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There is always debate and controversy surrounding the usefulness of
Elliott wave. I find it very useful at times but can certainly understand
the problems others have with its application. The market APPEARS to be in
a classic Elliott wave structure that may be at an important turning point.
I'm going to share what I'm seeing at this time but this is not intended to
renew the debate over Elliott. I reiterate that I certainly respect the
viewpoints of those who don't use this technique in their analysis or
trading for whatever reason.
The attached chart is a 195 minute bar chart of the NYA cash index. There
are some pretty classic Elliott relationships at work on this move; the
third wave is 1.5 times the length of wave one, and at today's high (so
far) wave five and wave one are equal in length. Also, the Elliott
channeling technique of drawing a trendline connecting waves two through
four, and then drawing a parellel line using the top of wave three to
project resistance of the fifth wave appears to add credence that we are
approaching some degree of a top. Yes, there is a slight throwover of that
line. This is not that unusual as long as it doesn't persist, which would
then be valuable information to lead one to look for the next likely
resistance points.
The fact that there is no alternation between waves two and four (both are
sharp, quich corrections) are hints that the move may still be in a three
with any near term correction developing into a fourth wave. That doesn't
matter to the trader because the bigger issue at this time is whether or
not we are making a top of any degree.
Hope this helps.
Regards,
Tom Alexander
Friday 11:45 EST
Attachment Converted: "c:\eudora\attach\R_sp3.GIF"
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