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      The "Potent Directors" Presumption

      Virtually all conventional financial analysts and economists accept assumptions about certain men's ability to 
      control the social future, be they presidents, treasury secretaries or central bankers. 

      Last month, an article from The Washington Post entitled, "Key Players Control Money Supply," tells us that the 
      Bank of International Settlements "helps keep the banking system steady in turbulent times... protests the world financial system...[and] focuses on ensuring that [a local] crisis doesn't threaten the world's intricate [banking] system. "The BIS, says the article, has "secret conversations that can shape the course of global economy."

      This type of belief permeates practical economic discourse. It persists despite failure after failure of officials to 
      control money, interest rates, commodity prices, retail prices, stock markets, and economic growth and contraction. 
      The fact is that central banking authorities never reverse a financial spiral, in either direction. They participate in [and typically encourage] them in uptrends and fail uselessly at them in downtrends. As I type this sentence, I am looking 
      at this headline in The Wall Street Journal: 

      "Why the World Bank Failed 
      To Anticipate Indonesia's Deep Crisis." 



      The Measurement of Mass Psychology

      Webster's definition of psychology : 
      “The traits, feelings, actions and attributes, collectively of the mind.”

      In order to measure mass psychology, the action of the composite mind must be expressed in figures and plotted on a chart. When plotted, the resultant graph will show a pattern. These patterns follow definite rules. Many scientists have disclosed that human behavior (action of the composite mind) moves in waves, but they did not discover that these waves observe patterns, because graphed records were not then available. 

      For years, the word “cycle” has been bandied about but never analyzed. The Wave Principle definitely describes the cycle of mass psychology. When plotting the fluctuations of human activity and spacing each entry at uniform periods 
      of time, such as days, weeks, months or years, the result will be an “activity cycle.”A cyclical pattern, or measurment
      of mass psychology, is 5 waves upward and 3 waves downward, total 8 waves. These patterns have forecasting value. When 5 waves upward have been completed, 3 waves down will follow, and vice versa. 

      There are several degrees of waves. For example, wave 1 shown in the above diagram may be composed of 5 minor waves, and wave 2 of 3 minor waves, all of lesser degree than the larger waves. The phenomenon described functions in every human activity that can be graphed, including stocks, bonds, volume, commodities, production, etc. etc. The above is a simple outline of a demonstrable fact. 

      Any device employed to predict the action of something else is unreliable. Opinion is invariably divided because it is based on different view points. It is humenly impossible for anyone to consolidate and correctily evaluate the effect when mixing war news, economics and politics. 

      Prominent New York newspapers have seriously questioned the value of news as a market guide. News is never responsible for changes in the pattern of the activity cycle. When market action does not fit the news, it is quickly forgotten. Is it not time that you became acquainted with a simple Law of Nature that will guide you in any class 
      of activity? 


      (R.N.Elliott's Market Letters ,1938-1946, p. 171-172)

      [Source: Elliottwave International ]



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      The Wave Principle  is unparalleled in providing an overall perspective on the position of the market most of the time. Most important to individuals, portfolio managers
      and investment corporations is that the Wave Principle often indicates in advance the relative magnitude of the next period of market progress or regress. 
      Living in harmony with those trends can make the difference between success and failure in financial affairs. 

      Despite the fact that many analysts do not treat it as such, the Wave Principle is by all means an objective study, or as Collins put it, "a disciplined form of technical analysis." 
      Bolton used to say that one of the hardest things he had to learn was to believe what he saw. If the analyst does not believe what he sees, he is likely to read into his analysis what he thinks 
      should be there for some other reason. At this point, his count becomes subjective. Subjective analysis is dangerous and destroys the value of any market approach. What the Wave Principle 
      provides is an objective means of assessing the relative probabilities of possible future paths for the market.  At any time, two or more valid wave interpretations are usually acceptable by the
      rules of the Wave Principle. The rules are highly specific and keep the number of valid alternatives to a minimum.  Among the valid alternatives, the analyst will generally regard as preferred the
      interpretation that satisfies the largest number of guidelines, and so on. As a result, competent analysts applying the rules and guidelines of the Wave Principle objectively should usually agree
      on the order of probabilities for various possible outcomes at any particular time. That order can usually be stated with certainty. Let no one assume, however, that certainty about the order of 
      probabilities is the same as certainty about one specific outcome. Under only the rarest of circumstances does the analyst ever know exactly what the market is going to do. 

