EW that says the USD is going down much more. If that is so, dow is going up. What do you guys think?


Sumitomo Mitsui's strategist Daisuke Uno apparently correctly predicted that the dollar would fall below 100 yen post-Lehman.

Now he's predicted that the greenback will almost halve to 50 Yen next year from near 90 today. What's his logic?

Bloomberg: The greenback is heading for the trough of a super-cycle that started in August 1971, Uno said, referring to the Elliot Wave theory, which holds that market swings follow a predictable five-stage pattern of three steps forward, two steps back.

The dollar is now at wave five of the 40-year cycle, Uno said. It dropped to 92 yen during wave one that ended in March 1973. The dollar will target 50 yen during the current wave, based on multiplying 92 with 0.764, a number in the Fibonacci sequence, and subtracting from the 123.17 yen level seen in the second quarter of 2007, according to Uno.


I show the major trend in the U.S. major indexes can top anytime from now to Feb 2010.

I can definitely see Dow going higher but dollar not necessarily that much lower if at all.

I don't have a bullet-proof E-Wave count to substantiate this at the moment but it doesn't invalidate the possibility. Elliott is a great tool but not necessarily the best tool at every point in time.

I think dollar at 50 is still at least 2 years away.


Technicals aside, there doesn't seem to be any fundamentals that will cause a top/crash, at least in the near term. Increasing unemployment, foreclosures, tightening credit - I don't think these can cause people to sell. More like the market and the economy slog through, while the Fed keeps interest rates low and continues to depreciate the dollar.


Kenny and Daneric have changed their counts more times than Charro changes her clothes . . . Following these Elliott Wave bloggers and their "interpretation" and understanding of EW principles is a complete waste of time. If anything, they can be used as a pretty solid CONTRARY indicator!


Bernanke Article in Bloomberg:

Bernanke says fed will begin increasing interest rates. This would strengthen dollar and may be a catalyst for a top in markets. We'll see how market reacts.

See Jing NDX may just gap down Monday and your DJ30 count may still be viable. let's see what happens.


min, the article from last week had bernanke say 'at some point' the fed would raise rates - duh. is there any newer quote which gives more prompt timing?

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Thanks for the update. The Bernanke quote was pretty well read by now, so probably already discounted by the markets.

Yes charting market waves in real-time is a pretty interesting exercise. It brings a sense of anticipation for each new day. Or each new weekday. :)

Yes, my DJ30 count could be wrong and the market can still dive. For example, in an ABC correction, even if A is not impulsive, C can still be. :)




My bad. I re-read the article and It read a bit diferently after a full night's rest.

I still have a gut feeling about this that keeps gnawing at me that has made me a nervous bull.

We'll have to see what happens. I'm tightening my stops a bit more just in case at any rate. With dollar bulls at 3%(?) some kind of surprise out of left field wouldn't surprise me.


Sorry Jing;

I read the article on Saturday and it was dated Oct. 19, 2009. I didn't realize it had been out that long. I've been on the road and lost track of time I guess.

Looks like more upside on Tuesday also? I must say I am now a nervous bull.

In November my NDX long positions will be a Fibonacci 8 months old, probably not a bad time to exit if not stopped out by then.

Good luck to you.

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