Elliott Wave Principle

[rayrohn]

FWIW My weekly chart of the SPX

[sumisu]

Prechter's Deadly Bearish Big Picture:

The 7-Year Crisis Cycle Explained

by Robert Prechter, President, Elliott Wave International | June 18, 2010

http://www.financialsense.com/Experts/ewave/2010/0618.html

[sumisu]

Dow Slumps 3.6%: "We Are On Schedule for a Very, Very Long Bear Market," Prechter Says

Posted May 20, 2010 05:12pm EDT by Aaron Task in Investing

http://finance.yahoo.com/tech-ticker/dow-slumps-3.6-%22we-are-on-schedule-for-a-very-very-long-bear-market%22-prechter-says-492864.html?tickers=^DJI,^GSPC,^IXIC,^RUT,^VIX,IWN,TLT

The global selloff in stocks accelerated Thursday, sending the Dow down 3.6% to 10,068 while the S&P 500 lost 3.9% to 1,071.59 and the Nasdaq shed 4.1% to 2,204.

All major U.S. averages are now down for the year and at least 10% below their 2010 highs, meaning the downturn has officially entered "correction" territory.

Unfortunately (for bulls), there's much more selling ahead, according to Robert Prechter, president of Elliott Wave International and author of Conquer the Crash.

"We should be in for [another] week or two of pretty serious selling," Prechter says. "They'll be bounces along the way...but I think this should last a long time. We should be on schedule for a very, very long bear market period."

In the near-term, the veteran market watcher predicts a "dramatic increase in volatility," beyond what's already occurred. The CBOE Volatility Index (VIX) rose another 30% today and is now up about 180% from its late April lows.

Notably, today's selling occurred despite a rally in the euro amid reports of central bank intervention. Joe Brusuelas of Brusuelas Analytics says, "The capitulation in today's market has more to do with the unwinding of the easy money [carry] trade on commodities," which fell again today, with notable weakness in energy and palladium.

Meanwhile, Treasury prices continued to benefit from the "risk aversion" trade with the yield on the benchmark 10-year note falling to 3.21%.

Broken Record or Market Sage?

Other than to say "a long way down," Prechter wouldn't say how much further he thinks the market will fall, suggesting a repeat of the 1930-32 scenario when "extremely sharp rallies" kept investors interested and "feeling like a bottom [was] forming."

Anyone familiar with Prechter knows he's been predicting doom for a long time so it's tempting to dismiss his latest warning -- a veritable repeat of what he said here in February. But he's not a perma-bear and did turn bullish ahead of the bottom in March 2009.

More dramatically, in 1978 he co-authored Elliott Wave Principle - Key To Market Behavior, which predicted a great bull market similar to the 1942-1966 rally. By his own admission, Prechter underestimated the extent of that historic rally, which ran from 1982-2000 and saw the Dow rise 1,500% from 777 to 11,723.

Prechter says the market has spent the past 10 years building a "major head and shoulders" top from those 2000 highs, even though they were exceeded in 2007. Ultimately, he expects a "corrective mode that's going to retrace virtually the entire" 1982-2000 bull market.

"The best place for most people to be is in cash" and equivalents, he says. "You want maximum liquidity until this thing blows over."

Editor's note: We did NOT interview Prechter because the market was tumbling; today's appearance was scheduled earlier this week. Sometimes it's better to be lucky than good...

[blasher]

oh, ok .. thanks! ... here's another source of Free Articles:

and they are all listed on one page as you scroll down:

http://elliottswave.blogspot.com/

.

[sumisu]

>Not yet a member; you have to be a subscriber to see this page.

sumi

[sumisu]

Fibonacci Techniques for Math Geeks -- and Everyone Else, Too

by Editorial Staff, Elliott Wave International | March 29, 2010

http://www.financialsense.com/Experts/ewave/2010/0329.html

[blasher]

How to Flee the Flock . . .

http://www.elliottwave.com/freeupdates/archives/2010/03/24/How-to-Flee-the-Flock.aspx?cn=5b&cn=5b

At different times in our history, political operatives would plant applauders in the audience when their candidates made speeches. The rest of the audience would usually follow. The newspapers would then report the candidate was well-received.

The mother of a famous American comedian Milton Berle sat in the front row when her son performed. She would start to laugh hysterically when a joke fell flat. The "flock" usually followed.

George Evans once managed Frank Sinatra's career. Explaining Sinatra's meteoric rise in the early '40s, Evans said "...Sinatra's talents provided an 'initial impetus'. His [Evans'] own planting of 'organized and regimented moaning' in Sinatra's crowd accounted for some of the panic." ("Prechter's Perspective")

In a crowd, it's easy and comfortable to do what others are doing, especially when emotions are running high, like at a concert. Or when your money is at stake.

