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Examples

Elliott Wave analysis: On August 13,2005 Elltoday had this to say regarding the Nasdaq Composite: 
" The stock market is technically in its weakest condition since the first quarter of 2005. The wave pattern indicates termination of the rally, cycles have topped and momentum measures reveal glaring thinnes, divergence and non-confirmation. Sentiment indicators reflect a bullish euphoria among traders. EW analysis of the Nasdaq Composite Index came to pass. The market turned down after reaching the upper boundary line drawn above the previous highs as forecasted many times before. ML-1 points to prices below 2000 and we will see how the waves unfold." 

The Wave Principe shouted a warning in late July 2005. The powerfully bearish combination of an ongoing diagonal triangle in the Nasdaq Composite Index, high flying internet stocks like Google and Yahoo hadn't been seen since 1999. Following that peak, the Nasdaq Composite fell in wave (ii) some 50% in two months. The bearish potential at the high of August 2005 was further recognized at the time because the rally fulfilled observations with resprect to the Mid Line Technique, which states, "prices will reach the latest ML" and "when prices reverse before reaching the ML, leaving a space, they will move more in the opposite direction than when prices were rising toward the ML." A look at the chart reveals, that this is exactly what happened: prices stopped near ML-2 and moved in the opposite direction. 

Needless to say, wave (ii) held above 2000 and more important well above the ML-3. Late October 2005 started the near vertical upswing in wave (iii) with a gap on the chart in wave iii of (iii), a typical occurrence. As can be clearly seen on the chart, in November prices reached the rising ML-4 and touched that line three times, before falling slightly below 2200. The last "gasp" rally completed a five-wave advance and marked wave (iii) on the chart. Again, prices reached exactly the ML-4 before turning down. Wave (iv) traced out a simple a-b-c
zigzag correction satisfying the rule of alternation with wave (ii) which traced out a more complex correction, a double zigzag. As I see it, the market entered wave (v) of c of (y) which should exceed the top of wave (iii) by a substantial margin. Since wave (iii) is not allowed to be the smallest wave in a five-wave sequence, wave (v) must be shorter than wave (iii). A possible (reasonable) target would be a 33% retracement of the decline from 2000 to 2002, which in this case would be 2437. 

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NASDAQ Composite

Fibonacci Everywhere
© ELLIOTT today, November 2007

 

 

"A strong close today is going to be suggestive of a strong year," said ....(msn)  

 

As you can see on the chart, the NASDAQ Composite 
stands there where it was in February 2007 !!

[Details only to subscribers !!!]  (Carl H.Lachmann)

 

Presumed Mechanical Determinants of Market Movements

A variant of the approach that assumes society is a machine is the idea that the stock market is a
machine. If it is running properly, the implied idea seems to go, then prices rise. If prices fall, the machine
is broken. The trick, then, is to identify the weak cogs every now and then and fix them. The crash of 1987
was such a storm of mass emotion that it caused "market as machine" theorists to work overtime explaining
the drop and figuring out how to "fix" the system. The theory that gained the most credence was that the 
crash was caused by so-called portfolio insurance computer programs, which in essence sold stocks as
the market went lower. This process presumably fed upon itself. Unfortunately for the theory, it does not 
explain very well why markets around the world crashed simultaneously or why the decline stopped.
it is an utter loss to explain why many indexes around the world that had no computer trading fell further
than the DJIA. (The Wave Principle of Human Social Behavior, 1999, Robert R.Prechter) 

Please see 

Weekly Update © ELLIOTT today, October 13, 2007 

Special Report, NASDAQ Composite Index, © ELLIOTT today, October  13 2007

 

The Alltime-High

NASDAQ Composite 

© ELLIOTT today
  July 2000

A classic 61.8 % Fibonacci Retracement

 

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NASDAQ Composite
Long Term
 (c) ELLIOTT today, January 14, 2006  

 

A Wall of Worry?

"MoreRally on!"

"For the first time since June 7, 2001, the Dow Jones Industrial Average closed above 11,000." 

"Techs power the market to new gains." 

"The strength is real. The Nasdaq index has risen for seven straight days."

"A strong close today is going to be suggestive of a strong year," said ....(msn)

Back in October 2004, shortly after the low of wave (x), ELLtoday noted "the entire structure formed by the market looks like a "Leading Expanding Wedge." Like leading diagonal triangles (Type 2), this pattern is bullish. The structure of this formation does fit the spirit of the Wave Principle in that the five-wave subdivisions in the direction of the larger trend communicate a continuation message as opposed to the "termination" implication of the three-wave subdivisions in the standard diagonal triangle. Leading diagonal triangles occur in wave A or 1, meaning after a correction, the market should resume its uptrend, at least for the time being." 

From the low of wave (x) the market's strong rally in the second half of 2004 ended with the top of January 4, 2005, labeled wave a. The ensuing correction is best counted as an a-b 1-2-3-4-5/c pattern completing wave b. Wave c formed an overlapping structure typically of an ending diagonal triangle for wave c. Diagonal triangles are phenomena which are found at the termination points of larger patterns, indicating exhaustion of the larger movement. Diagonal triangles take a wedge shape within two converging lines, with each subwave, including the impulse waves, subdividing into threes. A rising wedge is bearish and is usually followed by a sharp decline retracing at least back to the level where the diagonal triangle began.(EWP , p.31) The near term picture at least calls for a decline into the 2000s in the first quarter of 2006. 

