The Elliott Wave Analysis Thread

[tech/a]

So tech/a... what's the verdict on advGET? Is it a "must have" in your toolbox?

Started an AGET thread for Aget Questions.

Must have. No I dont think so.
It's been and is a handy analysis tool.
It is very powerful but like most I'm sure I under utilize it.

 

[bullbear39]

Started an AGET thread for Aget Questions.

Must have. No I dont think so.
It's been and is a handy analysis tool.
It is very powerful but like most I'm sure I under utilize it.

Thanks for your feedback tech, I'll check out the thread...

 

[Lachlan6]

Here is a continuation from my last post re intra day action. Looks like the SPX is poised for another surge lower after forming what appears to be a triangle wave 4.

 

[OzWaveGuy]

Ho Hum. Is it just me, or does the leg down from Monday to Wednesday look like a 3 wave move? An intervening 'X' wave perhaps? I wouldn't be surprised to see the XAO move further sideways either as a unfolding triangle or a more complex correction (another Double 3? Let's hope not, the odds are remote).

A triangle would be preferred if we must have further sideways action. This would definitely indicate a 3 wave move is unfolding which implies a flat for the larger wave (4). Hence, some sideways for a bit longer, one more down leg (to a double bottom?) and then a reversal back to around 3800.

 

[Rudy]

Ho Hum. Is it just me, or does the leg down from Monday to Wednesday look like a 3 wave move? An intervening 'X' wave perhaps? I wouldn't be surprised to see the XAO move further sideways either as a unfolding triangle or a more complex correction (another Double 3? Let's hope not, the odds are remote).

A triangle would be preferred if we must have further sideways action. This would definitely indicate a 3 wave move is unfolding which implies a flat for the larger wave (4). Hence, some sideways for a bit longer, one more down leg (to a double bottom?) and then a reversal back to around 3800.

Hi OWG,

Earlier this morning I had the feeling that we might be seeing the beginnings of an ending diagonal for the final wave in wave B. At market close I don't see anything to change my mind.

 

[tech/a]

Trying to work out how a corrective move particularly a complex one is going to pan out is just as difficult as picking the next 6 mths Saturday night Lotto numbers.

Frankly constant change and speculation doesnt do the analysis any good in the eyes of those who know little about it.
They see the experts constantly altering their counts and possibilities.
This has them thinking that the analysis is no better than guessing.

Really its a matter of plotting possibilities and allowing the price action to eliminate them. Attempting to trade---what could be (if its not clear) isnt sound practice.

In my not so humble opinion.

 

[OzWaveGuy]

Trying to work out how a corrective move particularly a complex one is going to pan out is just as difficult as picking the next 6 mths Saturday night Lotto numbers.

Some thoughts on the above statement to consider...
Whilst complex corrections can be hard to stay in front of, the advantage is that if you can identify the complex correction early enough, then one will be in a solid position as the breakout occurs.

The recent double 3 in December was a reasonably complex correction that took a month to unfold, but it was so 'text book' it become obvious once it was around 75% complete. From a lotto standpoint - we were given the first 4 numbers, the last two were provided once the breakout occurred.

Some patterns appear more often in certain situations, so the odds turn in your favor by isolating a few patterns up front (eg triangles, ending diagonals). Nothing wrong with using this thread to bounce these ideas (I hadn't actually considered an ending Diagonal, but it's a high possibility for wave C's)

As for the EW trader, shorter term trades will become more prevalent during corrective periods - again still looking for the obvious 5-3 and triangle patterns. All depends on the timeframe your looking at.

In case people missed a key point hidden in this discussion: By the mere fact that the EW count hasn't unfolded as anticipated, then this says to me: exercise caution or bring the stops in closer and be more defensive until clarity is restored.
. So your actually getting an advance warning that things aren't as they seem (yet).

Cheers

OWG

 

[biggles]

Thanks guys for this thread. As a person trying to get my head around EW this thread is so helpful and educational.There are no others like this on the net covering Oz markets
Thanks

 

[OzWaveGuy]

At market close I don't see anything to change my mind.

