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E-Wave for the S&P 500 Index

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Last Post: 4/28/2017 10:42:54 AM - Followers: 69 - Board type: Free - Posts Today: 0

This board is intended to debate the usefulness of E-Wave (Elliott Wave), for those that practice E-Wave, it is an opportunity for you to share your knowledge about E-Wave.

Some have a perception that E-Wave is for those that just want to be different and that E-Wave has no meaningful value in trading,  this is your opportunity to change that perception.

All E-Wavers are encouraged to post their current counts for SPX here. All I ask is when your count changes post a reply to your last count and post your new count. This way those that are interested in learning E-Wave can follow you. Also be prepared to answer questions and justify your count. If your a master at your system you shouldn't be bothered with answering questions and standing behind your trading philosophy.

Any use of profane language or name calling will not be tolerated. The moderator will decide what crosses the line. Do not question the moderator.

Feel free to use other trading systems in comparing E-Wave.

No soliciting allowed at this board at any time for subscriptions or selling of trading systems , publications, educational material, or anything else relating to paid financial services.

Insure that all questions and answers are tactful, professional and not personal in nature. That to will be determined by the moderator.

Those caught spinning there answers by using sarcastic remarks will be called out. Same holds true to those asking the questions.

E-Wave site Links:

Elliott Wave Theory -

Tony Caldaro -

 Pretzel :
(1) Pretzel presents both a Bull and Bear case.
(2) Pretzel gives both Triggers and Targets

Safehaven E-Wave analysis -

Elliott Wave Theory Guidelines -

Elliott Wave Basics -

Elliott Wave Rules & Guidelines -

Elliot Wave Fractals -

Elliott Wave Oscillator -

E-Wave Basics:

The very backbone of Elliott Wave analysis comes with the mass psychology that accompanies each and every price structure which reinforces the degree of labeling of where we might be in the larger pattern overall. Presented here is a bullish guideline (see chart below) of these social moods that will help the reader to ascertain where we might be at any given time, and more importantly, to what degree of trend.

Impulsive Waves

1st waves are accompanied by the psychology that ''nothing has changed''. In other words, this counter trend rally is perceived as another selling or shorting opportunity in preparation for the next move down. Technically, simple momentum tools like the Relative Strength Index, or more complex tools like the McClellan Oscillator, will usually breakout of indecision or bottoming formations during this time. These momentum breakouts suggest that the balance of money flow is changing direction in preparation for what the price action will later confirm.

2nd waves are ''reinforcement" waves that seem to confirm the overall feeling of wave 1. In this bullish example, those who suggested that more downside was coming during wave 1 will come back and say ''I told you so''. The other characteristic of 2nd waves is that the level of anxiety will generally be more acute than it was prior to the beginning of wave 1 but now at higher price levels than were seen at the actual price bottom. Because of this, retracements will tend to be deep. Technically, the momentum tools mentioned above in wave 1 would be snapping back to what were their breakout areas that confirmed a possible change in direction in which took place in wave 1. All of this action is in spring board preparation from where 3rd waves begin.

3rd waves are ''wonders to behold'' and for many good reasons. Technically, this is the time where most analysts throw in the towel as price is now confirming what the internals told the analyst during wave 1 which was a change in direction was probable. This is also the time in which extremes in many indicators will show up - something in which I refer to as ''flags'' - which are later used in approximating the termination point of the entire 5 wave pattern sequence structure. In equities, these extremes will be measured in the raw data of both breadth and volume - and the strength or weakness of the indicators that use such information - as well as their relationship to each other. Price pattern wise, one will always be able to identify a third wave because of the fact that price patterns will break out of basic support or resistance areas that were previously controlling the price pattern up until that time. Psychologically, this is when the mind set is that we remember how we all got burned before and that in no way is this the start of a major move higher - also known as climbing the ''wall of worry''. Once the market gets high enough, people start throwing in the towel on their bearish mind set, and this continues to a point when all of the ''willing'' buyers are in the market. 3rd waves are also never the shortest wave in a 5 wave structure, and more times than not, are generally the longest wave in either price, percentage gain, or both, to what will eventually be the larger 5 wave pattern structure sequence overall.

