Elliott Wave and the XAO

[gartley]

Porper. I enjoyed it as well, even the time thereafter I enjoyed in it's application. However in this learning process I only found 2 or 3 EW patterns that could be used consistently. The hardest to find was the 3rd wave, because just as you thought a 3rd wave was about to start or even continue in the direction of the trend by counting something else would happen. Only on rare occasions I was able to find the 3rd wave early.
Once you realize it's a 3rd wave nearly every other trader does too or at least that it's a descent move and then everybody jumps in.

I didn't start hitting my stride until I left EWI because I started trading "what I saw" instead of following the advice of Prechter and others there. The reason for this because I started looking at the market with an open mind and did not think in terms of the EWP only. I developed my own cycles approach and I find trades every single day off 1 hr, 4hr and 8Hr charts.
With EW need to wait until specific counts or patterns set up and some times these can be few and far between, but ofcourse I still lookout for them.
To be honest I find more trades using harmonic patterns like Gartleys etc than EW patterns. I try and keep it simple with these harmonic patterns, firstly they must be symmetrical and as close as textbook as possible. I don't like them skewed, I keep away from those. I know a lot of other traders that trade anything closely resembling these harmonic patterns but they are only correct 20-30% of the time wheareas filtering and only talking the best looking setups will give on much better strike rate.

 

[gartley]

By the way here is a critique by this chap of some of EWI's calls post the 2009 low. Interesting thoughts in his "intelectual Hubris" in the last paragraph))))))

http://www.thebullbear.com/profiles/blogs/the-ewi-argument-a-critical-1

 

[rimtas]

By the way here is a critique by this chap of some of EWI's calls post the 2009 low. Interesting thoughts in his "intelectual Hubris" in the last paragraph))))))

http://www.thebullbear.com/profiles/blogs/the-ewi-argument-a-critical-1

at the end I found this one more related to reality-in order to look clean, you must throw shi.t on others(just like gartley does):

"Need some help staying on the right side of the markets? Join the BullBear Trading room at TheBullBear.com."

says everything, one more newslewtter selling crab like all others.

 

[Porper]

By the way here is a critique by this chap of some of EWI's calls post the 2009 low. Interesting thoughts in his "intelectual Hubris" in the last paragraph))))))

http://www.thebullbear.com/profiles/blogs/the-ewi-argument-a-critical-1

gartley,I have seen a similar critique but can't quite remember where now. I was actually a member in 2009 I think it was when Prechter was firm in suggesting subscribers going "200% short". That was enough for me and I stopped reading after that. It was blatantly obvious their wave count was incorrect. Thing is they can't ever admit they are wrong so change the wave count to suit. A shame as I had a lot of respect for Prechter bringing E.W back to life.

I especially find this part very telling from: http://www.thebullbear.com/profiles/blogs/the-ewi-argument-a-critical-1

"CONCLUSIONS

Here I will try to examine just a few of the problems of trading methodology which have contributed to the disastrous performance of EWI during the period under review.

TRADING DISCIPLINE AND STOP LOSSES: EWI appears to exercise an astounding lack of trading discipline. At no point does EWI instruct its followers on stops, stop levels or alternate scenarios which would call its bearish assumptions into question. This defies the most basic, elementary, generally accepted rules of trading and risk management. EWI assumes that it will eventually be correct due to an infallible "analysis" and that all will eventually be made right and whole when "The Big One" hits the markets. This is quite simply the mentality of the amateur speculator."

Spot on i.m.o.

 

[rimtas]

At no point does EWI instruct its followers on stops, stop levels or alternate scenarios which would call its bearish assumptions into question.
Spot on i.m.o.

This is rubbish. All calls were covered with stops, alternate scenarios explained. Just one example:





I just wonder how this article got in the web and the author didn't get a lawsuit. Probably he will get soon one from EWI for misleading information and slander. I don't know how far EWI can go, but they definately have more recources than that bulbear.com and if they wanted probably that guy can be crushed.