NASDAQ Composite

Forecast of May 29, 2005

 

 

On July 5,2005, ELLtoday came to this conclusion on the picture regarding the NASD Composite:

”On April 29,2005 the market touched the 2x1 support line and  immediately shot up 
in an Elliott five-wave  advance to 2100 completing wave (a). The recent  action looks corrective in nature but I doubt it will be all of wave (b). A more complex correction  may take the NASD eventually back to near the 2000 level completing wave (b) and then a powerfull rally in wave (c) of 5 will carry the index to new post 2003 highs.”

The Nasdaq Comp at that time traced out an expanded flat for wave c and “shot up in a powerfull rally in wave (c ) of 5”, as forecasted. One more leg up is needed to complete a five-wave structure. The internal wave structure supports the outlook for an ending diagonal triangle for wave C. EWP, p.31: “Diagonal triangle take wedge shape within two converging lines, with each subwave, including the impulse waves, subdividing into a ‘three’. A rising wedge is bearish and is usually followed by a sharp decline retracing at least back to the level where the diagonal triangle began.” 

The chart displays the labeling almost unchanged from July 5,2005. Sentiment is extremely “confident” as the bullish percentage jumped to 53% over the last weekend, the highest bullish figure since 1999. (Source:The Lowrisk.com) As a contrarian, high bullish percentage reading spell trouble ahead. Diagonal triangles are moderately rare phenomena, occurring a bit less often than corrective horizontal triangles which develop in fourth wave positions of impulse waves and “B” wave positions in corrective waves. Occasionally diagonal triangles ends with a spike of relatively high volume on the final day or hour. 
As a guideline, whether it comes out is another question, a 0.786 multiple of wave 3 points to 2235, slightly above the upper trendline.  

 

NASDAQ Composite
© ELLIOTT today,October 10,2004 

Leading Wedge?

The entire structure formed by the market looks like a "Leading Expanding Wedge." Like leading diagonal triangles (Type 2), this pattern is bullish. The structure of this formation does fit the spirit of the Wave Principle n that the five-wave subdivisions in the direction of the larger trend communicate a continuation message as opposed to the "termination" implication of the three-wave subdivisions in the standard diagonal triangle. Leading diagonal triangles occur in wave A or 1, meaning after
a correction, the market should resume its uptrend, at least for the time being. 

This chart  contains information that we reserve for subscribers.So please understand, that the whole Elliott Wave count cannot be displayed. None of these stocks are buy or sell recommendations. There is a high degree of risk in trading.  >>>INFO

NASDAQ Composite
© ELLIOTT today,October 10,2004 

Nasdaq Comp.,10/10/04. The August 22 forecast called for the Nasdaq Composite's next move: "A pullback to the broken ML [yellow line] is possible since the 2000 level marks a .618 Fibonacci retracement of the whole structure from top to bottom." On October 6,2004 the Nasdaq made an intraday high of 1971,04 and turned down. TimeZone did a pretty good job as October 6 is 53 calender days from the August low, the same length in time as March 24 to May 17 and 0.618 times the distance from May to August. Amazingly the same Fibonacci relationship occurred from the April high [69 days] to the most recent high on October 6,2004, since 69 x 2.618 gives 180 [85+96=181 (+/-1)]. 

This chart  contains information that we reserve for subscribers.So please understand, that the whole Elliott Wave count cannot be displayed. None of these stocks are buy or sell recommendations. There is a high degree of risk in trading.  >>>INFO

NASDAQ Composite 
© ELLIOTT today,September 10,2004 

"Watching the ML's"

 

NASDAQ Composite, 9/10/2004.

So far in 2004, ELLIOTT today anticipated the January peak, the April peak, the June peak and the May low to the hour. Last month's forecast called for a "pullback to the broken ML [yellow line]" based on sound reason "since the 2000 level marks a .618 Fibonacci retracement of the whole structure from top to bottom." We added: "A failure to reach that point would favor the prefered count." That forecast still stands as the wave structure looks incomplete. The short term labeling displayed in the last two issues which would best allow for a move to the next resistance line [1900-1950] is shown above. The alternate count [count#2] shown on August 22,2004 labels the entire correction from January to  August as a double three with wave x forming a flat from the late March low to the high in June. Either way, the upper channel line of ML-1 points slightly to below 1900 and ML-2 points to 1930-1950 depending on the time frame. A 50% retracement of the entire decline this year lies at 1952.

 

 

NASDAQ Composite
© ELLIOTT today,August 22,2004 

A Look At The Longer Term Chart 

NASDAQ Composite, 8/22/2004. 
In the past few weeks, there has been a lot of focus on weak techs, surging oil prices and terrorism. The NASDAQ broke the trendline which connected the previous lows by a margin and bottomed (for the time being) five points above a .382 Fibonacci retracement level measured from low to top. Another important occurrence was the gap left on 1809 which marks another .382 Fibonacci retracement level [1253-2154]. 