I should have pointed out in my post yesterday (sorry in a rush) that to assert the market must follow a specific path too early in the process will only result in disaster. There are always several ways a market can unfold when dealing with corrective waves (3 wave moves), and I believe it's too early to confirm what is actually happening on the XAO (although I am considering a couple of possibilities).

Historically, the most accurate calls i've made on corrections (before they have ended) in terms of naming the type, ending points etc is usually when they are 70-80% complete or in the last leg of completion. I'm not sure I can do any better than that. The exception to this is when the EW analysis indicates an impending correction is at hand (eg wave 4) - so you are reasonably certain you know something is about to happen - but not exactly sure what. We do know that triangles frequent in wave 4 positions, so this can become a base assumption until proven correct or incorrect.

Additionally, as the correction nears it's completion, the EW analyst can usually map out the proceeding roadmap with a reasonable level of accuracy. So for example, after a wave 4 triangle you know that the market will continue for a period of time (perhaps a fib ratio of a previous wave) before another correction or a reversal occurs.

There's nothing wrong with identifying a couple of possible wave structures that may unfold in specific positions, but to hold a very strong view too early in the process will usually work against you.

My

 

[OzWaveGuy]

Thanks guys for this thread. As a person trying to get my head around EW this thread is so helpful and educational.There are no others like this on the net covering Oz markets
Thanks

Thanks Biggles. Good to hear your picking up good info from this thread. If you don't mind me asking: Have you purchased any EW books, if so, which one(s).

 

[biggles]

OWG I have 2 ,Dynamic trader and Elliot wave principle by Prechter and Frost.
Slowly getting on top of it all. These complex waves are a challenge though, especially when the book only shows them in a Bull market. Tried scanning the patterns and inverting them in Photoshop but not sure if they are correct. Should be but I think a triangle is allowable only as a final component. Not too clear on this p 52. I will have to read this section yet again

 

[OzWaveGuy]

Some clarity may be unfolding on the recent XAO action.

First Chart from Oct 29th
Take a look at the chart posted back in Oct 08 (this is the larger wave '3', but labeled as 'iii' in this old chart). Note: I'm looking specifically at the down leg from the end of wave 'ii' to the end of wave 'iii' in this first chart. This particular down leg is interesting for a couple of reasons:

• Wave (V) was the extended wave and 200% of wave (III)
• Wave (IV) retraced 61.8% of wave (III)
• Wave (II) was a flat and wave (III) was a zig-zag (so alternation between corrective waves is very evident).

When wave 4's retrace 61.8% of wave 3, this indicates that wave 5 will be the extended wave. Glenn Neely discusses this in the book 'Mastering Elliott Wave' starting page 11-2 - Impulse Patterns (if you have it).

It should be noted that within this extended 5th wave in Oct, there was an extended 5th wave within it too (an extension of an extension - so to speak). Wave '4' circle retraced almost 61.8% implying this additional extension.

2nd Chart - Recent XAO Action
So, Looking at the recent action from the top of wave 'b' circle, there is some similarity to the October action last year. Wave 'iv' has retraced 61.8% of wave 'iii', the wave pattern is still legal (eg no overlaps, wave 3 not the shortest etc).

Wave 'ii' is a flat and wave 'iv' is a zig-zag (so again, alternation between corrective waves is very evident here also).

Hence, it is possible that a strong downside leg is about to unfold for the larger wave 'c' circle leg and is an extended 5th wave. A break below the end of wave '1' circle would confirm this specific wave count. A break higher from here and into the price range of wave 'ii' would invalidate this scenario.

There is still potential for more sideways action or alternative scenarios unfolding (as recently discussed on this thread), although I believe we now have a little more information of what is about to unfold on the XAO.

Cheers

OWG

 

[OzWaveGuy]

I should point out in the above post that the 2nd chart is actually the XJO not the XAO , but both work so closely together that there's not a big difference in the short term wave structures at the moment.

