The Elliott Wave Analysis Thread

[wavepicker]

Hello everyone,

I'm an EW beginner and would like to have the opinion of accomplished EW users (wavepicker, nick, porper, anyone else) on the weekly chart of Euro.

There are 2 things to about that chart:
1) The 2004-2005 move it stands out as a 5 wave move. But looking at the long term trend it is clearly a correction of the bull trend. I have a difficult time accepting any other count since a 5 wave stands out so well. How would you count it?

2) The bull move since 2005 bottom I can't see any clear count, a long series of hh & hl that would be dangerous to fade. Would you count it? If yes, how?

Thanks!

Hello soso, I bought this point up to Nick Radge on this very chart some years ago. At that time I managed to identify this as a correction NOT an impulse.

Why?? Have a look at the daily chart attached. Look at the subdivisions in what most people would have called waves 1 and 5. They break down into 3 wave structures(very clearly at that). Thus I labelled this as an WXY correction not an impulse.

There is nothing hard about this, and you don't have to be an expert to pick this up, it's simple EW pattern recognition. Remebver waves 1,3 and 5 must subdivide into 5's otherwise it's corrective. There is your answer, you just have to study your market well to come to the most objective conclusion possible.

Will answer 2nd question at a later time


Hope this helps

 

[soso]

Have a look at the daily chart attached. Look at the subdivisions in what most people would have called waves 1 and 5. They break down into 3 wave structures(very clearly at that). Thus I labelled this as an WXY correction not an impulse.

Hi wavepicker,

It is very clear now, thank you. It seems that when things are not clear then one needs to go lower to identofy the waves within the waves. Like this was the case. If it is still not clear then better staying out.

 

[soso]

Hello wavepicker and all,

This is the closest I can get to count the last 2-3 years of EURUSD. Any comments especially regarding corrections?

Thanks,
-soso

 

[soso]

I have another version of the count and I think it looks much better.

The main problem with the previous count was the wave II which looked so small in both price and time. Especially in time. This version of counting tries to solve the problem and we get interesting coincedences:
1) Wave III = Wave I * 162%.
2) Time of the ABC correction is exactly 50% of the time of the impulse, or Time WII = Time WI/2.
3) The whole 12345-ABC cycle took exactly 4 squares of 144. Maybe you guys don't use this but I use Gann cycles and I can assure you EURUSD likes 144 day cycles.

So if the correction is irregular - running I think is the name- then it simply means that the trend is very strong to the upside, which is what we got.

Then we are in the Wave IV which from the point of view of time is not done yet.

 

[soso]

All my EW skills come from the old school - Prechter's classic EW. Combined with the simplicity of Miner's style.
I heard there is another school that is based around Glenn Neely teachings. Is it any worth to read his book? I am content around the classic style but I try to keep and open mind to any new idea.

Thanks,
-soso

 

[wavepicker]

Financials have led the broader market down, and they are the key IMO for a termination for this leg of the bear market.
After focusing on ANZ in a post late last year which hinted to a big move down which actually turned out to be a reasonable EW analysis with great R/R ,I am actually looking at the other side of the spectrum now.

Specifically looking at CBA as it has probably the largest weighting of the financials. On the Daily and weekly chart this looks to be a sharp a-b-c ZigZag correction. What has caught my eye is the sideways trend of the last 4 months. Although on the daily chart this is technically an upward zigzag and not sideways structure, on the Weekly it looks the part.

I am looking for a fast "thrust" to the downside to complete this green abc move down. Specifically on the daily chart I am expecting 5 waves down from the top of green wave b to complete green wave c and the bear campaign for this leg. Maroon wave 1 completed yesterday, wave 2 started today probably completed today or tomorrow. Ultimate target is $32-35 by mid August. Appears to be some exhaustion creeping in here in wave 1 which think will be more evident in waves 3 -5


Cheers

 

[OzWaveGuy]

Here you go potato,

I've included EW analysis on both the XMJ and BHP. The XMJ provides a 'clearer' view of the market v's BHP and helps confirm the BHP wave counts.

A point to note: The triangle wave 4 that is currently underway on BHP could be interpreted differently than the XMJ. Hence, I spent more time looking at BHP but because of the significant gaps on my Charting package it was rather hard to determine wave 3 of (3) and wave 4 of (3). A breakout of the triangle to the downside will clear a lot up.

However the XMJ does help clarify BHP to a large extent and I suggest when using EW on BHP, also determine the wave counts on the XMJ as well. If you overlay the XMJ on BHP, they follow extremely closely and the wave counts are almost similar.

 

[potato]

thanx ozwaveguy, il study your count now

 

[salsem]

hello OzW
My views on sp

 

[OzWaveGuy]

Hi EWers

An idea you may want to consider in predicting the future wave structures....

Time is a very important element of EW and probably needs to be included more in EW analysis as a general statement.

The charting package I use has a %R Arc function which is basically a Fibonannci arc with 33%, 38% 50% 61% and 66% lines between 2 points on the chart.

