Elliott Waves In Motion

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02/12/16

 

The Concept

When investors first discover the Wave Principle, they're often most impressed by its ability to predict 
where a market will head next. And it is impressive. But its real power doesn't end there. The Wave Principle 
also gives you a method for identifying at what points a market is most likely to turn. And that, in turn, gives 
you guidance as to where you migth enter and exit positions for the highest 
probability of success.

Step 1: At its most basic level, wave analysis is simply the identification of patterns in market prices. 
The idea that market prices are patterned was intensely controversial just a few years ago. But no longer. 

Recent discoveries have confirmed that patterns exist in many natural systems - even systems that 
previously appeared to be random. Examples include the weather, botany, geography and even human
physiology. Generally, these systems unfold in patterns of "punctuated growth" - that is, periods of 
alternating rowth and non-growth, or even decline. The patterns then build on themselves to form similar 
designs at a larger size, then the next size up, and so on. 

This emerging science is called "fractal geometry."  It is one of the most exciting branches of Chaos Theory. 
And it is precisely the model identified by R.N.Elliott some 60years ago in the financial markets. 

 

 

 

 

 

 

 

 

 

 

 

The Elliott Wave Principle

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, reating 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 parties in the successful 
application of the Elliott Wave Principle. This is probably the most comprehensive trading education on how to project high probability time and price targets based on Elliott Wave pattern 
structure.Under the Wave Principle, every market decision is both produced by meaningful information and produces meaningful information. Each transaction, while at once an effect, enters
the fabric of the market and, by communicating transactional data to investors, joins the chain of causes of others' behavior. This feedback loop is governed by man's social nature, and since 
he has such a nature, the process generates forms. 

As the forms are repetitive, they have predictive value. Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people 
assume are causal conditions. The reason is that the market has a law of its own. It is not propelled by the linear causality to which one becomes accustomed in the everyday experiences 
of life. Nor is the market the cyclically rhythmic machine that some declare it to be. Nevertheless, its movement reflects a structured formal progression. That progression unfolds in waves. 
Waves are patterns of directional movement. More specifically, a wave is any one of the patterns that naturally occur under the Wave Principle. 

 

 

ElliottWavePrinciple

 

 

 

 

 

 

 

The Basic Pattern

 

 

Source: Elliottwave International

 


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%.

 

 

 

riding the waves with confidence

SPtradingDESKDJIA
DAXEURUSD
 
 

 

EURUSD

The Value of Forecasting with the Wave Principle

 

/ Forecast of February 02,2016


 

chart: Barchart.com

Copyright © 2016 ELLIOTT today. All Rights Reserved.  None of these stocks are buy or sell recommendations. 
There is a high degree of risk in trading. CLICK HERE FOR FULL RISK DISCLOSURE.

Elliott Wave Analysis [ 120min.Chart 1.09173] >>>


 

 

 

 

 

 

Elliott Wave Analysis - Update

I EURUSD                       Forecast of Feb 02,2016

I S&P 500                        Elliott Waves...  

I DAX                               (Rebound...)      

I Gold                              Forecast of December    

I DJIA                             Timing The Rebound (2)   

I Nikkey Index               Hit Hard..!   

I EURJPY                       Turning Point....   

                      

         

 

 

 

In the 1930s, Ralph Nelson Elliott, a corporate accountant by profession, studied price movements in the 
financial markets and observed that certain patterns repeat themselves. He offered evidence of his discovery 
by making a number of accurate stock market forecasts. What appears random and unrelated,  Elliott said, 
is actually tracing out a recognizable pattern once you learn what to look for.  Elliott called his discovery 
"The Wave Principle," and its implications were huge. He had identified the common link that drives the
trends in human affairs, from financial markets to fashion, from politics to popular culture.

Robert Prechter, Jr., president of Elliott Wave International, resurrected the Wave Principle from near 
obscurity in 1976 when he located copies of R.N. Elliott's books in the New York Public Library. 
Robert Prechter, Jr. and A.J. Frost published Elliott Wave Principle in 1978.  

The book received enthusiastic reviews and became a Wall Street bestseller. In the late 1970s, gloom was 
pervasive, but in Elliott Wave Principle, Prechter and Frost called for a roaring bull market akin to that of the
1920s, to be followed by a record bear market. As the stock market rose, knowledge of the Wave Principle 
among private and professional investors grew dramatically.

 

 

Socionomics



The Wave Principle of Human Social Behavior
And The New Science of Socionomics 

by Robert R. Prechter Jr., 1990

 

Herding >>>

Scandals >>>

Social Visioning >>>

Sudden Wave of Violence >>>

Woman Gain Dominance In Bear Markets >>>

Cultural Trends >>>

Financial Man >>>

Die Wissenschaft >>>

 


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

 

 

 

 

 


 

 

 

[ Home ] SPTD2016 ] DAX ] Dow ] EURUSD ] EWP ] Socionomics ] Elliottwave Intl. ] Disclaimer ] Info ]

Copyright ©  2016. ELLIOTT today. All Rights Reserved.  None of these stocks are buy or sell recommendations. 
There is a high degree of risk in trading. 
CLICK HERE FOR FULL RISK DISCLOSURE.

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.