I do not say anything about "wrong" calls from Prechter, but appears that this article was based only on the fact that no stops were used, to be rough, which is not true. Every call was tracked and Precheter recommended what to do next through Interim report issues. Ussualy he recommended to cover shorts with a few percent loss.

All Prechter calls from 2009-2015 combined, if executed to his plan would have ended with 210 SPX points loss. And also time frame for study was chosen carefully-author of bullbear.com avoided 2007-09 on purpose, as during that time all Prechter calls gained subscribers +900 points. So I would say it was one sided kick to EWI gates providing his own misleading interpretation of Prechter calls in order to gain more subscribers to his own service.

 

[rimtas]

Just to break this nonsense about Precter and how Porper or Gartley are better, nicer, taller and smarter, I am moving on to another topic.


After almost a year of never ending recomendation to buy BHP, Folish indicator just turned bearish on the entire mining sector. They say in today's newsletter , quote:

"real gamble",

"The reality is that mining is a highly risky and capital intensive business. As such, it’s usually only shareholders’ wealth that gets mined!"

"The same can be said of playing the pokies".

 

[Joe Blow]

Gents, I must insist that the personal attacks and insults in this thread end now. This thread has been very informative and educational up until this point. It is a shame that it has come to this.

Now, if we could please get back to the topic at hand: Elliott Wave and the XAO.

Thank you all for your co-operation.

 

[Porper]

Textbooks will tell us that a triangle will normally break in the direction of the prior trend. All things being equal this is usually the case. But, we have to take other patterns into consideration...plus a lot of consolidation patterns over the past 2 months have proven to be reversal setups.

Massive volume occurred on the 25th of August low as price rejected from a zone of support. Notice the following retest was accompanied by declining volume...lack of sellers. I have also put some time projections on this chart suggesting an interim low is in. A bounce up towards 5450 - 5570 should follow. Of course the Fed this week could change the short term picture. News events shouldn't change the long term patterns though.

 

[rimtas]

Textbooks will tell us that a triangle .

You are delusional if you see a Triangle here. You are just like Prechter-he bited the bearish bullet and never let go, and you are biting the bullish bullet. Not much difference between you too, lol. As far as I can see by reading EWP you understood just one sentence from it -"Trend is always up". Good luck with that. Prechter ended up shorting the advance, you do the same in decline-trying to pinpoint a bottom.
Those elliotwave pupils just can't take the market per se, always see something which is non existent.

And by the way, you just changed your count. You laughed at me when I did this months ago, but inevitably market forces you to do the same. Just you are too late, so much of a practical EW application...

 

[rimtas]

This thread has been very informative and educational up until this point.

It is been very informative and educational not up until this point, but until the point when Porper started to sneak his head up there and spread a disease, having nothing to say by himself.

 

[cynic]

I've been enjoying the varied perspectives on this style of analysis greatly, and whilst my darker side has been indulged by some of the other things that have been happening, I'd hate to see anyone needlessly and recklessly jeopardizing the possibility of their continued participation, particularly when such passion and enthusiasm exists.

 

[rimtas]

Well, as Porper covered a long side, I will cover short. To fill the gaps, so to say. When he say something about short, I will contrary him with longs.


This is the only instrument that one should hold(and accumulate) long right now. Who likes more adrenalin there is another similar under symbol BBOZ.
Foolish indicator just launched "A Million dollar portfolio", so this extreme bullishness indicates that Primary Degree Point of Recognition lies directly within the months ahead. Soon we all witness moves that will make a history. Be short, and be safe. The "dividend investing" dream is coming to an end.

Disclaimer: Only experienced speculators should take short positions of any kind. If you are not experienced enough, cash is the king. Stay away from stocks, realestate and bonds. If you don't have what to sell, sell your mama's necklace.

 

[rimtas]

with BHP everything is quite simple-it just follows oil.

 

[rimtas]

Same story with NY and London listed BHP.
London's has clear five from the bottom.
NY has a bearish fractal, which I think will fail. Failed bearish fractals are extremely bullish. All it needs is the rise of 0,5% to confirm.