 

[Lachlan6]

It looks like the SPX has now completed 5 waves to the downside. I am now expecting a bounce to occur to take it up to the 790 - 807 area before falling over once again. Amazing how potent MACD divergence is. Take a look at the precursor to the two very important lows on the attcahed chart.

 

[OzWaveGuy]

GOLD

Someone had requested a view of GOLD a couple of weeks ago and I posted this longer term EW view---> https://www.aussiestockforums.com/forums/showpost.php?p=395833&postcount=410

The chart below takes a closer look at the 3 wave corrective action occurring for the larger wave (4). A series of combined zig-zag corrections took gold lower and again a 3 wave move has taken gold higher. So x2 larger 3 wave moves have occurred - this supports either a flat (3-3-5) or a Triangle (3-3-3-3-3) or even an ending diagonal up to wave (5).

At this point I'm counting on a Flat or Triangle to unfold. The 2nd leg of this wave (4) correction could be considered complete (or about to complete). The 1hr chart does show a smaller 5 wave move upwards complete as well for wave 5.

If a flat unfolds, then 5 waves down to complete wave (4) will occur. For a triangle 3 waves down to complete the 'c' leg will occur.

A break above the top could still occur and turn wave (4) into a expanded flat correction (5 waves down for wave c will still need to occur)

 

[OzWaveGuy]

OWG I have 2 ,Dynamic trader and Elliot wave principle by Prechter and Frost.
Slowly getting on top of it all. These complex waves are a challenge though, especially when the book only shows them in a Bull market. Tried scanning the patterns and inverting them in Photoshop but not sure if they are correct. Should be but I think a triangle is allowable only as a final component. Not too clear on this p 52. I will have to read this section yet again

Prechter's EW Principle is a very good starting point for most - was the first EW book I purchased. If scanning in and inverting the patterns helps you then go for it. There's a defined number of patterns, so once you are familiar with them, its a matter of identifying them on a chart as you go.

And yes, re-reading the content is something I have done many times to get my head around a chapter or two

 

[Rudy]

Some clarity may be unfolding on the recent XAO action.


2nd Chart - Recent XAO Action
So, Looking at the recent action from the top of wave 'b' circle, there is some similarity to the October action last year. Wave 'iv' has retraced 61.8% of wave 'iii', the wave pattern is still legal (eg no overlaps, wave 3 not the shortest etc).

Wave 'ii' is a flat and wave 'iv' is a zig-zag (so again, alternation between corrective waves is very evident here also).

Hence, it is possible that a strong downside leg is about to unfold for the larger wave 'c' circle leg and is an extended 5th wave. A break below the end of wave '1' circle would confirm this specific wave count. A break higher from here and into the price range of wave 'ii' would invalidate this scenario.

There is still potential for more sideways action or alternative scenarios unfolding (as recently discussed on this thread), although I believe we now have a little more information of what is about to unfold on the XAO.

Cheers

OWG

Hi OWG,

Have you considered the possibility that in your second chart your wave '1' circle could have been a truncated wave 'v' and hence that wave 'c' circle and the higher cycle wave B may have also completed ?

A large rally would validate that scenario.

Cheers

Rudy

 

[OzWaveGuy]

It's possible, but how many truncated 5ths have you seen in the last 3months? I don't think I've seen one to-date on the XAO - for individual stocks they happen occasionally. Hence, odds are very low.

If a small rally did eventuate then I would assume more sideways action that extends the wave 'b' circle flat correction.

 

[brerwallabi]

I don't usually post here these days but thought I would throw a chart in, I very bearish S&P,DOW and obviously XAO.
I am the opposite on gold and see the current move as the commencement of the 5th and final wave in the current cycle and this current movement as wave 1 in the final leg.
Welcome some views.

 

[biggles]

Has anyone bought the book by Steve Poser "Applying EW theory profitably"
Is it worth buying ?