Both corrections (!?) display Fibonacci harmonics [.618]. Uncertainty remains high since the wave count allows several different labeling. The weak point in the prefered count remains in fact the question regarding wave 2. Is it a five or a three? The weak point in the second best count remains wheather the recent decline is a five or a three? So what? As I see it, the decision points are the recent low, to be sure, and the form
of the current upswing. A pullback to the broken ML [yellow line] is possible since the 2000 level marks a .618 Fibonacci retracement of the whole structure from top to bottom. A failure to reach that point would favor the prefered count. 

 

NASDAQ Composite
© ELLIOTT today,August 19,2004 

Update August 19,2004

NASDAQ Composite,8/19/2004.

The total net decline [2154-1750] is -404 points or 18.75% YTD. 404 points is .625 of the first decline labeled Minor wave 1 or a. The high on June 30 is exactly .618 of Minor wave 1 or b: 257 x .618 = 158,82. 1897 + 158,82 = 2055,82. Of great interest is the internal breakdown of the decline from June 30: Minute wave (i) lost -185 points and a Fibonacci .618 retracement of that decline would call for a target of 1984 which is right on track with ML-3. On the other hand, if wave c of (ii) travels 2.618 of wave a the next reasonable target would be 1873 slightly below Minor wave 1 of 1897. The most bearish count labels the whole decline from June 30,2004 as Minute wave (i) and the recent correction as Minute wave (ii). Here too, ML-3 provides resistance, as a .618 retracement of Minor wave (i) points to 1938. 

Examples

Forecast of May 28 !

NASDAQ Composite, 5/28/2004
© ELLIOTT today,May 28,2004 

 

NASDAQ Composite, May 28,2004. Recall the chart of May 16,2004. The announced area has been reached. 2043 marks the Fibonacci .62 level of 2153-1865. ML-2 [blue line] points to 2050. Next week the NASD may stage a last gasp rally and thereafter the market should loose ground. 

 

ELLIOTT today on March 26,2004: 

Nasdaq Composite, March 26,2004. "Short Term Bottom..." The Nasdaq Composite reached the area of the previous fourth wave of one lesser  degree, which in this case is Intermediate wave (4). On January 30, ELLIOTT today, announced that level, noting "the primary-degree-trendline now comes in at 2000 and real support is 1880-1900, the area of Intermediate wave (4). If You will recall, that forecast still was two months ago and as You can see, the Nasdaq met this level almost to the minute!

 

NASDAQ Composite 

(c) ELLIOTT today, January 3,2004

 

 

chart: tradesignal.com

NASDAQ Composite, January 3,2004: The NASDAQ C. so far is essentially +100 points above 
the high of September 2003 and almost near important resistance: Our last issue to subscribers pointed 
out "Wave (c) now in progress, would be expected to carry the Nasdaq C. to near 2098 resistance." 

The chart of October 19,2003, as you can see, "got the picture." Wave (c) has now reached [percentage] Fibonacci proportion to wave (a): Wave (a): 1108-1521 = +413 points or 37,27%. Wave (b): 1253-2022= +769 points or 61,73%. The ratio - guess what ? - is .603 [37,27:61,73]. Now look at the chart of December 13,2003 below: The upper trendline pointed exactly to yesterday's high at 2022.  

These developments are remarkable enough, but there is more: Wave (i) gained +13,32% and wave (v) traveled +13,85%. Wave (iii) traveled +566 points [1320-1886] or 42,87%, which is 3.236 times the length
of wave (i) and/or wave (v). The sum of the percentage gains of wave (i) and wave (v) are 26,87% and 
that number is .626 of the length of wave (iii), which is 42,87% [26,87:42,87=.626].

The mathematical Fibonacci relationships achieved by the market is satisfying the "rule of equality", in an unorthodox manner. This "rule" is Elliott's observation that when a third wave is extended, the first and fifth waves "tend toward equality in time and magnitude" [text p.57]. With regard to time, the "rule" is NOT fulfilled. 

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The material is ONLY PROVIDED FOR EDUCATIONAL PURPOSES AND PAPER TRADING.The recommendations are for paper trading to develop your skills for real time trading. If you can make profits in paper trading, and wish to trade real time with real money and need assistance, then seek help from a qualified financial advisor. THIS IS NOT FINANCIAL ADVICE.

The material does not recommend or otherwise imply that any trading position be taken, which is,and only can be initiating trader's decision and responsibility. I am not a registered financial advisor - and cannot give such advice.

The charts, forecasts, and information are for educational purposes to demonstrate the predictive success of this type of market analysis. As such, it is primarily a teaching tool. Any signals given to buy or sell are for demonstration of the method and are NOT trading instructions or any sort. If you do not agree to these terms then do not accept and cancel this instruction tool. The author does not take any on responsibility for your trading success or failure. Payment of fees acknowledges that you have accepted and understand these terms. This information is not available free. If you have obtained this without payment, you have an illegal copy and are an illegal user. The information on this report is copyright. 

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