The absolute majority of investors are unsure whether to buy or sell -- they simply do as others do. Herding happens. It's a natural process: "...emotional impulses from the limbic system impel a desire among individuals to seek signals from others in matters of knowledge and behavior and therefore to align their feelings and convictions with those of the group. 'Wall Street' certainly shares aspects of a crowd, and there is abundant evidence that herding behavior exists among stock market participants." (Robert Prechter, Science is Revealing the Mechanism of the Wave Principle.)
to read more, click the link near the top of this post.

[blasher]

Why Most Financial "Truisms" Are False

Let me know if you do not have access to this page.
I don't know if I see it because I am a member or if everyone can get to it:

http://www.elliottwave.com/single-issues/the/1003EWT-Why-Most-Financial-Truisms-Are-False.aspx?code=cg&cn=5b

.

[blasher]

Learn Elliott Wave Analysis -- Free

at: http://elliottswave.blogspot.com/ .

.

[blasher]

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[blasher]

read more at . . .

http://www.stocksdoc.com

.

[sumisu]

Same Day. Same Event. Same Market. Different Story!

There is no group more subjective than conventional analysts

by Vadim Pokhlebkin, Elliott Wave International

February 23, 2010

http://www.financialsense.com/Experts/ewave/2010/0223.html

[sumisu]

Bob Prechter Points Out The Many Signs Of Deflation

Yes, You Heard Us Right

by Nico Isaac, Elliott Wave International

February 18, 2010

http://www.financialsense.com/Experts/ewave/2010/0218.html

[blasher]

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[blasher]

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 Elliott Wave International (EWI) is the world's largest  
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 provides 24-hour-a-day market analysis to institutional and  
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[sumisu]

Bernanke's Burn Notice -- Why Now?

Research Reveals Insight Into Fed Chairman's Popularity

by Robert Prechter, President, Elliott Wave International

January 27, 2010

http://www.financialsense.com/Experts/ewave/2010/0127.html

[blasher]

For those who like Trading Options . . .
you can use Elliott Wave Principles in conjunction with
Options Trading as well.
Check out this course:
http://www.elliottwave.com/a.asp?url=/education/options-trading/&cn=5b

.

[blasher]

Thanks! 'sumisu'. /e

[sumisu]

Bob Prechter: The Bear Market Is Back

by Peter Brimelow

Thursday, January 21, 2010

provided by Market Watch

http://finance.yahoo.com/banking-budgeting/article/108637/bob-prechter-the-bear-market-is-back

Proponents of a weird investment theory say another crash is coming. Even weirder: they were right last time.

I wrote my first MarketWatch column on Robert Prechter and his family of investment letters devoted to the esoteric Elliott Wave theory.

It got a lot of very angry email. Prechter's superbearishness was very unpopular, and that time very unprofitable. I judiciously pointed out that Prechter was trying to spot junctures, the hardest of all market tricks, and noted "the prize for calling one of these epochal shifts is enormous, as it was in the early 1980s" -- when Prechter had been an early bull. More from MarketWatch.com:

• New High Data Suggest New Highs Ahead

• Dines Disappoints on Deflation, Not Returns

• Fund Manager Sees Another Crash in Home Prices

It took a long time. But it happened during the Crash of 2008, during which the Elliott Wave Financial Forecast was one of the very few letters to make money.

For a while, it looked as if the Elliott Wave was on a roll (if waves can be on rolls). EWFF was one of the first letters to call for a stock market rebound. In mid-summer, it argued that the Dow could reach 10,000 -- but that the bear market would then resume, ending in devastating deflation.

Well, the Dow did reach 10,000. What now?

EWFF didn't benefit fully from its prescience because it baled out too soon. Over the past 12 months, EWFF is down 5.05% by Hulbert Financial Digest count, versus a 28.3% gain for the dividend-reinvested Wilshire 5000 Total Stock Market Index.

Note, though, that over the past three years, the letter is up 3.8% annualized versus a negative 5.25% annualized loss for the total return Wilshire 5000. And over the past ten years, the letter is up an annualized 1.39%, versus negative 0.27% annualized for the total return Wilshire 5000. Many more popular letters have done much worse.

What happens now could hardly be worse, according to EWFF. It says: "2010 is the year when the bear market in stocks returns in full force." It compares the situation to the short-lived rebound after the initial break in 1929, and says that "a meaningful close" below 10,489 should see a similar collapse to new bear market lows.

