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What technical tools are there to distinguish Elliott Wave 3 from 5?

Primary Wave 3

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#21 fib_1618

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Posted 12 October 2017 - 08:14 PM

 

 

Predicting market movements is impossible no matter what method is used. It's all an optical hindsight illusion.

You can get a few right but on average you will go broke every time. Markets change too much for something to work

often enough to keep from going broke. I have been using front run momentum technicals for 14 years and it just does not work,

I don't care what you are using. Only internals I trust is NYAD divergence at secular tops, other than that, forget NYMO,

NYSI, et al. Just trade price renko and same position size over and over and expect to be lucky to make 50% per year.

 

Just because you haven't figured out how to use an indicator, doesn't mean it doesn't work.

 

It's sort of like saying that a SUV was speeding and ran over someone instead of blaming the driver of the vehicle.

 

Everything works...it's just the person using the tool that hasn't learned how to use it effectively.

 

Fib

 

 

 

This reminds me of a time years and years ago when I read a review in Stocks and Commodities Magazine of Jack Schwager's book "Market Wizards."  The reviewer, with tongue parked firmly in cheek, said that everyone who reads books like Schwager's Q&A interviews with great traders and investors are always looking for "THE SECRET".

 

And once again the Market Wizards did not reveal "THE SECRET". So disappointing!  All those guys ever talk about, the reviewer said, is "persistent, discipline and experience" and never about "THE SECRET."

 

 

Well...I've learned that there really isn't any secrets in this business which is why I always smile when I see someone post something as being "proprietary". With analytical tools it's really quite easy to be successful, but you first have to know how the indicator math is constructed (what it measures), and then you have to apply this equation properly. For some, this comes easy to do. For others, it's bit more difficult as you have to put in your time in working with the tool to discover any nuances it might provide to you. From that, you either add or subtract those tools from your "bag of tricks" in an effort to find those that are complimentary...both to each other and to the time scale you wish to trade.

 

So...I guess..."the secret" comes down to both consistency and to trading discipline that you use with said tools to make your trading judgements (executions) on when to buy, when to sell, when to hold, and above all else, when to go to cash. Products (whether they be options, ETF's or futures) or the time perimeters you're comfortable with don't really matter as long as you stay with this secret formula in making your money always working for you and not the other way around.

 

Fib


Edited by fib_1618, 12 October 2017 - 08:15 PM.

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#22 pedro

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Posted 12 October 2017 - 10:38 PM

Original question involved distinguishing a 3 from a 5.

What about a 3 vs a C ?     (assuming A wasn't in three legs).

Do C's always fail to make new MACD highs, so they appear like 5's do relative to 3's?



#23 OEXCHAOS

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Posted 13 October 2017 - 05:56 AM

If you ask me (and no one has! :) ) the "SECRET" is CONTEXT.

 

This thread is about that, but it's not the only one that works.

 

Mark


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#24 fib_1618

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Posted 13 October 2017 - 09:12 AM

Original question involved distinguishing a 3 from a 5.

What about a 3 vs a C ?     (assuming A wasn't in three legs).

Do C's always fail to make new MACD highs, so they appear like 5's do relative to 3's?

 

In all cases, momentum diverges in wave 5 compared to 3 and wave C compared to A.

 

Fib


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#25 dowdeva

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Posted 14 October 2017 - 09:12 PM

Geo,

 

Did EWI get back to you?

 

TIA



#26 Geomean

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Posted 16 October 2017 - 10:07 AM

It's been an interesting exchange.  Hochberg responded that he uses the basic rate-of-change or relative strength in analyzing the progress of an Elliott wave structure.. Jeffery Kennedy in his video on using the MACD in Elliott Wave Analysis references, (with attribution to it's author, Bill Williams, "a brilliant technician from Texas" per Jeffery at 2:00 -2:10) the utility of the 5/34/5 MACD in all degrees of trend at about 5:45 min in this link https://www.elliottw...ze-Trade-Setups    Jeffery said he was going to talk about just two of the 5/34/ 5 MACD's five uses in that video, the ZLR(zero line reversal) and the "hook, so it's not clear if he uses it for wave count identification as Bill Williams strongly recommends.

