GolgaFrinchan

Scary SPX500 possibility!

TVC:SPX   S&P 500 Index
283 views
8
As a newbie, I follow a handful of people (screened over months). One of the low profile ones is https://www.youtube.com/channel/UCGpNumF... If I understand him correctly, the so called Trump rally is a wave B of an expanding flat. The logic is that the moves since then all seem to be in 3 waves, and from my interpretation could be a leading diagonal .

The idea was reinforced by a recent fractal tweeted by @elroytrader (https://twitter.com/elroytrader/status/8...) who, to me, is THE best contributor on Seeking Alpha. However, do note that this is far from his preferred count.

While this forecasts a substantial drop, perhaps the indices could revert back to pre-election levels since the expectations of policy changes may be fading.

Would love comments from ElliottWave experts on how valid/probable this count is.

Comments

BTW - a flat (channel) usually alternates with a non-flat. I don't remember the exact EW rules for flats. Will re-read the book.
Reply
GolgaFrinchan tradeBob1
@tradeBob1, Many thanks for your pointers. Could you explain a bit which flat channel you are referring to in the 2nd comment?
Reply
tradeBob1 GolgaFrinchan
Again, not an expert. Flats are 3-waves. They form triangles. They are truncated 5-waves. The impulses are coming too quickly to form a normal 5-wave, so you get a 3-wave instead (go to the beach and count waves on a choppy day, or by a inlet). If you look at the ABCDE level elliot waves, you will see lots of 3-waves (ABC) on the larger chart. The 3-waves (flats) make counting difficult. Hope this make sense. This may not be classical Elliot wave theory, in fact, I'm sure it isn't, just my limited understanding of flats.
Reply
tradeBob1 GolgaFrinchan
This might help. New Elliot Wave Theory: "In today’s market, 5 wave moves still happen, but our years of observation suggest that a 3 waves move happens more frequently than 5 wave moves. It’s important not to force everything in 5 waves when counting and labeling."
Reply
ABCDE is simply the next higher Elliot Wave. So wave C is like wave 3. Disclaimer: I'm Not EW expert. But normally, you would expect point C to hit the top of the channel, and then point D would hit the bottom of the channel. C and D would normally line up on Fib numbers, from point A. The channel is pointing higher for the rest of the year. Yes, 3 waves and 5 waves are common, so are other combinations in Elliot Waves, including 7-waves, 9-waves, and 11 waves... especially inside channels (triangles), like above. Please do your own due diligence, but I would stick with the channel, if it was me. Try not to think in terms of fear (scared), it will throw your trading off. Look for high-percentage repeatable patterns. Best in your trading.
Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar About Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter