Objective Elliott Wave............

Quote from gharghur2:

The Elliott Wave is not a mystery, at least my version of it. Simply because, what I call Objective EW, has little subjectivity to it. Allow me to explain.

EW is best used for identifying long term trends, sorry not day trading. When a trend is established, one can anticipate what is to follow in terms of impulse and corrective waves, by applying some basic rules from the original theory; i.e. third waves can never be the shortest, and second/fourth waves must alternate in pattern, etc.

In my approach I use two basic TA concepts: trend reversal and momentum. You see trend reversals on bar charts often: a lower low in an uptrend, a higher high in a down trend. Momentum, conversely, is a simple rate of change: day 'y' compared to day 'x', on an ongoing basis.

In the early 1980's, I developed MMI (market momentum indicator) to verify the wave count as it unfolds. It has worked to perfection for over 25 years. As a bull or bear market unfolds, the MMI unfolds as well, in an almost identical pattern. When read properly, one can actually see the waves unfold in the oscillator. See chart below:

This is how it works. The MMI is a simple 40 day rate of change oscillator: a fibonacci 8 weeks. It simply compares todays close with the close of 40 trading days ago. Simple right? However, it also has a few rules to help interpret the momentum cycles: a complete cycle consists of 5 waves, it can subdivide just like waves, it is labeled just like waves, and the 4th wave is always lower than the second...always! This is how one can tell when a price wave is subdividing without the need of guess work (subjectivity).

In the chart below, I display the bull market thus far, and (as best I can) the MMI. Notice how waves (1 - 4) all line up with the indicator, and momentum (4) is lower than (2). Also, notice the subdivision within wave (3) and how 4 is lower than 2. This is Classic Objective EW, the Nasdaq is beautifully displaying a very clear bull market. Now, since the wave (4) momentum low, we've had four waves and four momentum waves. This is the key to this bull market!

The fourth momentum wave HAS NOT exceeded the second, thus as before in wave (3), wave (5) is extending. I've marked in RED on the chart what has already occurred, and in BLACK what has yet to occur (not to scale) in the MMI.

If you keep up with this thread, or visit my blog: http://spaces.msn.com/members/caldaroEW/
you can watch the bull market unfold before your very eyes, just as I have for over two decades. And, it works perfectly in bear markets as well. Good trading!

Tony
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Confused: in your post you mentioned 40 day Rate of Change, but its attached chart shows the 14 day RSI.
:confused:
 
Hi!

Not sure I understand what you are stating.

We have done four primary waves up I - IV
Primary V will be minimumly subdividing as such:

1 - 2 - 3 (i - ii - iii - iv - v) - 4 - 5

We are currently in wave iii of 3 of primary V
 

Attachments

Quote from cnms2:

Confused: in your post you mentioned 40 day Rate of Change, but its attached chart shows the 14 day RSI.
:confused:
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Sorry, I am unable to actually display the MMI for various reasons. But it is a modified version of the 40 day ROC I assure you. I posted this weekend:

"My Market Momentum Indicator has just this week confirmed a momentum uptrend in the NAZ, which means we have a lot more to go on the upside before we get overbought, and this advance ends. Typically the MMI confirms a momentum uptrend when it rises 8% from it's lows, and an impending intermediate term top when it reaches 15%+. In this cycle, the MMI bottomed at about - 3.5%, and has only risen to 5.25% as of friday. We remain in an uptrend."

One only gets bits and pieces on ET, and thus sometimes I'm misinterpretted. to see the whole picture one neds to follow my blog: http://spaces.msn.com/members/caldaroEW/...it's FREE
 
Quote from gharghur2:

Hi!

Not sure I understand what you are stating.

We have done four primary waves up I - IV
Primary V will be minimumly subdividing as such:

1 - 2 - 3 (i - ii - iii - iv - v) - 4 - 5

We are currently in wave iii of 3 of primary V
More...

Tony,

How do you determine the wave degree...just looking at your nasdaq chart with labels, wave 2 and i are about the same size implying to me that they should be of the same degree, no? Also with your target of 2560 for nasdaq, this V th wave will be as big as the wave III -- shouldn't wave V be much smaller than wave III? As my knowledge of EW is limited, may be I am missing something -- may be you can help clarify it a bit- thanks.
 
Quote from lynx2004:

Tony,

How do you determine the wave degree...just looking at your nasdaq chart with labels, wave 2 and i are about the same size implying to me that they should be of the same degree, no? Also with your target of 2560 for nasdaq, this V th wave will be as big as the wave III -- shouldn't wave V be much smaller than wave III? As my knowledge of EW is limited, may be I am missing something -- may be you can help clarify it a bit- thanks.
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Lynx,

Wave degree is interpreted by pattern. I try to start with the simplest structure (1-2-3-4-5) and work from there.
In example: Waves I - II - III - IV are simple in structure; wave IV clearly did not overlap wave I. However, the advance from the Aug 2004 lows, was overlapped by the correction of the Apr 2005 advance: thus a 1 - 2, 1 - 2 structure leading to a 3 of 3 is to be anticipated. And, this is confirmed by the incomplete cycles within my MMI.

Once a third wave is larger than the first, wave five can unfold in any relationship to wave one, wave three or a combination of both. In other words, it is free to unfold within it's own structure.
For example; the bull market from 1982 - 2000 in the DOW.
Wave 1 1982 - 1984 about 500 pts
Wave 3 1984 - 1987 about 1600 pts
Wave 5 1987 - 2000 astronomical pts.
The bull market could have ended in 1990, at 3000, and wave 5 would have been about 1300 pts. But because of the euphoria of the Iraq War it extended from 3 years to 13 years. In other words, once wave 3 is longer than wave 1, wave 5 is on it's own.

Typically, mind you, there is some sort of relationship between wave 5 and waves 1 and 3. And, I would expect that to be the situation in this bull market.
Hope this helps
Tony
 
Perhaps misperceptions arise due to spatial dimensions being distorted (skewed). Quantitative models are curve fitted due to fractal geometry exploitation.

Assumptions:

graph paper=> log=>linear=> Squared=>multi-dimensional non-Euclidean geometry
 
Quote from infolode:

Perhaps misperceptions arise due to spatial dimensions being distorted (skewed). Quantitative models are curve fitted due to fractal geometry exploitation.

Assumptions:

graph paper=> log=>linear=> Squared=>multi-dimensional non-Euclidean geometry
More...

Perhaps you would like to elaborate?
 
Quote from gharghur2:

Perhaps you would like to elaborate?
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Its an extrapolation from that well known equation: the angle of the dangle is equal to the throb of the knob.
:)
 
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