ä
SPECIAL Reports
DJIA, December 15,2007
The Warning !!!
[Details only to subscribers]
Please see our Special Report of October 13,2007 (below)
NASDAQ Composite Index
© ELLIOTT today, October 13 2007
Weekly Update © ELLIOTT today, October 13, 2007
Special Report
NASDAQ Composite Index
© ELLIOTT today, October 13 2007
Figure 1
Elliott Wave Analysis
The chart of the NASDAQ Composite Index displays the advance from October 2002 to October 2007. In time, this is the same distance nearly to the day as the advance in the Dow Jones Industrial Average from August 1982 to August 1987. We all know what happened in October of that year! Crash they called it at the time, but it was the deepest fourth wave correction in the history of the market.
Starting October 7,2002 at 1113,36 Minor wave 1 traveled +408 points. 1.618 times 408 gives 660.14 and when added to the top of wave 1 at 1521.44 the result is 2181.58, only 5.98 points from the high of December 30,2004, which was 2187.57. Fibonacci at its best ! The clear five-wave advance from the low of 1113 produced a classic Elliott impulse, i.e., Intermediate wave (a) of Primary wave [B]. (It is possible, that an even higher degree of Cycle degree is about to end then the five-wave impulse becomes Primary wave [a]).Primary wave [b] traced out a rare "running flat", a 3-3-5 construction, where wave C fails to travel its full distance, falling short of the level at which wave A ended. Apparently in this case, the forces in the direction of the larger trend are so powerfulthat the pattern becomes skewed in this way. At such times, the fundamental or emotional factors seem to overriding normal wave development.
Many times before I said, the market always provides clues when it is about to change direction, and a thorough knowledge of those clues is the goal of every successful market timer. If a turn is recognized, great. If a turn is missed, then the next task is to determine whether the market's action in the new direction suggests a change in the larger trend.
Within the current list of clues in the wave structure, momentum indicators and sentiment measures the NASDAQ Composite is about to top out NOW or has already. It's screaming SELL ! Although some may react as if "wolf" has been cried once too often, multiple "sell" signals from reliable indicators are not an objective defensible reason to ignore them. In fact, the opposite is true. Any market which has continued to rally while producing numerous signs of topping behavior is most likely setting up for a big decline.
Why? The pattern in the NASDAQ Composite index recently traced out what looks like an expanding diagonal triangle for wave 5 of (c) of [B]. According to the textbook description the next move will be a big one, say -800 points at minimum !! In percentage terms, that is a decline of -28%. Call it a CRASH ?! Please notice the nice Elliott parallel channel containing waves (a)-(b) and (c).Elliott's publisher, renowned investment advisor Charles Collins, first realized that The Wave Principle is connected to the Fibonacci sequence, and communicated that fact to Elliott. After researching the subject to the small extent possible at the time, Elliott presented the final unifying conclusion of his theory in 1940, explaining that the progress of waves has the same mathematical base as so many phenomena of life. For an explanation of the Fibonacci sequence and its relationship to market behavior please see Fibonacci Ratio.
Literature: Elliott, R.N.(1938), The Wave Principle
Buchanan, M. (1997, November 8). "One law to rule them all." New Scientist
Douaday, S. and Couder, Y. (1993). "Phyllotaxis as a self-organized growth process."
"Growth patterns in physical sciences and biology."Arneodo, A., el.al.(1993). "Fibonacci sequences in diffusion-limited aggregation."
Sornette, D. (1997, October 15). "Generic mechanisms for hierarchies." InterJournal
Complex Systems, No.127.Many scientists have an aversion to phi, perhaps because mystics have sometimes waxed eloquent over its properties.
In many real-time examples quoted here on this website in which phi has obviously appeared, researchers do not even
mention it.Example:
SPX,10min.,12/22/2004.
The charts displays wave (v) of 5 of the diagonal triangle shown on the daily chart above (count#2). The Fibonacci calculation includes the whole wave subdivisions starting on October 10,2002. Now observe, in percentage terms, a perfect internal wave relationship will be achieved at 1217. On January 3,2005, the SP500 Index topped at 1217.90.Related articles: S&P ChartMap, TracRecord,
January 1973-December 1974
Figure 2
DJIA January 1973 to December 1974: A decline of -45% into the 4-year cycle low.
Although the initial decline formed a five-wave structure for wave (a) and the ensuing
correction in wave (b) traced out an expanding flat.
Nasdaq Composite Index - Another Forecast
© ELLIOTT today, September 23,2006Forecast of June 10, 2006
Figure 3
Elliott Wave Analysis of June 10, 2006:
Let's recall my forecast of last week:
"A 50% Fibonacci retracement still points to 2255 but as you can see on the chart, there is a gap left open slightly above that level right where the ML-2 cuts through prices. there is a high probability that the market will close the gap within the price range of a Fibonacci 0.618 retracement at around 2283 (+/-). The ML-2 points to 2300 (+/-) though even a 0.786 retracement is possible, depending on the time the market needs to complete the current pattern. An alternate count suggests, the market currently trades only in wave (iv) of 1 tracing out a more complex pattern and wave (v) of 1 still to come."
Nasdaq Composite Index - Outcome
Figure 4
The Nasdaq Composite Index reached the area of the gap as forecasted over three months ago.
The Wave Principle of Human Social Behavior
And The New Science of Socionomics
by Robert R.Prechter, 1999
The Science of History and Social Prediction Best-selling author Robert Prechter’s revolutionary two-book set, Socionomics: The Science of History and Social Prediction spells out a historical correlation between patterned shifts in social mood and their most sensitive register, the stock market.It also presents engaging essays -- representing over 20 years worth
of research -- correlating social mood trends to music, sports, corporate culture, peace, war and macroeconomic trends.More about Socionomics