EWFF also expects the spread between high and low-grade bonds to experience "a record widening" and thinks gold will fall "below $680." It does expect a rally in the dollar, but that is merely an aspect of deflationary forces getting out of control. Prechter argues, referring readers to his recent book "Conquer The Crash," that the yield on Treasury bills might actually become negative and for that reason advocates holding greenbacks.

It's difficult to summarize quite why all this is going to happen because Prechter and his colleagues explain it in terms of their complex cycle theory -- which, however, is subject to readjustments and reinterpretation. This is one reason that Elliott Wavers are so roundly disliked by so many investors.

Some good news, though: Prechter says his cycle work suggests that stocks and gold will finally bottom in nominal terms in 2014. After that, gold will outperform stocks. This, he writes, "may indicate a political decision, to be made at that time, to force inflation through currency printing."

Elliott Wavers place a lot of faith in parallel social developments. EWFF writes that gold, which it describes as "a bull market sport," is going into decline although those involved don't realize it:

"At this point, for instance, Nike Inc. is sticking with Tiger Woods and investors are sticking with Nike. The stock pushed to a new recovery high of $66.62 a share on December 31, which is not far from its all-time high of $70.60 in March 2008. It's still a great place to exit the stock."

Copyrighted, MarketWatch. All rights reserved. Republication or redistribution of MarketWatch content is expressly prohibited without the prior written consent of MarketWatch. MarketWatch shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

[blasher]

A new Post about Individual Investors and what
they are doing wrong right now: http://www.stocksdoc.com/

Good Luck !!

[blasher]

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[blasher]

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About the Publisher, Elliott Wave International

Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private around the world.

[blasher]

Awesome! new Post (FREE) about the US Dollar action:

http://elliottswave.blogspot.com/

.

[blasher]

FREE Week at Elliot Wave . com . . . ...

Learn more about FreeWeek, and download your free reports here

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[blasher]

exactly. thanks! /e

[rayrohn]

Impulse wave

Description

Impulses are always composed of five waves, labeled 1,2,3,4,5. Waves 1, 3 and 5 are themselves each impulsive patterns and are approximately equal in length. Waves 2 and 4 on the contrary are always corrective patterns.

Rules and guidelines

The most important rules and guidelines are:

o Wave 2 cannot be longer in price than wave 1, and it must not go beyond the origin of wave 1.
o Wave 3 is never the shortest when compared to waves 1 and 5.
o Wave 4 cannot overlap wave 1, except in diagonal triangles and sometimes in wave 1 or A waves, but never in a third wave. In most cases there should not be an overlap between wave 1 and A.
o As a guideline the third wave shows the greatest momentum, except when the fifth is the extended wave.
o Wave 5 must exceed the end of wave 3.
o As a guideline the internal wave structure should show alternation, which means different kind of corrective structures in wave 2 and 4.

In which wave

Impulse patterns occur in waves 1, 3, 5 and in waves A and C of a correction( this correction could be a wave 2, 4 or a wave B, D, E or wave X).

[blasher]

yes, I agree . . but that is part of Wave-3 . . .
Wave-4 can not overlap Wave-1 . . .
but an abc correction within Wave-3 can .. IMHO.

[rayrohn]

lol Me too most of the time my counts are a guess at best !!!!

the area that u have labeled iv(c) is above what u labeled as 1

that is what I see as an over lap

[blasher]

I don't see an overlap except slightly in
Wave-2-iv-c nudging above the bottom of Wave-1.

BUT ... what do I know ?!!?

http://elliottswave.blogspot.com

.

[rayrohn]

Wave 4 cannot overlap wave 1, except in diagonal triangles and sometimes in wave 1 or A waves, but never in a third wave. In most cases there should not be an overlap between wave 1 and A.

http://www.elliott-wave-theory.com/elliott2.html#patterns

lol I am finding it hard to come up with a count on the q's also....

[blasher]

here is my eWave Chart for QQQQ . . . .

http://stockcharts.com/c-sc/sc?s=QQQQ&p=D&st=2007-09-01&i=p65285319170&a=170169561&r=837

[blasher]

great new article posted here:

. http://elliottswave.blogspot.com/ .

on Black Monday.

[blasher]

SPY is just below the 61.8% retracement (105.20) of it recent
October-2nd Low.
It needs to get above this to keep hopes of a nice Bounce alive.

[sumisu]

>Thanks, I need a bounce!

[blasher]

QQQQ is at its 61.8% retracement level
from the rally since the recent October 2nd Low.
This level (41.90) is Supporting the Drop today
and we'll probably get a small Bounce from it soon.

