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« Dollar Dump, Stock Pump is Back!! | Main | Vampire Market: All the Action is at Night »

Monday, January 11, 2010

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Bird

Yelnick,

Now that you've put me on record, I want to clarify a couple things about the chart you posted. First, I'm not sure whether Gann would have predicted a turn based on this set up. All that is similar is that there is a squaring of price and time, which he certainly preached. 2nd, this particular structure marries the squaring of price and time with the fibonacci ratio. Gann didn't do this. 3rd, while I'm expecting it, the thesis is not that price or time or both WILL be hit imminently. It is this: because there was a squaring at the Wave-b low in July, the structure MUST "square out" or the up-move is not yet over. So IF the very close price or time (or both) levels do not result in a turning point, then the move must continue to the next price or time junctures at the next level out. Also, a top may form and could be THE top, but to be conservative this just means the structure is complete, allowing a move south; it doesn't necessarily predict that further "irregular" highs cannot occur. The point is that the approach is best traded from Wave-b up, but not necessarily from the top down.

Sanjay

Thanks Yelnick for including Gann. I'm told the MM's want a Jan close of at least 1200 so we must keep that in mind.

JT

Not sure that people are using the VIX in the proper way. Implied volatilities are in fact down.

Kevin Martin

I'm with the crowd that holds 4 and 5 yet to come.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3568637

Good work on this site! One of my new favorites, since wags pointed me at it.

Kevin

Wags

Kevin,

You are welcome.
Hope all is going well with you.

Michael

Just hit the 10 day MA on the SPY at 12:33PM Eastern. Should see a decent "bounce" from here, with lots of short-covering in the coal and energy names.

Milen

Some Golden Ratio evidence
http://oneelliottwavetrader.blogspot.com/

Aramis

well, how about the inverted HS that we saw ? Doesn't it look like it might have ran its course with the depth of head to neck being almost completely exhausted?

yelnick

Kevin, I like your charts, esp. the third one down - did your [iv] break into [i] today? Let's see if it closes higher. Also let us know if you morph into an ED count to encompass the overlap. If you keep your triangle B ending where it is, you can count the [iii]? as instead (1) of [iii]. and we would be in (ii) down, where no overlap has occurred. It should break as an ABC zigzag ending around Sp1127, then the (iii) of [iii] up near Sp1158. Just a thought. Let me know how you recount it.

Michael

Yelnick,

I don't believe that Kevin's [iv] broke down into [i] today given that the high of [i] was 1130.38 SPX and today's low was 1131.77, which incidentally held last Thursday's low at 1131.32

I am new to Kevin's analysis, but I like the fact that he does not appear to fall prey to "fitting" the count to what he wishes to see, like so many other Elliott Wave bloggers.

yelnick

Michael, you are correct - I thought it was about to but it turned up. So Kevin still has a good count. If you buy his count, his final wave went 35 pts in [i] and 30 in [iii], meaning no more than 30 in [v] (third wave cannot be shortest even in an ED), so max target is today's low of 1131 + 30 = no more than Sp1161. His wave [iv] may not be over, and could break as a triangle with a higher end than this leg a, which might allow a higher end to a 30 pt wave [v]. If the triangle is a symmetrical one, the end of leg e looks like midpoint or around Sp1140, giving a max range of Sp1170. Ending between 1161 and 1170 is right in my target. In terms of time, a triangle wave [iv] would be about a week, and wave [v] about a week, so that puts it right in the time target as well. We shall see ...

Wvave Rust

The 2010 plan to get wealthier in 12 months -

First, a brief and sickly run to a high Fri/Tue then down/sideways into late Feb.

Then the next rally starts - when everybody sees the end of the world.

This current run next week is not THE top.

As I have said so often, there is much more up to come - SPX 1260 minimum this summer. Possibly SPX 1380 to 1420

The coming drop into Feb. is just a minor 4th of intermediate 1 of primary 1.

It's just another bull market.
It just doesn't feel like it yet.
It's not supposed to feel bullish until the third wave. Right?

