"The Price-Time Review is always looking back to see the future"
Mini-Introduction
P3
and Non-Subscriber
Educational Information FOR:
Please Select a major topic from P1 to P5 below--OR--scroll down
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P2
(Gann-1 &
LongWave rate and trend analysis)
P2b
(Gann-2 & LongWaves-2)
P3
(
Elliott Wave:bar, candle, pf, & swing charts )
P3b
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P4
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--Please select
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Elliott Wave Mini-Introduction P3
P3 Keywords:
Elliott Wave
,
Elliott Wave Theory
, Elliott
,
Phi
,
Fibonacci
,
Fibonacci sequence
,
Fibonacci retracements
, timing the
market
,
technical analysis
, stock
charts
,
log scale charts
,
semi-log scale charts
, wall street
history
,
chart scale
,
ratio analysis
,
longwave
,
long term trend
,
fractals
, trading stocks
, Point-Figure
charts
, Swing charts
,
geometric pattern analysis
,
business cycle diagram
,
key U.S. business cycle
.
Periodic Cycle Information
is now on
page P4 of P5
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-Please scroll down to the
bottom for Swing and PF Chart Intro-
Elliott-Wave Theory
"Using
Elliott Wave Theory for stock analysis is
also a lot like putting together a puzzle, in that the
closer you get to "the end" of the larger
patterns the easier it is to
"see" where the next piece is "most likely" to fit,
or what the whole puzzle will look like when it's finished.
1
Unfortunately,
sometimes, even many times, we can't actually
see what the pattern will be until after the puzzle is finish,
and therein lies the basis for some correct, eventhough
narrow minded, criticism of it.
"
Into The
Looking Glass--
"The Correct Application of Elliott Wave
Theory" (2000)
Andrew J. Quiggly
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As an analogy for this first tenet, the
computer programming languages COBOL (Common Business
Oriented Language), FORTRAN (Formula Translator)
, and BASIC (Beginners All purpose Symbolic Instruction
Code) all do "nearly" the same job, but each software "language"
uses different "keywords," or "terms," that relate more directly
to a certain group of professionals.
For example, COBOL uses the term "sum" to do
addition because that term has more meaning to the accounting
types who use that language. By contrast, Fortran uses
the term "add" to perform the exact same task because it
has more of a "symbolic" meaning to the engineering and scientific
type professionals who use it.
In the final analysis, these "languages"
provide the common terms and define a set of predefined
rules by which a task can be performed, and that is what
Elliott Wave Theory provides to the study and analysis of
a stock market's indexes or individual chart patterns. Based
on this first tenet alone, it's correct to say that "without"
Elliott Wave Theory there "would be" only chaos in the stock
market.
Secondly, Elliott Wave Theory sets
out a "thesis," or "hypothesis," that seeks to
explain the actions of prior historic price chart movements
and consolidates the results of many years of historic
observations into a wide reaching "theory" that can
be used to "approximately" predict future movements.
To that end, the theory begins
by defining a stock market's Bull or Bear movements
by a series of personality traits that identify
each major "phase," or "wave," that all stock markets,
as well as a few other
based markets, seem to have followed and repeated
many times over the course of the twentieth century,
and perhaps, even longer.
While the reasons why any market should
have a strong tendency to repeat certain patterns, phases,
or "waves" over and over again is very much an ongoing argument
among both the theory's practitioners and the lay public,
it will become "very-very clear" to just about everyone
who takes the time to actually review the evidence that this
tendency does indeed exist.
Another example of how we use the Point-Figure and Gann Swing charts
in our analysis is illustrated on the graphic below, a the next link shows
how we applied wave counts to the DOW monthly candle chart.
<Elliott Wave example #2:DOW JONES Industrial Average 7/25/06>
By the way, speaking of candlestick charts, do you
know what the most common candle pattern to show up on charts for all time
periods: hours, days, weeks, months, or years? A Doji you say? Wrong
but nice try!
Ok, it's a pattern WE CALL, at PTR, a "3 in 5 candle pattern," and
few professionals know that it exist even when it's "constantly" in your
face, chart after chart!
If you already use Elliott Wave then you should recognize this as 5
waves inside 3 time periods, days to years, with 3 being a Fibonacci number.
In addition, the second most common pattern to appear in charts is
the "9 in 5 pattern," meaning, of course, 9 waves in 5 periods, and with
the number five being a Fibonacci number as well. As Ewavers "should"
suspect, a 9 in 5 pattern is the very common "subdivision of" wave 3, or
5, within an overall larger five wave pattern that completes nine waves
in five periods.