4th waves ''come out of the blue'' just when no one expects them and just when everyone thinks that the market can go nowhere but up. This is usually caused by a news related item that was prevalent during the previous bear market. The psychology of the 4th wave is that those who didn't sell back at wave 2 will now be seemingly justified in sticking with those same convictions. This mentality, along with the momentum in which wave 3 brought, basically sets a floor for this correctional process, and why this structure tends to be shallow in its overall pull back. Technically, fourth waves tend to take out the internal momentum lows made during wave 2 thereby confirming that wave 3 has indeed ended and will not turn into a "wave pattern extension". Once there is a basic resolution to whatever the problem was that led to the halt of the previous advance, this is where wave 5 begins.

5th waves are the most ''euphoric'' of the entire wave structure as both technicians and fundamentalists all come to the conclusion that the worse is now behind us. This is where the media joins the party as well, and thereby causes the ''buy with both hands'' mass psychology that comes with this pattern structure. Because of this, the idea that ''this time it's different'', and that the market can go ''nowhere but up'' becomes the overall mind set and people buy just about anything just to say that they had participated. Technically, the internals diverge with the "flag" extremes seen during wave 3 until all of the willing AND unwilling buyers come into the market at which time the 5 wave price pattern structure terminates.

Corrective Waves

"A" waves are then initially looked upon as profit taking phases - that everything is OK - but the market needs to rest. This is when most buy on the dips, and stock brokers are on the phone saying that this is a ''tremendous buying opportunity'' no matter how the fundamentals look, and the news that accompanied the previous 5 wave structure is used in justifying such mentality. This type of thing goes on until the news gets so bad that many start believing that a bear market is about to resume, which promotes heavy selling, and why the internals make their counter trend extreme "flags" during this time.

"B" waves are sucker plays where the market is not in sync - and usually is news related in one way or the other. In the case of equities, one will see inconsistencies between one index and the other either in price or with breadth and volume statistics that accompany such a move. ''B'' waves can make new price extremes that are higher than the orthodox price termination point of the previous 5 wave structure or only partially retrace the ''A'' wave move based on how much emotion accompanies such a pattern. If something doesn't look right or feel right about a price pattern, it's more than likely a ''B'' wave.

"C" waves correct the inconsistencies or indecisiveness that ''B'' waves bring, and again is usually accompanied by news for the masses to digest. Similar to a 3rd wave structure, it starts slowly in accepting that things are not what they seem to be, and then accelerates to a point when all the willing AND unwilling sellers throw in the towel and give up. Technically, the internals will diverge from those extremes seen in wave ''A'', which then sets the platform for a continuation of what is now a new advancing trend.

Of course, time context is everything when trying to decide to what degree each of the above definitions may apply, but these are the general guidelines I personally use when I look at the markets in trying to determine where we are in the larger pattern context. As you can see, it doesn't really depend on having a vast knowledge of Elliott Wave to at least have a grasp of the methodology itself, and this guideline can be aptly applied in bear markets as well.