Summary-
1/ Get out of longs now and short what looks most vulnerable.
2/ Cover in late Feb and reverse to long.
3/ Take most of the summer off.
4/ Then, get short the last rally in the blue chips in mid August.
5/ Cover after Thanksgiving when the down retracement gets to 61.8% from the Aug high.
6/ Reward yourself for a great year with some chocolate for the holidays.

Merry Christmas 2010

wave rust

Eventhorizon

Bird,

What criteria were required for the "squaring at the Wave-b low in July"?

I can see on the chart that it looks like a square, but change the scale of either axis and it is no longer square. So there must be more than just appearance. What is the definition of "squaring"?

Michael

The slow grind higher ( which is bullish action ) continues as commodity stocks once again find strong buying. The shorts continue to get shredded!

Why anyone would want to be fighting this market over the last several months is absolutely beyond me.

Playing the "Pick the Top" game does not help you make money.

:)

yelnick

The slow grind forward usually means topping. Traders simply backing out since they cannot figure the market out. Something like this happened from 1987-1994 - the market then can be counted as a large running triangle. Prechter et al, counted it as an ending diagonal, and then got caught when it took off in the final manic dot-com boom. Looking back, it counts well as a fourth wave triangle within a big third wave from 82-00. As then, this can be counted as a large triangle since Mar6 (or bearish edge). As then, today we have an extremely unpopular healthcare reform, and a pending Repub take back of Congress. I don't think it runs all the way into the end of the year, and unlike last time, if this is a fourth wave triangle (or B wave) from the Big One down in 2008, the next move should be down, not up.

If you count the market as ending a bigger third wave in 1929, followed by a fourth wave triangle to 1949, the 82-00 run is wave 3 of the larger pattern since 1949: 49W3. The 49 wave sits as wave 5 from 1784: 1784W5. In this count, the wave following the end of 49W3 is likely to be another triangle.

If 49W3 ended in 00, we are in 49W4, which seems to be a 17-20 year triangle from 2000-2017/20.

Zoran thought 49W3 in the Dow (not the S&P) was going to end in 2006/7 (he died in 2006). If so, we began 40W4 not in 2000 but in 2007. As such, the drop off 2007 could be counted such that Mar 2009 was the end of wave A of a larger leg [A] of a new triangle. The Hope Rally would then be wave B of leg [A], and a triangle makes sense, since they often are found in B waves, even a narrowing ascending wedge as we have seen. The drop so far can be counted as a flat (a 3-3-5 pattern), and in flats wave C need not break below the bottom of wave A. Normally they would retest. If this instead were considered a zigzag down, wave C needs to break at least a little below A. In either case, a retest is in order, into the range of the Nov08 to Mar09 lows.

DG

The slow grind higher ( which is bullish action )

The slow grind forward usually means topping.

Well, which is it!?

Actually, it can be either. In the context of a strong Corrective formation (i.e. a Corrective formation that makes new price highs unaccompanied by new momentum highs), which may or may not be a Running Correction, which has a specific definition, at least in NeoWave, just prior to the extended wave of an Impulse, it's bullish. Outside of that context, it's bearish, although how bearish is difficult to say in advance.

Bird

Eventhorizon,

Two things went into it. First, the time-price scale is adjusted using a method I first saw used by Don Vodopich, which was to have price increments increase by $1 or $2, $10/$20, etc. (even multiples of 10) for every 100 bars (daily, weekly, hourly, whatever). Second, the structure is rooted in the time from the 2007 high to the 2009 low, which then expands 1.618 in time and price. (There are other possible structures.)

François

Hello!

I'm a french reader.. and I just wanted to say that this is one of the best Elliott website followed in France: a really good level!
Because thise website is interested in diferent Elliott wave methods, this one could interest you. It's based on basic (impulsive) Elliott wave patterns, with the help of volatility, and especially special moving average (DNE). It could maybe interest you if you speak french. It's the unique Elliott wave method I follow predicting pretty well the market since a few months.
The theory:
http://www.tts.lu/forum/analyse-technique/tts-et-dne-1-193.html
An analysis:
http://www.tts.lu/forum/analyse-technique/analyse-cac40-du-10-01-10-1-645.html

Continue the good work ;-)

Cheers,

François

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