IF you are an Ewave trader, in any time frame, and you can't "count"
CANDLES to confirm simple line and/or bar charts, then you are well behind
the learning curve, and I firmly suggest our Ebook or our Website service
to get you up to speed on this A.SA.P.
Using Elliott Wave Theory for stock analysis
is also a lot like putting together a puzzle,
in that the closer you get to "the end" of the larger patterns
the easier it is to "see" where the next piece is "most
likely" to fit, or what the whole puzzle will look like when it's
finished.
Unfortunately, sometimes, even many times, we
can't actually "see" what the pattern will be until
after the puzzle is finish, and therein lies the basis
for some correct, eventhough narrow minded, criticism
of it lies.
For
Mutual Fund investors with only an interest in
reducing their long term "RISK" by keeping a "casual
connection" to the parallel universe of Technical and
Wave Pattern Analysis, then you can learn as much about
Elliott's methods as you want from our massive educational
material, or just use our Market-View "weekly trend ratings
and alerts."
Needless to say, while we do our best to leave
few stones unturned for those aspects of complex pattern
analysis that can have a significant influnece on the U.S.
Stock Markets, including Mr. Elliott's work, there are no guarantees
in this business, and we work in probabilities rather than
absolute certainties.
While many of these complex and advanced methods
are well know to apply to other types of markets, at PTR
we deal ONLY in the analysis of the U.S. Stock market and
to a few other World Stock Markets if they have the capacity
to materially influence the U.S. markets.
<ElliottWave example #2: "what-if" wave
count on SPX "swing chart">
IN
the Elliott Wave Theory section of
the Review, we use our own wave "counts," made
on bar charts, swing charts, and the point and
figure charts (all three), as well as the output of two
software programs. Most market professionals are
either well aquatinted with this theory, or at least have
a "fair" working knowledge of the basics.
Most aspects of the theory are fairly straight
forward; eventhough, it does have it's limitations do
to the subjective nature of chart patterns in general.
Our two Elliott Wave technician's, me and one associate,
have a combined experience of sixteen years in "wave counting,"
and we also use both the Elliott-Wave Analyzer (II and III),
as well as the Elwave 7.0 software.
While there are a few Nay-Sayers
that denounce Elliott Wave as some kind of mysterious
voodoo or witchcraft, and a few other hard core believers
that think it's an exact science, I can assure that it's neither
of those two extremes, but does have a legitimate "influence"
on market indexes and individual stocks.
AS a matter of fact, after using Elliott
Wave Theory daily for over seven years, I have no
doubts, what so ever, that it has a "very large" influence
on both the market indexes and individual stocks.
For example, if anyone believes
in the 38% or 61% "retracement," then you believe
in Elliott Wave Theory because those values were first
identified by R.N. Elliott in his second major works
on the wave theory, called
Nature's Law.
While I will not spend a lot of time here
trying to convince anyone of it's merits, I feel very
confident that anyone who subscribes to this service will
realize, in short order, that this method has plenty of validity
to it.
One of the unique things we do with our wave
counts is to check them against the two software programs
that I mentioned, and then check that count against
both the Gann Swing Chart and the Point and Figure chart,
which we have found to give excellent wave counts when set to
the correct parameters. An example of both is displayed
in the graphic header to this introduction
, above.
Another "key" aspect of Elliott wave "counting"
that we include that is not seen anywhere else,
as far as we know of anyway, is that we place the "key"
market "cycles" on the PTR wave charts by showing their "sphere
of influence" as a geometric ellipse.
Since it's our strong belief
that some "key" trading, market, and economic cycles
have a mild to strong influence on the Elliott "price wave
patterns" actually generated, as well as the fundamentals
and news, then these "time periods" for the key cycles
can be good evidence to support a current wave count,
and thereby improve the probability of the projection into
the future.
THE charts in this section
will be updated as often as we believe necessary, and
"usually" no longer then once every four or five
months.
The links below lead to some examples from our
Elliott Wave Section, and these files are big too, so be patient
and please respect our copyrights.
<EXAMPLE: Elliott Wave software we use: EWA-II>
<EXAMPLE: Elliott Wave software we use: EWA-III>
<EXAMPLE: Point-Figure
chart & Gann swing chart used for weekly analysis 1/07>
While the Elliott Wave section of the Review
does not have a full blown Elliott Wave tutorial, we
do cover many of the key aspects of the theory without
trying to redo what is available elsewhere on the Internet.
For example, while the history and basis for the Theory
is "interesting," it is well covered elsewhere and not something
we spend much time on.
By the way, here is the very short version of it's
history: It was placed into the public eye by the combined
works of it's orginal theorist, R.N. Elliott, in the 1930's
and 1940's, as well as by a major review of Mr. Elliott's work
by John Frost and Robert Prechter, in 1978 and 1994.
