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Tom,
Jeff's count looks viable to probably 95%+ Elliotticians. That does
not make it correct. In fact it almost certainly would make it wrong,
markets being what they are. While you are correct in saying that no
one KNOWS whether a given count is correct until after the event, it
is but a useless piece of information. We cannot trade on that. We
should only trade on scenario's of significantly high probability with
good reward/risk profiles. For example a trade with 90% certainty and
a reward/risk of 0.5 is good. Also good is 40% and 2.0. It is all
relative.
Back to the issue at hand. I may not be able to tell you what the
actual count is on the S&P (I don't do wave counts on that market),
but I can say with 90%+ certainty that Jeff will unfortunately have to
relabel his chart in due course. In the short term that may have no
practical trading consequences, but longer term he will ultimately
miss a higher degreee turning point.
I can have this confidence level because while the Rule of Alternation
is only a guideline, it applies 99% of the time. Therefore from a
practical viewpoint it is treated as a rule. Keep in mind there are
many types of alternation, only one of which is pattern. To make sure
readers are looking at the same thing, I am referring to waves (2) and
(4) on Jeff's chart.
People should keep an open mind on the subject, as that is how we
learn. BUT..and this is important. Once we have learnt what the
FACTS are, then we have the confidence to be decisive in certain
situations. In my 15 odd years of applying Elliott analysis in REAL
TIME (not hindsight counting) I can say there are certain things I
have come to trust with utmost faith. One of those things is
alternation, in whatever form it takes.
If Jeff has the knowledge to eliminate what is not possible, then he
will be left with one or more wave counts that is certain to be
correct. I have an excellent ability to eliminate the impossible on
our local All Ordinaries Index, and therefore only rarely do I need an
eraser :-)
Adrian Pitt
http://www.macquarie.com.au/menu/mnu32.htm
>Jeff's count looks quite viable to me. First, alternation is a guideline,
>not an immutable rule. Secondly, the lack of alternation is in a relatively
>minor degree of the overall trend, and the next higher degree is in the
>process of forming alternation between (2) and (4) as Jeff has it labeled.
>
>More importantly, no one KNOWS whether a given count is correct until after
>the fact. Elliott is a super methodology that at times can give a trader a
>very useful assessment of the probabilities of future market movement. Jeff
>generously shares his interpretations on various markets quite often and I
>have found his work to be quite accurate and rigorously derived from an
>Elliott perspective.
>
>Regards,
>
>Tom Alexander
>
>
>----------
>> From: Adrian Pitt <apitt@xxxxxxxxxxxxx>
>> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>> Subject: Re: MKT - Elliott Wave: S&P500 and Hang Seng Index
>> Date: Saturday, May 30, 1998 3:55 AM
>>
>> Jeff,
>>
>> Hate to disppoint you, but your wave count on the S&P is wrong and
>> will eventually have to be relabelled. How do I know this?
>> Easy....there is no alternation between waves 2 and 4...they are both
>> labelled as Flats.
>>
>> Adrian Pitt
>> http://www.macquarie.com.au/menu/mnu32.htm
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