 

In reviewing this further, including again watching Bill Williams on YouTube were he talks about using the 5/34/5 in Elliott Wave count analysis, I noticed that he clarified (better than in his book IMHO) that the entire Elliott Wave sequence being analyzed with  the 5/35/5 SMACD must be captured in a range between 100 to 140 bars, noting that the 100 bar minimum is 3 standard deviations from the 34 length.  What this means in analyzing large degree waves is that one must use extremely long duration bars.  For example, if analyzing the wave structure of the equity markets per EWI's data set, which goes back to 1695, would require each bar to be approximately 2.3 year or larger.  In analyzing the Dow going back to 1920, which is my longest data set, in order to display it with 100-140 bars, requires bars slightly less than a year.

 

Consequently, my assertions about the longer term wave structure based upon the Williams 5/34/5 SMACD were not properly grounded in his method because I used monthly data for evaluate very large degree waves..  The longest wave sequence one can properly evaluate using monthly data would be structures with their impulse sequences coming within the last  9.5 to 11.4 years! 

 

So all that can be said using the monthly data in the Dow is that we are now seeing highest reading of the 5/34 SMACD since 2006.  The only possible incomplete 5 wave impulse candidate starts in 2009.  Hence the 5/34 SMACD suggests that the are in a Wave 3, with a wave 5 of that structure ahead of us in the Dow.  The SPX is different, it has the highest 5/34 monthly readings  (so far) in Sept 2014 so a wave 5 count is still viable.  The Compx is currently at it's highest (but reached higher in 2000 which is outside the data set, but which makes one want a longer term view.  The Russell 2000 had it's highest reading in March 2014.  So where all this fits in a larger picture will require analysis with yearly and multi-year bars going back over very long data series, which is more work that a trading focus permits.

 

 

The conclusion therefore is that there is analysis uncertainty without looking at the larger degrees .  Hurst analysis permits a view that is consistent with the 5/35 MACD.  Here's part of my notes this weekend on the Hurst analysis of the Dow.  The analyses of the other indices are generally consistent. 

 

 

 

"All runs using Hurst’s nominal model on a DJIA data series starting on 5/2/21 are immediately bullish but project a multi-year top toward the end of November:   Runs using Hurst’s nominal model with a data series start date in 1966 using Peaks and Troughs is choppy and bearish until the end of October then bullish until the end of November for a multi-year high.  Hence all Nominal models are calling for a late November top.

 

 

 The commonality models Peaks and Troughs is in agreement.  ( Hurst proposed the construction of a commonality model which would take the results of many different analyses and find the common trough and its magnitude present in those analyses.  The commonality model database I use contains over 1,600 commonality models, each one which is a synthesis of all of countless Peaks and Troughs analyses of many markets around the world, and shows a gradual rise to a multi-year top around Nov 20, 2017.  The commonality model troughs only shows a gradual rise to a multi-year peak in Feb 2018 and unlike all other models is placing an 8.8 year trough in Feb 2016.  The L sigma long cycle line is peaking as is the 18 year cycle in all models.

 

Overall, the Hurst analysis in all forms is suggesting a significant multi-year top within 6 to 16 weeks."


Opportunity knocks on your door every day-answer it.

#27 CLK

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Posted 16 October 2017 - 10:52 AM

To have a possibility of a multi-year top, we need a drop then another high over weeks of time and a lower NYAD at the second high.

Lower A/D on an hourly basis or over several days means nothing. 



#28 Geomean

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Posted 16 October 2017 - 02:03 PM

Let us know if/ when you see that set up.  A lot of great technicians over the years swear by that signal.


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#29 fib_1618

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Posted 16 October 2017 - 03:02 PM

Let us know if/ when you see that set up.  A lot of great technicians over the years swear by that signal.

 

That's because this is the only way to acknowledge when you have a lessening of investment capital demand not being able to support the current supply of outstanding shares.

 

This is the essence of everything capitalism has to offer...from the cost of toothpick to the cost of a house and everything in between.

 

Fib


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#30 CLK

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Posted 16 October 2017 - 05:29 PM

Here was my top call 5-28-15. My chart went with photo bucket but here it is, I added the vertical red line to show when I posted.

I waited for the confirmed drop first as NYAD can be way early as in months early as it was leading into 2000.

 

http://www.traders-t...9911-internals/