Before I move on, I want to give out some
unsolicited advice in relation to Elliott Wave Theory,
which I know is a bad thing to be doing but here goes
anyway.
For those who are just starting to work
with Elliott Wave Theory, I would consider and remember
these two important "points," which we have learned
from the school of hard knocks. 1) NO PATTERN
is ever the "THE ONE AND ONLY" pattern possible...ever,
and 2) While everyone should learn the rules and
guidelines and "try" to work their analysis within the boundaries
of them, you MUST remember that THIS IS NOT AND EXACT SCIENCE,
and with the huge amounts of money to be made from just plain
breaking those rules then we must always stay "flexible" enough
to at least consider the possibility that minor violations
may occur.
These violations can be deliberately instilled
into the market in order to promote confusion or
they may just be the result of "extrem" irrational
exuberance" at key turning points.
For example, IF a "excellent looking "wave two (w2) goes
below the prior start of the "apparent" wave one (w1),
we will not have any referee or judge to go to if we find out
many weeks, months, or years later that this "violation" of the
strict rules was nothing less than exuberance out of control,
or outright manipulation by the big money speculators
to squeeze out a big buck for themselves.
Hey, come on now, the big money wouldn't stroop to violating
the rules would they? Well, I would answer: "the attorney for the
defense rest on the merits of the case."
Keeping this second point in mind, we should
always look for those patterns that didn't violate
the rules first, but also keep those that "just verily"
violated the rules on the radar screen and under consideration.
Furthermore, always, and I mean always,
check for "overlaps" on the daily AND weekly closing charts,
as well as the line charts, before jumping to any premature
conclusion about an intra-day or daily closing "overlap."
That is to say, if a pattern overlaps on a daily and
weekly line chart then it's much more likely to be a real overlap
and not the setup for a "trick" or a "trap."
In the end, stock trading is the mixture
between playing a game of chess and playing a game
of poker. While knowledge and intelligence is
a prerequisite for "successfully" playing of the game,
there will always be those who just plain "luck out" and
those who will try to "buy the pot" with their huge bank
rolls.
AJQ
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--Please scroll down
to continue--
Swing Charts and Point-Figure charts with Elliott
wave counts.
<Elliott Wave: Fast Track to our unique and accurate methods>
In addition, we also apply our Elliott
Wave Counts to these swing charts, because we have found
them to be extremely helpful in determining what the most likely
wave count is. We also mark the Pivot Points and
the key points of retracements and support and resistance
on these chart, and I suspect many subscribers will find
it much easier to follow a wave pattern on these charts then
the actual candlestick or line charts.
As for the Point-Figure
Charts, they are fully explained in the educational
section of the review, and most trader will already
be familiar with them.
Since "they" say a picture is worth a thousand
words, this next URL link will take you to a small
sample of a typical Swing Chart for the PTR web site;
of course, that graphic above, the header, also shows a
fine example of typical Swing Chart, on the left, and a Point-Figure
chart on the right.
They are big pic files, of 300k. Also, please respect our
copyrights.
<EXAMPLE: Point-Figure
chart & Gann swing chart used for weekly analysis 1/07>
<DOW (INDU) PF and Swing Chart "what-if analysis for Elliott
Wave count 8/06>
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--Please scroll down
to continue-
NEXT PAGE
P4 OF P6
RISK MANAGEMENT
STATISTICAL AND HISTORICAL ANALYSIS
ECONOMICS AND FUNDAMENTALS
BUSINESS CYCLES
As for the Point-Figure
Charts, they are fully explained in the educational
section of the review, and most trader will already
be familiar with them.
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All material contained herein
is orginal content, except as noted, and Copyright(2003-6)
PriceTime LLC, or it's editors:
Andrew J. Quiggly or B. Bonfoey
-all rights reserved-
certified and recorded for record
on January 22, 2006
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The
vast majority of information that we discuss and
the opinions we state in regard to that information can be
considered a form of "forward-looking statements," very similar
to those identified in Section 27A of the Securities Act of
1933, as amended, and Section 21E the Securities Exchange Act
of 1934, as amended. Such forward-looking statements are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.
"Forward-looking statements"
describe future expectations, plans, results, or strategies
and are generally preceded by words such as "may," "future,"
"plan" or "planned," "will" or "should," "expected," "anticipates,"
"draft," "eventually" or "projected."
You are cautioned that
such statements are subject to a multitude of risks and
uncertainties that could cause future circumstances, events,
or results to differ materially from those projected in the forward-looking
statements, including the risks that actual results may differ
materially from those projected in the forward-looking statements
as a result of various factors.
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END
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