-Technical Watch 2003


#3023   Caution Levels to Watch RCKS 04/28/17 10:42:53 AM
#3022   First Upside Targets Captured RCKS 04/26/17 10:53:50 AM
#3021   SPX Update..........Finally RCKS 04/24/17 11:48:55 AM
#3020   SPX & RUT Updates RCKS 04/21/17 12:48:04 PM
#3019   If I'm Being Redundant, Then Please Allow Me RCKS 04/19/17 11:59:55 AM
#3018   Don't Count Your Chickens Until the Cows Come RCKS 04/17/17 10:20:01 AM
#3017   So far, so good.... RCKS 04/12/17 10:40:10 AM
#3016   As the Businessman Said to the Beggar.... RCKS 04/10/17 10:13:22 AM
#3015   More Fun than a Bucket of Monkeys RCKS 04/07/17 09:56:10 AM
#3014   Bears Little Respite. Looks to be Short-Lived RCKS 04/05/17 11:38:14 AM
#3013   No Material Change RCKS 04/03/17 11:07:01 AM
#3012   Bull Count vs Bear Count RCKS 03/31/17 12:07:35 PM
#3011   Micro Patterns vs. Recent Market Behavior RCKS 03/29/17 11:24:33 AM
#3010   Bears Still in Control RCKS 03/27/17 12:55:33 PM
#3009   SPX and BKX Updates RCKS 03/24/17 11:30:11 AM
#3008   Downside Target 1 Captured RCKS 03/22/17 01:45:28 PM
#3007   No Surprises... Yet RCKS 03/20/17 10:07:40 AM
#3006   Double post, so here is a long term RCKS 03/17/17 03:02:41 PM
#3005   T1/T2 Captured; No Change RCKS 03/17/17 03:02:31 PM
#3004   A Bit More from the Market RCKS 03/15/17 11:37:35 AM
#3003   SPX & BKX Updates RCKS 03/13/17 10:45:56 AM
#3002   Downside Targets Captured RCKS 03/10/17 09:25:43 AM
#3001   SPX and RUT Updates RCKS 03/08/17 01:00:01 PM
#3000   The Market as a Quantum Probability RCKS 03/06/17 09:48:22 AM
#2999   Rally Continues on Important Hair Ban RCKS 03/01/17 12:40:15 PM
#2998   Market Pulls a Little "Gotcha!" RCKS 02/27/17 11:01:11 AM
#2997   Some Random Thoughts for Bears RCKS 02/23/17 01:14:23 PM
#2996   SPX Update: RCKS 02/21/17 11:47:50 AM
#2995   and Another Chart Worth Watching RCKS 02/17/17 10:40:04 AM
#2994   And The Band Played On RCKS 02/15/17 12:42:48 PM
#2993   SPX Update: And.. RCKS 02/13/17 11:08:04 AM
#2992   The Off Switch RCKS 02/10/17 12:33:28 PM
#2991   Why Do We Trade? RCKS 02/08/17 11:24:09 AM
#2990   How Our Brains Block Us from New Information RCKS 02/06/17 12:46:50 PM
#2989   SPX Update RCKS 02/03/17 12:19:19 PM
#2988   Washing Cars in the Rain RCKS 02/01/17 02:18:28 PM
#2987   Why a Fun-damental Bias Isn't Always "Fun" RCKS 01/30/17 11:01:20 AM
#2986   Back to Back Rare Patterns RCKS 01/27/17 10:26:17 AM
#2985   Day 217..........Deep within the Chop Zone RCKS 01/23/17 02:03:46 PM
#2984   Next Break Could Finally Be Significant RCKS 01/20/17 11:53:06 AM
#2983   Obama Signs Last-Minute Pardon for the Algos RCKS 01/18/17 11:20:08 AM
#2982   What Will Friday the 13th Bring for the Market? RCKS 01/13/17 11:04:29 AM
#2981   If a Woodchuck Could Chuck Norris RCKS 01/11/17 11:17:17 AM
#2980   The Cheese Stands Alone RCKS 01/09/17 11:18:56 AM
#2979   Edwards and Magee.... RCKS 01/06/17 10:26:07 AM
#2978   SPX Update: 2017 RCKS 01/04/17 11:03:49 AM
#2977   An Ultra-Rare Pattern to Close the Book on 2016 RCKS 01/02/17 01:27:54 PM
#2976   A bit behind traveling during the Holidays will RCKS 01/02/17 01:20:44 PM
#2975   Fridays post: Are Fourth Waves Annoying or Just RCKS 12/26/16 11:26:05 AM
#2974   SPX is Poised for (sound of retching) RCKS 12/21/16 10:59:34 AM