Limited Upside Potential | $IWM #fibonacci #elliottwave

Quick note here on the Russell (private request I decided to share)

Market closed right at 121.53 in the context of the following predictive/forecasting model results:


1 - TG-Hi = 121.78 - 13 FEB 2015


2 - TG-Hix = 128.18 - 13 FEB 2015


- ELLIOTT WAVE ("EW"); Wolfe Wave ("WW"):

Model suggests a topped-off condition. A large WW inscribed within the EW's 3rd wave termination with projection of the triangular top edge forward illustrates a crest-to-crest alignment in 4 distinct times. The second time is the crest of a large A-B-C zig-zag towards the completion of EW's 4th wave, with two consecutive attempts at higher highs, blunted by that top-edge projection off of Point-3.


Another pattern (not shown, but easily discernible in the H4 timeframe is a WW, nascent within the ending upswing of the current 5th wave completion.

While EW's ED may also be considered concurrent to the smaller WW within the completion of the 5th wave, I would remain close to the WW consideration, as it applies stricter rule in terms of forecast, projection and reversal levels.


The model itself remains neutral at this point, as it has not completed the forecast levels above. Nonetheless, it has presented a topping situation and defined a lower target as follows:

- TG-Lo = 66.62 - 13 FEB 2015


The nominal targets offer low-probability attainment against high-probability reversibility, meaning that any of the TG-Hi, -Hix, -Lo, -Lox represent extended conditions wherein market will tend to loss velocity and reverse in the order of 0.618 and beyond. This is in contrast to the numerical targets (TG-1, TG-2, ..., TG-n ...) where price has a high-probability of attainment, but low-probability of reversal. instead, at these numerical target levels, price will not reverse, but retrace in the smaller order of 0.382 up to 0.618 - In this situation, the targets are calling for a high-probability reversal at the levels defined.

Going forward, I would pay particular attention to the geometric             developments. The EW's ED has its own merit, but one that may be best supported by the metric precision of the WW. Taken together, whey will only affirm any confirmation otherwise granted on their own merit.

Directional bias is bearish . Yet, indicator is neutral until the geometries play out.

Stay tuned,

David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA


David Alcindor

Weekly wise,
i am not sure whether the divergence back in Jan 2014 would play out.
It would be good IF next week's candle ends in DOJI or high spin wave candle (but Mr. Market does not care what i think) :-)
+1 Reply
4xForecaster jangseohee
Hello @jangseohee - Thank you for sharing your charts. Very ,much appreciate it.

Yes, in the WEEKLY chart, the 3 tall candles from the new bottom end at a level which I would define as Point-1 of a nascent Alternate Wolfe Waves pattern ("AWW"). There are a lot of wedged geometries forming in there, coming to a focal point. From the mutli-yeat HIGH to recent LOW, measure 1.414-Fib, and that could possible represent a reversal level.

+2 Reply
Hi David, i would like to share my humble view, hope you do not mind :-)
IWM is the ETF version of Russell 2000 index.

From the daily chart:
1. I see potential bearish divergence (price can still go higher until bearish signal appears)
2. 2009 uptrend line has broken down completely and both attempt to break it back FAILED.
3. Interestingly enough, a rising wedge is formed under the 2009 uptrend line where the blue region could be a resistance

Another up bar would be a euphoric state
+1 Reply
$IWM - 4-Hour Chart:

Here, the close up on the potential development of a WW is highlighted by the BLUE points. The line projection from EW's Point-4 (blakc) to WW's Point-s (blue) is only a preliminary line, as it may not line-up with the anticipated WW's Point-4. Hence, the dashed line off of Point-3 is also part of that entire preliminary scheme.

The anticipation of the WW here is solely based on the Predictive/Forecasting Model calling for a potential TG-Hix = 128.18. The bias here remains towards an interim advance to the levels defined in the most immediate timeframe, whereas the longer view anticipate a significant top and reversal at these same levels.

David Alcindor
Sunny88 4xForecaster
Nice work, really appreciated!
+1 Reply
Sunny88 Sunny88
Not sure if this is correct. For weekly chart of WW, If connect point 1 and 3, we got a line and point 5 should be on this line, it looks like almost 140 for point 5.
Sunny88 Sunny88
For your analysis model, how do you decide the start point: that is point 1. It will have quite different result if choosing different start point.
+1 Reply
Hi, @Sunny88 - This is a great question.

If you look at the Elliott Wave's 5th wave, the start point would have to be along the development of that final wave, and not off of Point-3, which is considered in EW as a tentative but not final level to consider (mainly because it helps approximate the slope of the 1-3-5-equivalent points (there are defined as a-c-e in EW) within the 5th wave - In effect, this terminal wave in EW is called the Ending Diagonal.

In contrast, the WW can be considered in any of the patterns in which - let's take the case of a bearish pattern - Points 1-3 and Points 2-4 are causing their respective lines to converge in an upward direction. In this case though, one may consider Point-1 of the WW to correspond to Point-3 of EW.

The only way one can distinguish which is most reliable at the end (i.e.: whether Point-1 of WW is better than Point-a of EW's ED) is by turning to either an indicator.

The way I estimate which is best is simply by looking at my targets. If the target is not reached, and I used EW's Point-3 as the departure point of my WW, then I would have two options:

1 - Consider that the pattern is not done rising towards the target


2 - The target will not be reached using EW's Point-3, but then make sure that a third higher-high is occurring along the 5th wave as the EW completes a ED.

But this is ONLY if I had to trade off of patterns. In my rule, if the pattern is a TG-Hi, then it remains VERY likely that it will get to the target, no matter what the WW or ED's ED demands.

However, if the target is a TG-Hix, this runs a much higher risk of NOT be attained, and I would either have to NOT take the short position, or take one with the risk of an adverse excursion (i.e.: moving contrary from the expected direction) and wait until the higher target is reached.

Remember that the ONLY reason why I use patterns in my analysis is to offer the reader an intellectual bridge between what the model defines as a possible level of attainment without having to make sense on its own and how a plausible pattern scenario could unfold to make sense of the model's targets.

Here is a compilation of examples I have used in the past where I would offer a "crazy" target (the public would either dismiss as fantasy or get really angry, since often it would contradict hopes and aspirations - But the model is what it is, and I too have learn to respect it):

- http://bit.ly/16JMnH8

This was a long reply to your simple question, but your inquiry is quite loaded and demands that i explain that in the analysis, I write what the model says, and write how it "could" possibly make sense from a standard analysis approach.

Thank you for your curiosity and support.

David Alcindor
+1 Reply
Sunny88 4xForecaster
Thank you so much for detail replay and this is not a simple question. Actually, for this iwm chart and analysis, I've read a lot of times and feel understand better each time.
+1 Reply
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