Elliott Wave Theory

Is the Elliott Wave an accurate measure of market psychology?

  • yes

    Votes: 22 35.5%

  • no

    Votes: 40 64.5%
  • Total voters
    62
  • Poll closed .
Very interesting.
I also use a momentum indicator to confirm the wave count.
It's a simple rate of change measuring the market over a period of time.
In my case, wave 4 is always more oversold than wave 2. And, this momentum indicator actually unfolds in 5 wave sequences during a bull markets and 3 wave sequences during a bear.
 
Quote from gharghur2:

Very interesting.
I also use a momentum indicator to confirm the wave count.
It's a simple rate of change measuring the market over a period of time.
In my case, wave 4 is always more oversold than wave 2. And, this momentum indicator actually unfolds in 5 wave sequences during a bull markets and 3 wave sequences during a bear.
More...

I start my count as +3 , -3 when I get the momentum breakout. Do you actually count waves 1,2 or do you look for the last divergence before three and fill in wave 2 and 1 ? Also do you use a zig -zag indicator and measure the length of the legs.
 
If I am just starting the count; i.e. the end of a major correction or a bear market, I wait for a major oversold condition, and look for divergences. If there are no divergences I start the count from the lows, both on the oscillator and the wave.

As wave 1 progresses, the market will get overbought; i.e. +8 - 10% coming out of a correction, or +15 - 20 % coming out of a bear market. The momentum is usually the strongest in the third wave of an impulse wave. Then, momentum starts to decline before the end of wave 1 arrives.

Next, momentum will cross zero and reach some level of being oversold; i.e. wave 2's about -5%, wave 4's closer to 10%. As this is occurring I watch the action in the index to see what form it is taking; i.e. zigzag, flat, double three, triangle. Need to apply the rule of alternation always.

I use several rules on the oscillator: the range has to be 8% (hi-low) to count, and on downturns it has to reach close to zero. The overbought levels are only important in bull market kickoffs. A few times in 1986 - 1987 and the 1990's, the markets were so strong that the oscillator would only reach +1%, But it was still sufficient to fit within the character of a corrective wave.

Hope this helps!
 
Quote from killATwill:

what Prechter and Frost aren't telling you is that R.N. Elliot died a penniless, AIDS-stricken, child molester.
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KillATwit:

I hope your other contributions to ET are a bit more factual.

FYI:

Elliott died Jan. 15, 1948. The cause of death was listed as chronic myocarditis, a persistent inflammation of the heart muscle.

I don't think we even knew about AIDS until the late 70's.
 
How are you handling back adjusted contracts if you are looking at percent change level. Also how do you classify divergence. Are you looking for true divergences only or do you look at angle divergence. What I mean by angle divergence is the momentum indicator will make a marginal new high or stay flat while prices make new highs. We don't have momentum make lower highs.

In addition how mechancial your counting method.
 
Quote from Whimsy:

KillATwit:

I hope your other contributions to ET are a bit more factual.

FYI:

Elliott died Jan. 15, 1948. The cause of death was listed as chronic myocarditis, a persistent inflammation of the heart muscle.

I don't think we even knew about AIDS until the late 70's.
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it's nice to know that mentally retarded children read my posts too. i like diversity. it's a shame that they take my posts seriously and at face-value, too.
 
How are you handling back adjusted contracts if you are looking at percent change level. Also how do you classify divergence. Are you looking for true divergences only or do you look at angle divergence. What I mean by angle divergence is the momentum indicator will make a marginal new high or stay flat while prices make new highs. We don't have momentum make lower highs.

In addition how mechancial your counting method.


In the futures markets, I only need cash levels, the front month. I usually monitor the stock indices, and not the futures contracts.

There are several divergences, as you know. When examining the waves I look at momentum and price angular divergences. In other words, lower prices without confirmed lower momentum and visa versa. The divergences between indices: COMPX, INX, INDU indicate the move is weakening.

Momentum can make lower highs, which is a terrific indicator for a top.

My counting method: Most of the time the waves pretty much count themselves. When the rules and minimum expectations are applied.

I sent you a PM ... did you receive it?
 
Quote from gharghur2:

Hmmm

So far it's:

60% against

40% for

Actually, that's pretty good ... thought it would be more negative.

Tony
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A few years ago when I was looking into this I identified its most famous practicioners and determined for myself if their approach has merit. I checked out two guys by subscribing to their services for a few months. The two were (1) Prechter and (2) Neely. After studying their writings in live market action in detail I dismissed both and ignored anything related to E-wave. My conclusion is that EW is junk sciense similar to astrology and numerology. Absolute garbage. Both of these guys earn a living by selling their forecasting services to various market participants of varying intelligence levels. My 2c.
 
Quote from coasting:

A few years ago when I was looking into this I identified its most famous practitioners and determined for myself if their approach has merit. I checked out two guys by subscribing to their services for a few months. The two were (1) Prechter and (2) Neely. After studying their writings in live market action in detail I dismissed both and ignored anything related to E-wave. My conclusion is that EW is junk sciense similar to astrology and numerology. Absolute garbage. Both of these guys earn a living by selling their forecasting services to various market participants of varying intelligence levels. My 2c.
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Coasting,

It is unfortunate that you have had that experience. And, in doing so made that determination.

I've been successfully applying Elliott to the markets for over 20 years. The problem I see with most practitioners, is that they try to fit their own expectations into what they see in the patterns. One has to approach EW with an open mind, or it will prove you wrong time and time again.

Good luck!
And appreciate your input
Tony
 
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