quarta-feira, 7 de janeiro de 2009

What's So Special About Elliott Wave Analysis?

http://www.elliottwave.com/freeupdates/archives/2009/01/06/What-s-So-Special-About-Elliott-Wave-Analysis.aspx




By Vadim Pokhlebkin
You may already know that it's easy to follow professional Elliott wave counts in market charts – such as the ones you see in Elliott Wave International's publications, for example. But if you've ever tried to count waves on your own – especially under pressure, while trading – that can be a real challenge.
Yet those who know Elliott say that it's well worth it. What's so special about it? Well, it just happens to be a question we hear a lot. For answers, let's turn to someone with experience in wave analysis and trading: Jeffrey Kennedy, one of Elliott Wave International's senior analysts and instructors. Here is his take.
Elliott Wave Analysis, Benefit #1: It identifies the trend.
You always want to trade in the direction of the trend, with the wind at your back. For example, if you are long a stock, your probability of success is much greater if all major indexes are also rallying. Well, Elliott wave analysis is based on two types of wave development: impulsive and corrective. Impulse waves are five-wave moves, and they identify the direction of the larger trend. A five-wave impulse tells you the trend as up, while a five-wave decline tells you it's down, as this idealized diagram shows.


Benefit #2: Elliott wave analysis identifies countertrend moves within the trend.
Corrective waves are simply a response to the preceding impulse wave; corrections always move against the trend. They typically subdivide into three waves (A-B-C) and give us, the traders, an opportunity to position our trades 
in the direction of the market's larger trend.

Benefit #3: Elliott wave analysis identifies upcoming changes in trend.
Elliott waves are fractal: Larger five and three-wave structures consist of smaller ones. This lets you gauge the maturity of the trend. For example, if prices are advancing in wave 5 of a larger five-wave advance, and the current wave 5 has already completed most of its smaller waves, you know that this is not the time to be adding to long positions. Instead, some profit taking is in order, or your protective stops need to be raised.

Benefit #4: Elliott wave analysis confirms the resumption of the trend.
Corrections typically unfold in three waves: A-B-C. When an A-B-C is over and price exceeds the extreme of wave B, it implies that the larger trend has resumed.
 

Benefit #5: Elliott wave analysis provides high-probability price targets.
When R.N. Elliott, the discoverer of the Wave Principle, wrote 
Nature’s Law, he specifically stated that the Fibonacci sequence was its mathematical basis. Elliott waves, both impulses and corrections, adhere to specific Fibonacci proportions – and those translate into price targets.

Benefit #6:Elliott wave analysis provides specific "points of ruin."
Where are you wrong? That's the eternal question for traders. The Three Rules of Elliott help us here:

Rule 1: Wave 2 can never retrace more than 100% of wave 1.
Rule 2: Wave 4 may never end in the price territory of wave 1.
Rule 3: Out of the three impulse waves 1, 3 and 5, wave 3 can never be the shortest.

Of course, as wonderful as all this sounds, it's just theory. How do you turn it into trading strategies? Practice, practice, practice. The only shortcut I know of is to find a teacher. Then you can r
eplace their months (or years) of being beaten by the market with a few days of learning.
At EWI, we have practiced Elliott wave analysis for 30 years now. Now is your chance to turn theory into practice in a live 2-day setting at our new Intensive Elliott Wave Trading Courses, "How to Trade in a Fast-Moving Bear Market" -- now held in Atlanta, GA, New York City, NY, and London, England. We still have a few seats left.

How Bush Became "The Worst President Ever"

http://www.elliottwave.com/freeupdates/archives/2009/01/05/How-Bush-Became--The-Worst-President-Ever-.aspx


By Nico Isaac
In the wake of Barack Obama's historic presidential election, it's difficult not to acknowledge his predecessor George W. Bush's precipitous fall from that very position of leader of the Free World.
Fact is, public opinion of Bush has undergone one of the most radical about faces in memory: From his first-term's highest approval rating in the Gallup Poll's entire 70-year history, TO second-term whipping boy with a record-low approval rating of 27%.
In the words of one December 31 news headline: "Scholars unflinching in negative assessment of Bush's legacy." (Detroit Free Press) And, according to the experts, "W" will undoubtedly go down in the book as one of the "Worst Presidents Ever."
Contrary to popular belief(s), the REAL reason behind Bush's fall from grace is not "policy" (say the leftists), "scapegoating" (say the rightists), or a "breakdown of bipartisanship" (say the middle-ists).
It is: A downturn in mass social mood, as reflected by the bear market decline in the Dow Jones Industrial Average.
In his 2002 best-selling book Conquer the Crash, Bob Prechter addressed the one pre-condition for Presidential popularity and wrote: "U.S. electoral history shows that when the stock market is rising, reflecting a positive social mood trend, voters tend to maintain the incumbent leader. When stock markets collapse, the leader is thrown out in a landslide or by other means. There are no exceptions to this rule."
(Presidential Popularity AND Stock Prices: Mass social mood alone determines whether a leader leaves the White House a hero, or a disgrace. The latest Financial Forecast Servicereveals whether Bush's bear will be Obama's legacy. Act Now)
The moderate gain in the market averages in the three years leading up to Election Day in 2004 indicated a small margin in Bush's favor, and that's the way the election turned out. On that very day, the November 4, 2004 Elliott Wave Theorist warned: Bush's victory would be short-lived. An excerpt from the EWT painted this startling picture:
"This is bad news for Republicans, who will rue the day they won the election in 2004. The large degree of the bear market that is underway is likely to wreak havoc with Bush's second term… He will probably experience something very like Nixon's second term but worse: A bigger slide in the stock market, a drop to lower levels of popularity, and ultimately ousting by some method. If he makes it through all four years, the next Republican candidate will probably lose the 2008 election by a huge margin. The downhill course of this presidency will pave the way for the Democratic candidate to become president in 2008."
Note: EWT's prediction came BEFORE the Bush Administration was marred by the bursting of the real estate bubble, the subprime mortgage implosion, the Hurricane Katrina levy debacle, the Abu Ghraib scandal and Guantanamo Bay detainment camp controversy, the credit crisis, and the across-the-board meltdown of all asset classes in the U.S. economy.
The wheels of a downturn in social mood had already started to turn. Our team of expert analysts foresaw that its reversal would take down every pillar of the former bull market glory, including the President (and his party) – AND determine the outcome of the 2008 election long before the November 4 votes were tallied.
Socionomically speaking, Barack Obama's campaign slogan of "Change" was pure genius. Change is exactly what social mood had undergone AND exactly what it would demand of its new leader.

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