I have been posting on this blog for nearly a year now. During that short period of time "The Elliott Wave lives on" has been selected by both Google and Yahoo as the most relevant Elliott Wave blog internationally. EWL was chosen as one of the initial participants in the first weekly bloggers sentiment poll on the internet. And the site has had over 100,000 hits. Personally, the bulls have praised my work, and the bears, well let’s just put it this way, the bears don’t praise bullish market technicians unless they say the final top is approaching. The market has made several medium term tops: Aug 2005, Jan 2006 and May 2006; and several bottoms: Oct 2005, Feb 2006 and July 2006. For the entire period of time, with the exception of one week where I was neutral, I have remained long term bullish on our stock market, and the International stock markets as well. It’s easy to remain long term bullish when we’re in a bull market. As for the medium term ups and downs: I was short term bearish at the tops and short term bullish at the bottoms. That’s relevant!
The technique that I use to anticipate the overall trend of the market and the medium term turns, I termed; "Objective Elliott Wave" (OEW). It might be better defined as "quantitative EW" rather than objective, since the exact turning of all medium term waves is a precise point in time, measured and pinpointed only by this technique. There is no subjectivity involved whatsoever. All medium term waves turn at a precise point, as they have for over one hundred years now.
Bull and bear markets unfold in medium term waves. One building upon the other to define the overall long term trend. When one knows exactly where the turning point is in these waves, the labeling of previous and future waves becomes much easier to understand, and to anticipate. This is the reason I have been on the right side of the market since I developed OEW in the early 1980′s. When I combine this quantitative Elliott Wave approach with some additional technical indicators, the past is completely understood, and the future course of the market is quite clear. Let’s take a look at the SPX’s bull market.
Posted below is a weekly chart of the SPX, the most popular index for technicians these days, dating back to Jan 2000. It graphically illustrates the nasty cyclical bear market which split the index in half. And, our current ongoing bull market from the Oct 2002 lows. Applying OEW to the market action since the Oct low, I have continued to label the waves as having completed four of five Primary waves: I, II, III and IV, with Primary wave V still ongoing. From the Aug 2004 low, the end of Primary IV, I continue to label Major waves 1 and 2 completing in Mar and Apr 2005 respectively. The next significant advance is labeled Intermediate wave i, and its correction at the recent lows, Intermediate wave ii. Therefore the SPX should continue to advance upwards to complete Intermediate waves iii and iv. As well as, Major waves 3 and 4, before this bull market ends with its final top at Primary wave V. Quite a normal bull market!
In addition to the projected wave pattern, I have indicated the specific price levels to be attained as each medium term wave tops out. The technique I am applying here I termed; "EW pivot points". It’s another aspect of OEW. In the second chart below I break down the waves a bit further to display each of the medium term waves at their actual turning points. Notice Major wave 1 and Intermediate wave i were both bullish five wave structures. Also note, the tops that have occurred for the past two years have all been identified, in advance, by the EW pivot points listed on the chart. The SPX has been unfolding in a perfectly symmetrical bull market. With our current medium term uptrend underway, I am anticipating a top near the next EW pivot point at SPX 1383. Suggest you print this second chart out and refer to it from time to time as this uptrend unfolds. This is the EW being quantitatively applied to the stock market. In 2006 I decided, for the first time ever, to provide private tutoring to those who seriously wanted to understand the true Elliott Wave and how to profit by it. Email me for details.
I remain bullish long term and medium term, as the bull market still has a long way to go. And buying the dips in my own account. As for most of the other Elliott Wave technicians; "Turn bullish, you are missing this entire cyclical uptrend: Cycle Wave ONE."
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