Although the economy is still experiencing difficult times, find out how the market is playing out similarly to 2001-2002. The wave charts of R.N. Elliott have been giving forecasts of the United States stock market since 1997.
According to Dr. Howard Young, who is the editor of “The Complete Strategist”, stated that in February of 1989, the Elliott forecasts included a prediction on the Dow 400 and that Elliot Brenner, who was the editor of The Elliott Wave Chart Blog featured in “Stocks and Commodities” magazine, made a prediction considered bold that the Dow would exceed 6000 midway through the 1990′s. Has it turned out, Elliot Brenner was right.
So what is the Elliott Wave Chart?
More than half a century ago, R.N. Elliott observed that the movements of the stock market occurred in a series of rhythmic patterns. Master investor psychologists who studied stock market analysis concluded that those who participated in the stock market demonstrated price patterns that developed as they vacillated between greed and fear. These psychologists called the price patterns “waves”, and as Elliott further developed his analysis, it became known as the Elliott Wave analysis.
Russell Solomon has now implemented this website to further expand upon the ideas of the Elliot’s theory of market waves and how they relate to stock market analysis. The Wave analysis was developed as he identified different types of wave patterns and then proceeded to label them, mainly identifying two main types of wave patterns.
The first wave pattern that Elliott identified was what he called impulse waves, which were waves that moved in the direction of main trends in the market. Impulse waves were made up of five smaller waves. The second set of waves he discovered were ones that countered the popular direction that the stock market was headed in, called corrective waves. Corrective waves consisted of three smaller waves. Further into his analysis, he discovered the both impulsive and corrective waves break down into smaller waves or were comprised as parts of larger waves. Therefore, this means that all waves can be assigned to time periods that range from time periods ranging from minutes to centuries.
The one part of the Elliott’s theory that presented difficulty was labeling the waves correctly and then counting them. If correct counting happens, this can lead to a a market analysis demonstrating amazing forecasting accuracy. Thus, an incorrect count would have the opposite result. Since counting waves is subjective, it generally results in many forecasts, provided that there are forecasters who use his wave forecasting. Due to this, many critics argue that the Elliot analysis is only beneficial to use in hindsight, which insinuates that forecasting the market’s future course is not useful. This is where the disagreement comes into play. Charts on the site of Russell Solomon conclude that the simple and flexible wave counting leads to great results. One is consistently challenged by the stock market and will always be evolving, generally in the hopes of progressing to a higher level. Providing these charts will hopefully educate and encourage those who want to learn more about Elliott’s analysis and the timing of the stock market.