DJIA Weekly Close 031910
February 23, 2011 by
Filed under investment advice
Review of the Dow Jones Industrial Average weekly and daily closes through March 18th, 2010. Nothing in this video is to be taken as trading or investment advice. This video is educational only and intended to help show how Elliot Waves might be counted. It also helps provide current and historical perspective.
Thanks for the positive comments. Yes, in my experience Elliott Wave has been “directionally correct” in the long run, but often winds up being “very early” in it’s calls. To me, that is attributed to “activist” central banks on an unprecedented scale. As far, as to where this move might end, a video update tonight will address that more fully (but just remember this is not to be taken as trading or investment advice.)
That would be one very glaring hole. Although in your 25 years of EW have you found EW to be a good harbinger of market direction? I remember you said that most people get in to trouble when they don’t follow EW rules explicitly.
I’ve seen all of your videos and they are excellent – some fo the best that I’ve seen on EW. I’d be curious if you will be posting where you think the current uptrend will terminate.
Thanks Joe!
@T1systems Yes, it is a five wave move, but since (in my view, according to the rules in other videos in this channel) it does not fit in the parallel Elliott trend channel, and it is largely propped up by central bank policy, rather than industrial expansion, it is a “corrective” 5-wave move, and not an “impulsive” five-wave move. It is clear that Elliott included this type of 5-wave corrective move in his overall theory
@mquartarone It “could” be but the entire move up does not form a parallel trend channel according to the rules in my first video, and several subsequent ones. PArt of the idea I am trying to “test” is to whether that basic tenet of Elliott theory even holds any water. If that one doesn’t (and it may not), then to me, none of the theory holds any water. The only exception to this rule would be an ending diagonal.
@T1systems While it will not fully address your objections (not that I don’t have them with Elliott Wave) an interesting relationship I just found with the “Z” wave will be included in a video update tonight. My only point, and I should have spent more characters on it, was that if Elliott was not imposing strict relationships on the W-Y-Z relationship (that Y “had” to be longer than W, for example; or that “Z” had to be 0.382 of Y), then I wouldn’t either.
@ElliottTrader “So I won’t guess about relationships for W-Y-Z.” This is
the most basic tenet of EW. The various waves need to be proportional.
C should not be 5% of A nor the other way around. Indeed this is the
liberty you frequently take in your counts: tiny wave “c’s”, huge b waves,
etc. in running corrections. Indeed, when you look at Elliott’s original work
there are no XYZW, etc. patterns. No running corrections with c waves
5% as long as b waves.
@ElliottTrader If “W-X-Y-XX-Z” are used to reflect “five wave structures”
then you are saying we have possible “5 wave structures” off the March
low? The entire pattern can now be counted as a 5 wave structure as well.
Could the up move from March 09 be impulsive as it certainly looks like W is wave 1 – X is wave 2 – Y is wave 3 – XX is wave 4 and we are now in the final wave 5 advance? This would imply that Mar09 low was the start of a new bull market. Usually at a market turn you get increasing volume to a final top and then a reversal – we don’t seem to be getting that yet so I woulld think that this up move has more to go. I’m leaning towards the bullish interpretation rather than a market crash.
Here is all the Elliott Wave site says about triples:
“Occasionally zigzags will occur twice, or at most, three times in succession, particularly when the first zigzag falls short of a normal target. In these cases, each zigzag is separated by an intervening “three” (labeled X), producing what is called a double zigzag (see Figure 13) or triple zigzag. The zigzags are labeled W and Y (and Z, if a triple). ” So I won’t guess about relationships for W-Y-Z.
Yes, one could chose to label them as ABC of (A), etc. However, I suppose the W-X-Y-XX-Z labels were chosen to reflect a five wave structure.
1) Couldn’t we label WXY as ABC of (A)?
2) If this is a triple shouldn’t Z be of a similar magnitude
to W and Y?
Either way doesn’t that point to a target over Dow 12,000?
Right on. This correction has been difficult to ascertain but I believe this complete move up from last March is corrective.
Interesting video on the broadening top, so thanks for the reference. As to the new moon, Art Cashin, Director of Floor Operations for UBS has been saying for weeks now on CNBC that the summer solstice (Mar 21st) is often a turning time for stocks. I have not seen any research on it, but will be cognizant the season is changing in a number of ways.
Who knows if this is the top! It is interesting to note that the total time for waves a & b equals wave c of Z if we assume Thursday was the high. By the way, if we are in a larger scale broadening top pattern since October, then we may have a bit more room to the upside to complete the pattern. See this video:
watch?v=RMxn4yvalLE
Finally, Thursday was the new moon, for whatever that’s worth.