Tag: elliott wave international

USD/JPY: Lemons into Lemonade

Posted on by The INO.com Team

How Elliott wave analysis helps you as a forex trader with built-in, risk-defining safeguards

Elliott wave analysis is not a crystal ball. (No market-forecasting method is.)

But here's what is remarkable: Even when your Elliott wave forecast doesn't pan out, you have built-in safeguards to alert you -- and help you manage risk. Here's a real-life example.

Going into the November 14 low, USD/JPY charts had been showing an impulsive downward Elliott wave pattern. Impulses are 5-wave moves, but on November 13-14, the pattern looked incomplete: the fifth wave down seemed to be missing.

Here's a chart our Currency Specialty Service subscribers saw early on November 13: Continue reading "USD/JPY: Lemons into Lemonade" →

U.S. Stocks On a Collision Course with Market History

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The past offers answers about the future; market patterns do repeat themselves

By Elliott Wave International

Next time you look at a clear night sky, keep in mind that what you see is the distant past.

Most stars are so distant that it takes millions of years before the light is visible to us.

Even so, astronomers can learn much about the future of the universe by studying the past.

NASA astronomers announced they can now predict with certainty the next major cosmic event to affect our galaxy, Sun, and solar system: the titanic collision of our Milky Way galaxy with the neighboring Andromeda galaxy.

NASA, May 31, 2012 Continue reading "U.S. Stocks On a Collision Course with Market History" →

Third Waves are "Wonders to Behold"

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The Elliott Wave Principle states that in financial markets, prices unfold in 5 wave patterns:

In wave 1, the trend has begun. Wave 2 makes a sucker outta you. Wave 3 is a powerful sight to see. Wave 4 is a corrective chore. And wave 5 is time to look alive -- once more.

Elliott Wave Principle -- Key to Market Behavior (the ultimate resource for all things Elliott) provides this definition for wave 3:

"Third waves are wonders to behold. They are strong and broad, and the trend at this point is unmistakable. Increasingly favorable fundamentals enter the picture as confidence returns...

AND: "It follows, of course, that the third wave of a third wave and so on will be the most volatile point of strength in any wave sequence. Such points invariably produce breakouts... and runaway price movement."

This chart shows the personalities of each of the five waves. As you can see, wave three usually begins just when investors are convinced the bear market is back. (You can flip this chart for a five-wave move to the downside -- in which case, wave three begins just as investors think the bull market is back.) Continue reading "Third Waves are "Wonders to Behold"" →

Apple's iPhone, Germany, the Fed: Why It's All Irrelevant to the Market's Trend

Posted on by The INO.com Team

A lot of people know that R.N. Elliott discovered the Wave Principle.

Yet few are aware that Elliott made another observation during his years of studying the stock market.

As the Wave Principle forecasts the different phases or segments of a cycle, the experienced student will find that current news or happenings, or even decrees or acts of government, seem to have but little effect, if any, upon the course of the cycle. It is true that sometimes unexpected news or sudden events, particularly those of a highly emotional nature, may extend or curtail the length of travel between corrections, but the number of waves or underlying rhythmic regularity of the market remains constant [emphasis added].

R.N. Elliott, R.N. Elliott's Masterworks, pp. 158-159

What a stunning insight: Even major news does not alter the market's main wave pattern! This seems to defy logic because most people believe that news and events are the very things that drive the stock market. Continue reading "Apple's iPhone, Germany, the Fed: Why It's All Irrelevant to the Market's Trend" →

Big Advantages of Trading with the Wave Principle

Posted on by The INO.com Team

What advantages does the Wave Principle offer to traders?

Here's one of the big advantages of using the Wave Principle when trading: you can increase your understanding of how current price action relates to the market's larger trend.

Other tools fall short in this regard. Several trend-following indicators such as oscillators and sentiment measures have their strong points, yet they generally fail to reveal the maturity of a trend. Moreover, these technical approaches to trading are not as useful in establishing price targets as the Wave Principle. Continue reading "Big Advantages of Trading with the Wave Principle" →