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E-Wave for the S&P 500 Index

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Last Post: 9/27/2021 9:36:20 AM - Followers: 81 - Board type: Free - Posts Today: 1

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 - http://www.elliottwave.com/introduction/wave_theory.aspx?code=WPMS&articleid=0

Tony Caldaro - http://caldaro.wordpress.com/author/oewcaldaro/

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


Safehaven E-Wave analysis - http://www.safehaven.com/article/24860/daily-analysis

Elliott Wave Theory Guidelines - http://www.tradingfives.com/articles/elliott-wave-guide.htm

Elliott Wave Basics - http://www.tradingfives.com/articles/elliott-wave-theory-basics.htm

Elliott Wave Rules & Guidelines - http://www.wavaholic.com/2010/01/elliott-wave-rules-and-guidelines.html

Elliot Wave Fractals - http://www.tradingfives.com/articles/elliott-wave-fractals.html

Elliott Wave Oscillator - http://www.tradingfives.com/articles/elliott_oscillator.htm

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


#4524   "....we're in much the same place we were Friday........." RCKS 09/27/21 09:36:20 AM
#4523   "....."the fate of the free world" may hinge RCKS 09/24/21 09:31:29 AM
#4522   "So far, nothing to add to last update, RCKS 09/22/21 09:34:18 AM
#4521   "...."major" as in: It was a possible "end RCKS 09/20/21 08:56:39 AM
#4520   "......both SPX and NYA have completed minimum retests RCKS 09/17/21 10:07:54 AM
#4519   Thanks RCKS...Looks like great minds work the same GLENO34 09/15/21 09:42:10 AM
#4518   ".........the question at the moment seems to be RCKS 09/15/21 09:36:04 AM
#4517   Glen's CCI rules posted by rimshot at si RCKS 09/13/21 04:44:43 PM
#4516   Bearish targets have been claimed.... RCKS 09/13/21 09:33:04 AM
#4515   ".......yesterday's low is the first zone bears want RCKS 09/10/21 12:38:46 PM
#4514   "Bulls.......... risk the breakout being a head-fake." RCKS 09/08/21 01:12:16 PM
#4513   "In conclusion, SPX and NYA are holding their RCKS 09/03/21 09:47:28 AM
#4512   "....bulls would like to see this back test RCKS 09/01/21 09:48:23 AM
#4511   "...so bears still have a shot to push RCKS 08/30/21 09:47:53 AM
#4510   ".....we can see that the downside potential is RCKS 08/27/21 09:38:55 AM
#4509   "...sustained trade over rising black gets us 4530-4550. RCKS 08/25/21 09:45:03 AM
#4508   "Bull Inflection still holding so No Change" RCKS 08/23/21 12:12:02 PM
#4507   Erin didn't get what she expected ... JLS 08/21/21 02:52:53 PM
#4506   JLS let me add Erin's take to your post RCKS 08/21/21 12:34:27 PM
#4505   JLS I think its possible but I would add RCKS 08/20/21 05:17:24 PM
#4504   What are the odds? JLS 08/20/21 04:23:05 PM
#4503   "....there's at least the possibility that 5 of RCKS 08/20/21 09:38:43 AM
#4502   "....the decline appears to be three down, it RCKS 08/18/21 12:26:52 PM
#4501   "Friday was an 8 point range, so still RCKS 08/16/21 09:42:19 AM
#4500   "....the market has reached its next meaningful zone, RCKS 08/13/21 11:47:51 AM
#4499   "...the potential of something more bearish developing..." RCKS 08/11/21 02:27:38 PM
#4498   RCKS..Thanks for the update..Still lots of calls for GLENO34 08/09/21 09:45:18 AM
#4497   "Still wary of a trip back toward Bull IV..." RCKS 08/09/21 09:26:21 AM
#4496   Not Much To Add RCKS 08/06/21 04:56:04 PM
#4495   "....I suspect the current correction may grow more RCKS 08/04/21 02:44:55 PM
#4494   The Other Side RCKS 08/02/21 09:35:57 AM
#4493   "Why the Fed Will Be Powerless During the RCKS 08/02/21 09:23:46 AM
#4492   Complacent!!!! Sorry for the lateness of the post. Actually RCKS 07/30/21 07:43:18 PM
#4491   Fed Day RCKS 07/28/21 12:33:32 PM
#4490   "In conclusion, SPX is likely in Bull: 5..." RCKS 07/26/21 09:30:56 AM
#4489   "...now bears are running out of real estate...." RCKS 07/23/21 12:54:09 PM
#4488   That would be very welcome IMHO. JLS 07/21/21 10:50:01 PM
#4487   JLS I think a bigger correction is coming but RCKS 07/21/21 01:00:50 PM
#4486   "In conclusion, SPX hit its inflection zones and RCKS 07/21/21 12:39:18 PM
#4485   I would be one of those bears ... JLS 07/19/21 11:25:48 AM
#4484   "At this point, our near-term focus now shifts RCKS 07/19/21 09:36:06 AM
#4483   I'm still unpacking from my move. JLS 07/19/21 03:49:18 AM
#4482   "....bears would like to see a rejection there RCKS 07/16/21 09:44:39 AM
#4481   http://www.pretzelcharts.com/ "Last update noted that higher prices were ulti RCKS 07/14/21 09:33:51 AM
#4480   Inflation Update: RCKS 07/12/21 09:41:15 AM
#4479   "If Bull 4 holds, then we're likely on RCKS 07/09/21 09:32:23 AM
#4478   SWAG SPX retrace targets ... JLS 07/08/21 05:42:42 PM
#4477   Hi JLS RCKS 07/07/21 03:52:06 PM
#4476   "If bears want to keep their diagonal on RCKS 07/07/21 03:43:28 PM
#4475   Back in the chair again ... finally JLS 07/02/21 08:50:50 PM
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