      One must understand and accept that even an approach that can identify high odds for a fairly specific outcome will be wrong some of the time. Of course, such a result is a far better performance 
      than any other approach to market forecasting provides. Using Elliott, it is often possible to make money even when you are in error. For instance, after a minor low that you erroneously consider 
      of major importance, you may recognize at a higher level that the market is vulnerable again to new lows. A clear-cut three-wave rally following the minor low rather than the necessary five gives
       the signal, since a three-wave rally is the sign of an upward correction. Thus, what happens after the turning point often helps confirm or refute the assumed status of the low or high, well in 
      advance of danger.

      Even if the market allows no such graceful exit, the Wave Principle still offers exceptional value. Most other approaches to market analysis, whether fundamental, technical or cyclical, have no 
      good way of forcing a change of opinion if you are wrong. The Wave Principle, in contrast, provides a built-in objective method for changing your mind. Since Elliott Wave analysis is based upon 
      price patterns, a pattern identified as having been completed is either over or it isn't. If the market changes direction, the analyst has caught the turn. If the market moves beyond what the 
      apparently completed pattern allows, the conclusion is wrong, and any funds at risk can be reclaimed immediately. Investors using the Wave Principle can prepare themselves psychologically 
      for such outcomes through the continual updating of the second best interpretation, sometimes called the "alternate count." 

      Because applying the Wave Principle is an exercise in probability, the ongoing maintenance of alternative wave counts is an essential part of investing with it. In the event that the market violates 
      the expected scenario, the alternate count immediately becomes the investor's new preferred count. If you're thrown by your horse, it's useful to land right atop another. Of course, there are often 
      times when, despite a rigorous analysis, the question may arise as to how a developing move is to be counted, or perhaps classified as to degree. When there is no clearly preferred interpretation, 
      the analyst must wait until the count resolves itself, in other words, to "sweep it under the rug until the air clears," as Bolton suggested. Almost always, subsequent moves will clarify the status of 
      previous waves by revealing their position in the pattern of the next higher degree. When subsequent waves clarify the picture, the probability that a turning point is at hand can suddenly and
      excitingly rise to nearly 100%.

      Renowned financier Bernard Baruch, who was as close to markets as anyone, saw a connection between economic trends and the herding impulse of animals.
      He also understood the crucial importance of that knowledge to a correct social analysis:

      All economic movements, by their very nature, are motivated by crowd psychology. Without due recognition of crowd thinking... our theories of economics leave much 
      to be desired... It has always seemed to me that the periodic madnesses which afflict mankind must reflect some deeply rooted trait in human nature - a trait akin to the 
      force that motivates the migration of birds or the rush of lemmings to the sea.. It is a force wholly impalpable.. yet, knowledge of it is necessary to right judgements 
      on passing events





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Copyright ©  2018. ELLIOTT today. All Rights Reserved.  None of these stocks are buy or sell recommendations. 
There is a high degree of risk in trading. 

The Elliott Wave Principle is a detailed description of how markets behave. The description reveals that mass investor psychology swings from  
pessimism to optimism and back in a natural sequence, creating specific patterns in price movement.Each pattern has implications regarding  the 
position of the market within its overall progression , past, present and future. The purpose of this publication and its associated services is  to 
outline the progress of markets in  terms of the Elliott Wave Principle and to educate interested partiesin the successful application of the Elliott 
Wave Principle. This is probably the most comprehensive trading education on how to project high probability time & price targets based  on
 Elliott Wave pattern structure.