Objective Elliott Wave............
- Thread starter gharghur2
- Start date
I keep reading opinions about SPX looking more bullish than NDX, and I'm surprised. In my analysis the SPX is more overextended, and has a higher probability of immediate correction. Also, one school of thought is that NDX leads the SPX. Both these conditions make me bearishly biased.
We'll see... In a few hours a new day, week and month start, and they say ... sell in May!
We'll see... In a few hours a new day, week and month start, and they say ... sell in May!
With most of the foreign markets closed we were on our own today, and we didn't handle things very well. Bonds sold off on the newest inflation number 2%; Crude rallied, apparently resuming its uptrend; the Dollar continued its slide; and the market seemed to fall off a cliff, after there were rumors that Bernanke didn't actually mean the FED was halting the rise in short term rates. The stock market is totally perplexed, and when perplexed, they sell.
At first, it doesn't look so bad, we've been down to these levels as recently as April 17th. We were oversold then and rallied, and we're oversold now. The difference is the NAZ/NDX are now in confirmed intermediate term downtrends.
At first, it doesn't look so bad, we've been down to these levels as recently as April 17th. We were oversold then and rallied, and we're oversold now. The difference is the NAZ/NDX are now in confirmed intermediate term downtrends.
The usefullness of the Elliott Wave is often judged by the forecasts of its most popular marketeers. Everyone knows who they are, and that they are in error most of the time. It is not the Elliott Wave that fails to display the progression of market sentiment, but the technician claiming to understand the principle. Here are some excerpts from a special report I posted, on my blog, at the beginning of the year. You can read the entire report by clicking January in the archive section and scrolling to the 16th. While 90% disagreed with my findings at the time, just four months ago, only 10% disagree now.
January 16, 2006 Special Report: interest rates
In the summer and fall of last year, you probably also heard the FED Chairman Alan Greenspan talking about the interest rate conundrum, (a paradoxical, insoluble, or difficult problem; a dilemma). What he meant by that, was that the FED has been racheting up interest rates at regular invervals since June 30, 2004: 1/4% at a time. Thirteen increases in a row! As the FED continued to raise rates, long term rates continued to decline. They started declining in April, 2004. I just completed a quanitative analysis of the 30-year Bond market from 1988 to the present using OEW. And, the conclusions that I have drawn may add some light to the conundrum paradox and the potential 'yield inversion'.
According to my analysis, from late 1994 until the recent low in mid 2005, interest rates were in the process of completing a complex double three: an ABC followed by another ABC. In this particular situation it was an ABC zigzag from late 1994 to late 1998, followed by a X wave into early 2000, then an ABC flat into the recent low in June, 2005. At the time that the FED decided to start raising rates only the A and B waves of the flat were completed. Interest rates needed to decline again to retest the lows of mid 2003 to complete the flat. So effectively the FED was fighting the unfolding of the Elliott Wave. Since investor psychology is not a local event, but a worldwide consciousness. It didn't matter what the FED did, the wave needed to complete. Thus, Greenspans conundrum was basically an unawareness of what was transpiring in long term rates.
I have concluded, based upon OEW analysis, that the 24-year Supercycle bear market in interest rates ended in June of 2005. Since that low, we have had two impulse waves: the first from late June - early Aug, a correction, and then another impulse wave stronger than the first, from late Aug - early Nov. See chart: BONDdaily. The market is currently in the process of correcting this second impulse wave. Since the first wave was not a kickoff to a bull market like we often see in stocks, but a gradual climb, I've labeled it major wave 1 of primary wave I. The second advance, which was stronger, but it's correction is overlapping major wave 1, I've labeled minor wave i of major wave 3. Thus, we have effectively a 1 - 2, 1 - 2 coming off the recent Supercycle bear market low in June, 2005. To confirm this bull market, I expect like to see a 5% long term yield by as early as this spring. So one can state that I'm not only bullish on stocks, but now also bullish on interest rates.
I've posted a chart, in the photo section, of the 30yr Bond since I wrote this report in January. The Elliott Wave Theory is the finest technical tool available today to measure investor psychology, and Objective EW refines it to a Principle.
January 16, 2006 Special Report: interest rates
In the summer and fall of last year, you probably also heard the FED Chairman Alan Greenspan talking about the interest rate conundrum, (a paradoxical, insoluble, or difficult problem; a dilemma). What he meant by that, was that the FED has been racheting up interest rates at regular invervals since June 30, 2004: 1/4% at a time. Thirteen increases in a row! As the FED continued to raise rates, long term rates continued to decline. They started declining in April, 2004. I just completed a quanitative analysis of the 30-year Bond market from 1988 to the present using OEW. And, the conclusions that I have drawn may add some light to the conundrum paradox and the potential 'yield inversion'.
According to my analysis, from late 1994 until the recent low in mid 2005, interest rates were in the process of completing a complex double three: an ABC followed by another ABC. In this particular situation it was an ABC zigzag from late 1994 to late 1998, followed by a X wave into early 2000, then an ABC flat into the recent low in June, 2005. At the time that the FED decided to start raising rates only the A and B waves of the flat were completed. Interest rates needed to decline again to retest the lows of mid 2003 to complete the flat. So effectively the FED was fighting the unfolding of the Elliott Wave. Since investor psychology is not a local event, but a worldwide consciousness. It didn't matter what the FED did, the wave needed to complete. Thus, Greenspans conundrum was basically an unawareness of what was transpiring in long term rates.
I have concluded, based upon OEW analysis, that the 24-year Supercycle bear market in interest rates ended in June of 2005. Since that low, we have had two impulse waves: the first from late June - early Aug, a correction, and then another impulse wave stronger than the first, from late Aug - early Nov. See chart: BONDdaily. The market is currently in the process of correcting this second impulse wave. Since the first wave was not a kickoff to a bull market like we often see in stocks, but a gradual climb, I've labeled it major wave 1 of primary wave I. The second advance, which was stronger, but it's correction is overlapping major wave 1, I've labeled minor wave i of major wave 3. Thus, we have effectively a 1 - 2, 1 - 2 coming off the recent Supercycle bear market low in June, 2005. To confirm this bull market, I expect like to see a 5% long term yield by as early as this spring. So one can state that I'm not only bullish on stocks, but now also bullish on interest rates.
I've posted a chart, in the photo section, of the 30yr Bond since I wrote this report in January. The Elliott Wave Theory is the finest technical tool available today to measure investor psychology, and Objective EW refines it to a Principle.
No, what we judge EWers by is not that they are right or wrong, but that a great deal of what they publish is hindsite.
Take your example. I could sit there and analyse what happened last summer too and look like I know what I am talking about. The key is to do it while it is happening, and then to do it consistantly and show cause and effect.
While I think there is value in EW, I have still to meet one that is either correct more than 50% of the time, or that doesn't talk in hindsite with 20/20 vision.
nitro
Hi Nitro,
I published that report in January and this link:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=62388
I published that report in January and this link:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=62388