The idea is to use the %R function - not to subdivide two defined points, but to determine:

1) the end of wave 3 or
2) the end of wave 4 or
3) the start/end of the a-b-c correction that follows the wave

Surprisingly there seems to be good correlation when using the %R between wave 1 or 2 and the rest of the wave structure.

Even when wave 3 is extended, taking the start/end points of the first wave 2 of 3 you can still accurately hit the start or end of wave 4 and 5, abc correction.

The key is to simply place the cursor at the start of the wave structure and then ensure the 33% 38% lines hit the start or finish of wave 2. The other side of the %R should hit or be close to the start/end of wave 4,5,abc.

You can use trend lines, fibonnaci, linear regression etc to get a good idea of the rest of the wave structure.

I'm yet to really get into this, but early results seem very acceptable - provided you believe you have 5 waves unfolding, and wave 2 has completed.

 

[wavepicker]

Hi Ozwaveguy,

I mucked around with this stuff (Golden Spiral) about 8 years ago and wrote some code in VB based on instructions in Fischers book "Fibonacci Applications for Traders".

This is an area that still needs to be looked into, but too use this tool consistantly still has been a challenge for many. I came to the conclusion back then it was of limited value and have focused on other areas instead.

Some of the problems I came across were as follows:-

-Origin or Starting point
-Direction of Rotation
-Which Rings of the Spirals are significant

As such too many possibilities and our jobs as traders should be in reducing the possibilities in order to increase the probabilities for successfull trades.

Cheers

Hope you have more success with it.

 

[OzWaveGuy]

hello OzW
My views on sp

Hi salsem,

Looks like a completely reasonable count to me. One suggestion: Your wave 4, if a triangle in your count, then it would probably have ended 4 days later to complete the five legs.

It's also possible that wave 4 ended in 2days @ 1044 points, and what we're seeing now is a complex ending diagonal pattern to finish off wave 5 - so be prepared for that. Ideally I wouldn't like to see that as 2 days seems out of whack with the time taken for wave 2.

Completing wave 5 also brings into play the alternate count that you've labeled as A-B as well. Once wave 5 has completed then either:

1) the market continues to climb, thereby validating the alt count (or into a more complex correction)
2) A correction occurs after wave 5, then the downtrend resumes to compete a very large 5 waves down. The consequences will be enormous as this will have to be the first of two 5 wave legs down.

Cheers

OWG

 

[OzWaveGuy]

thanx ozwaveguy, il study your count now

Potato

BHP/XMJ may have finished the wave 4 triangle on the 10th. 5 small waves down is evident on the XMJ, so watch the next few days to see where the correction goes.

Cheers

OWG

 

[Joe Blow]

Just a note that I have removed the poll that was originally attached to this thread as it no longer seemed to be relevant considering the direction that the thread has taken.

 

[salsem]

Hi.OzW

Whereas some measures''taken''with springs we could stay this counting? ...
the conditional is a must!
ps. I write as an excuse to have Italian ...
elliottien hello.
salsem

 

[OzWaveGuy]

Hi Ozwaveguy,

I mucked around with this stuff (Golden Spiral) about 8 years ago and wrote some code in VB based on instructions in Fischers book "Fibonacci Applications for Traders"....

Right, there's always going to be variance in how the fib arc would end up and what waves are crossed at the start/end.

I'm looking to see if there are any patterns that are specifically time related - for example: if wave 3 is extended, should I do something different v's wave 1 extended or if the C leg is longer than the A leg etc.

What's most interesting is there are dozens of relationships that are evident in a 5-3 structure - I suspect there are dependencies on the amount of sub-divisions and which wave extended etc since this will impact time - hopefully patterns can be found that could accurately plan out a wave count. I'll play with the %R and fib relationships to see if there repeatable patterns. If I find anything more I'll drop a post in here

cheers

OWG

 

[OzWaveGuy]

Hi EWers

The market action since the break of the wave 4 triangle didn't look quite right to me so i took a closer look at the triangle on the XAO and XMJ. The wave structure counts much better with a very small wave e (circle) at the end of the triangle, and wave d (circle) looks much better in proportion to the rest of the triangle waves. Triangle wave e's only have to retrace a minimal amount to qualify.

If correct then, this will better help identify the end of the 5th wave, which may not be too far away now.

 

[OzWaveGuy]

And for the XMJ - wave e (circle) counts as a triangle itself. Wave e triangles are permitted (Glenn Neely) and it's very useful to identify them early on so the wave 5 wave count isn't adversely influenced. I'll still be looking for any signs of alternate counts that may invalidate the current count as i want to get the end of this final leg as accurate as possible.

 

[potato]

BHP

A nice bounce off $20 today. Heres an alternative count to BHP

 

[OzWaveGuy]

BHP

A nice bounce off $20 today. Heres an alternative count to BHP

Right, $20 on the mark huh - Imagine that!

For your chart above, there's a cluster of price activity through October that looks like a reasonable wave size - you haven't accounted for it?