 

[Porper]

Textbooks will tell us that a triangle will normally break in the direction of the prior trend. All things being equal this is usually the case. But, we have to take other patterns into consideration...plus a lot of consolidation patterns over the past 2 months have proven to be reversal setups.

Massive volume occurred on the 25th of August low as price rejected from a zone of support. Notice the following retest was accompanied by declining volume...lack of sellers. I have also put some time projections on this chart suggesting an interim low is in. A bounce up towards 5450 - 5570 should follow. Of course the Fed this week could change the short term picture. News events shouldn't change the long term patterns though.

Getting towards crunch time now. Not only in regard to the Fed's decision tomorrow but also the patterns...which are more important. If the triangle triggers a leg higher the target has a good chance of being achieved as a minimum. That's the good news.

The bearish trigger is the 25th of August low. Close beneath that level (4936) and a substantial sell off is increasingly likely. 4600 area from an Elliott perspective probable which sits just above the 50/61.8% retracement zone at 4524-4186. Exciting few days ahead. Great for the day traders.

 

[gartley]

Getting towards crunch time now.

Hello Porper.

Yes finally it looks like major world indices will finally break out one way or the other. Interestingly about triangles. As you mentioned generally the breakout is in the direction of the one larger trend. Such as ofcourse a wave 5 thrust from a wave 4 triangle or a wave c thrust from a b wave triangle.

In some cases it doesn't always work that way. For instance looking at the pattern of trend the last few weeks most Ellioticians would assume we are in a wave 4 triangle now. But there is also an alternate, and that is that we had a wave a of 4 up a triangle b and now a thrust up to c. This is what needs to be clarified and unfortunately EW alone can't do until after it's already happened.
That's why we need to look to other means to give us clues.

Personally I think the break will be to the upside (and current pattern of trend suggests this as it's already happening) and in the XAO banter thread I have posted some cycles charts the support this stance.

Having said that because we have a triangle in play the move will be a "thrust" can happen quite quickly. After the move is finsihed will be more interesting IMO

 

[Porper]

For instance looking at the pattern of trend the last few weeks most Ellioticians would assume we are in a wave 4 triangle now. But there is also an alternate, and that is that we had a wave a of 4 up a triangle b and now a thrust up to c. This is what needs to be clarified and unfortunately EW alone can't do until after it's already happened.

Yes, from an Elliott stance we should be in a wave-4 triangle with a big leg down to come...perhaps this will be the way forward. However we can't ignore the strong demand that transpired in late August. Plus the fact that conventional triangles can be reversal patterns although most believe this to be an untruth.

We use different time cycle analysis gartley but interesting that both techniques have been pointing to an upward move. I have better time cycles on the banks, but if they rally so will the XAO.

 

[gartley]

Yes, from an Elliott stance we should be in a wave-4 triangle with a big leg down to come...perhaps this will be the way forward. However we can't ignore the strong demand that transpired in late August. Plus the fact that conventional triangles can be reversal patterns although most believe this to be an untruth.

We use different time cycle analysis gartley but interesting that both techniques have been pointing to an upward move. I have better time cycles on the banks, but if they rally so will the XAO.

I am glad I moved into the banks last week

 

[notting]

I am glad I moved into the banks last week

Well, as long as it wasn't out of resources.

 

[rimtas]

I am glad I moved into the banks last week

Wait 1 more day, and then say are you glad or not. W4 triangle that you and porper sees is non existent-many other stocks, real estate, us indices finished another second wave and the crash is underway. XAO futures pinpoints nicely the short term 1-2,1-2 subdivisions, hiding a triangle as a cover for those who will be waiting a rebound later when 4700, 4600 or whatever levels are reached. Remainds me about Prechter just in reverse now...you are so bullish, that you can't accept the idea that a normal wave structures that fits in standard deviation scale are just gone.
In a crash like this market will be in an oversold position until the bottom somewhere below 3000 is reached, most likely next year. There will be no any relief rallies biger than those you already saw that will make market overbought even short term.