[rayrohn]

lol NO

[blasher]

LOL . . I used to be a member in Middle- and High- School.
Then they started asking for money .. so I left.
I was the smart one, why should I pay them!
I just took that test and got 25 out of 30 and it said
I would qualify to get back in.
Yeah .. no thank-you.

Have a great weekend all !!!!!!!

[sumisu]

OT: good link.

So, are you a Mensa?

http://www.mensa.org/workout2.php

[blasher]

Do you notice all of the Bullish headlines out there ...
the Recession is over
the worst is behind us
it's time to jump in
don't miss out
. . .
This is also part of Elliott Wave's History's Hidden Engine.

It happens time and time again ...
the more Bullish people get, the closer to the top we are.
Also, as Earnings increase, we get closer to the top as well.

Good Luck !!

[blasher]

nice .. I'll study that in my spare time . . .
just for fun!
not.
LOL

[rayrohn]

lol yes probably but I been playing around with them a little ...

here a link

http://www.maths.surrey.ac.uk/hosted-sites/R.Knott/Fibonacci/lucasNbs.html

[blasher]

Lucas Numbers! . . LOL . . . sure . . .
however, I think Fibonacci's are much more popular
and herd the masses much more ...
therefore it would be wiser to Trade with Leonardo of Pisa
rather than with François Édouard Anatole Lucas.

[rayrohn]

so is the SPX ....

looking at a 10 year chart I can see a 5-3-5 retracement off the march low and works out real nice with a 50% retracement of the OCT 2007 high and pretty close to a A=C ....





it's been an interesting price move in 7 months and profitable .... that type of a move usually is associated with a down move rather that a bull move up in a bull market (now what kind of a rally is that called ???)

u like Lucas Numbers ???

oct 07 to apr 09 is 18 months
and apr to oct 09 is 7

[blasher]

QQQQ is at key Fib level now . . . .
at 38.2% (43.48) retracement off of today's high
from yesterday's Low.
The battle around 43.50 continues.

[blasher]

nice catch! . . . yes, sure does look like
the CRB is greatly influenced by OIL:

[rayrohn]

the CRB index broke out of a ascending triangle but IMO this index has a lot to do with the Price of OIL



WTIC Chart



sorry non of these chart have any e-wave annotations

[blasher]

With this morning's Inflation numbers (PPI) continuing
to show the current lack of inflation, make sure you read
this article about how to deal with DEFLATION.

Enjoy and Good Luck !!

.

[blasher]

I'm starting to Post Elliott Wave stuff
over here as well: http://elliottswave.blogspot.com/ .

.

[sumisu]

A Lesson in Drawing and Using Trendlines

by Elliott Wave International | September 25, 2009

http://www.financialsense.com/Experts/ewave/2009/0925.html

By Jeffrey Kennedy

When I began my career as an analyst, I was lucky enough to have some time with a few old pros.

One in particular that I will always remember told me that a kid with a ruler could make a million dollars in the markets. He was talking about trendlines. I was sold.

I spent nearly three years drawing trendlines and all sorts of geometric shapes on price charts. And you know, that grizzled old trader was only half right.

Trendlines are one the most simple and dynamic tools an analyst can employ... but I have yet to make my million dollars, so he was wrong -- or at least early -- on that point.

Despite being extremely useful, trendlines are often overlooked. I guess it’s just human nature to discard the simple in favor of the complicated.

(Heaven knows, if they don’t understand it, it must work, right?)



In the chart above, I have drawn a trendline using two lows that occurred in early August and September of 2003.

As you can see, each time prices approached this line, they reversed course and advanced.

Sometimes, soybeans only fell to near this line before turning up.

Other times, prices broke through momentarily before resuming the larger uptrend.

What still amazes me is that two seemingly insignificant lows in 2002 pointed the direction of soybeans -- and identified several potential buying opportunities -- for the next six months!

Get more lessons like the one above in the free 50-page Ultimate Technical Analysis Handbook. Learn more and download your free copy here.

Copyright © 2009 Jeffrey Kennedy
Editorial Archive

Bio: Jeffrey Kennedy is the Chief Commodity Analyst at Elliott Wave International (EWI). With more than 15 years of experience as a technical analyst, he writes and edits Futures Junctures, EWI's premier commodity forecasting service.

contact information

Robert Prechter | P.O. Box 1618 Gainesville, GA 30503
800-336-1618 Toll Free | 770-536-0309 Phone | 770-536-2514 Fax

[blasher]

Good article about Trend-lines . . . ...

... ElliottsWave ...

other Elliott Wave stuff available as well.

.