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E-Wave for the S&P 500 Index

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Last Post: 1/21/2020 5:31:13 PM - Followers: 79 - 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 - 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

http://www.pretzelcharts.com/




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




 


PostSubject
#3915   The IMF cut global growth estimate to 3.3% rimshot 01/21/20 05:31:13 PM
#3914   SPY 332.00 = daily 21,2 UBB value as rimshot 01/21/20 11:16:28 AM
#3913   Wall Street Sentiment Survey poll results in chart rimshot 01/20/20 11:19:24 PM
#3912   three different Sentiment Survey poll results in chart rimshot 01/20/20 05:33:42 PM
#3911   SPY weekly with rimshot 01/19/20 11:13:08 PM
#3910   $SPXEW daily Point & Figure chart rimshot 01/19/20 11:07:36 PM
#3909   cumulative number of 52-week price highs vs. price rimshot 01/19/20 11:04:43 PM
#3908   Don Wolanchuk and Dave B. deserve much rimshot 01/19/20 08:33:42 PM
#3907   S&P 500 index daily closes chart since 2010 rimshot 01/19/20 07:06:38 PM
#3906   Dow Jones Industrials and the Banking Index monthly rimshot 01/19/20 05:44:09 PM
#3905   225 points upward movement by rimshot 01/19/20 05:22:12 PM
#3904   We are up about 3.3% the first half GLENO34 01/19/20 03:23:03 PM
#3903   rim..How do you find the symbol for GLENO34 01/19/20 03:06:39 PM
#3902   ACWI daily Point & Figure chart rimshot 01/19/20 12:38:12 PM
#3901   going parabolic? really? rimshot 01/19/20 12:22:24 PM
#3900   EFA weekly chart - rimshot 01/19/20 10:44:43 AM
#3899   overall US financial market condition statistics rimshot 01/19/20 09:35:14 AM
#3898   S&P 500 index Top 10 individual stocks rimshot 01/19/20 09:30:59 AM
#3897   Percentage of the 500 stock components rimshot 01/19/20 01:15:01 AM
#3896   https://www.bollingerbands.com/market-timing-charts updated through Friday January 17, 2020 rimshot 01/18/20 11:14:41 PM
#3895   SPY bulls want the near-term action to maintain rimshot 01/18/20 04:34:57 PM
#3894   at the bottom of this weekly SPY chart is rimshot 01/18/20 12:50:09 PM
#3893   SPY weekly RSI-14 value at day's end rimshot 01/18/20 10:24:08 AM
#3892   chart #2 Link posted earlier was a duplicate, so rimshot 01/18/20 01:21:53 AM
#3889   S&P Composite 1500 index new 52-week highs rimshot 01/18/20 01:04:48 AM
#3888   slow to update daily chart for the S&P rimshot 01/17/20 08:19:51 PM
#3887   RSP 60-min chart with 5,3,3 Full STO is rimshot 01/17/20 02:59:05 PM
#3886   daily $SPX with 63,2 BB rimshot 01/17/20 01:55:47 PM
#3885   60-min SPY with others rimshot 01/17/20 01:40:08 PM
#3884   https://c.stockcharts.com/c-sc/sc?s=%21GT20SPX&p=D&yr=0&mn=5&dy=0&i=p16189262697 rimshot 01/17/20 12:38:44 PM
#3883   McO moving average smoothing for the rimshot 01/17/20 12:31:18 PM
#3882   RCKS - thanks for your added comments, and rimshot 01/17/20 12:14:42 PM
#3881   rimshot looking at the 15 min A/D is not RCKS 01/17/20 11:21:09 AM
#3880   Key Long-term Breakout? RCKS 01/17/20 11:10:15 AM
#3879   $331.82 = weekly 20,2 Upper Bollinger Band value rimshot 01/17/20 10:21:51 AM
#3878   No Pretzel Update today or at least not yet.......... RCKS 01/17/20 09:57:47 AM
#3877   SPY daily closes chart with rimshot 01/17/20 09:54:32 AM
#3876   six cumulative net Advance-Decline lines shown rimshot 01/17/20 09:12:39 AM
#3875   $NYA daily - rimshot 01/16/20 09:41:10 PM
#3874   JLS Thanks for sharing and the kind offer. RCKS 01/15/20 10:20:27 AM
#3873   Focus on The Near-term RCKS 01/15/20 09:54:11 AM
#3872   That particular fire ... JLS 01/14/20 03:41:15 PM
#3871   JLS That is crazy how close you came to RCKS 01/14/20 01:12:01 AM
#3870   There was damage. JLS 01/13/20 06:41:35 PM
#3869   JLS I should have asked many times before now RCKS 01/13/20 02:46:58 PM
#3868   Agree on that. JLS 01/13/20 12:37:13 PM
#3867   Not Much to Add RCKS 01/13/20 12:30:43 PM
#3866   JLS I take the same view of that chart RCKS 01/13/20 09:48:53 AM
#3865   Reasonable Markets ... JLS 01/12/20 08:52:23 PM
#3864   I'm in your camp on this one JLS RCKS 01/12/20 08:15:10 AM
PostSubject