Saturday, December 24, 2016

My Christmas Card to You

Sometimes a nice picture of a yule log on the fireplace says more than our fumbling for words. This picture includes my original candlestick formation known as the The Three Wise Men.

Dow Jones Industrial Average - Two Weekly

And, if you have time away from Facebook or other diversions for a holiday puzzle, where does the Elliott Wave Principle, by Frost & Prechter, tell us that, "when the third wave extends, the fourth wave often divides the Golden Section"?

Stay safe, healthy and happy!

33 comments:

  1. Merry xmas TJ! What do you make of EWO approaching the highest readings of bull market during this presumed P5?

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    1. Current value 127.1, versus peak reading of 158.2? (sorry earlier value of 201.5 was on SP500 - which is only at 117.3, right now).

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    2. Yes, the label or current price flag in the scale margin of 127.1 obscures the higher level of the peak in the scale. Regardless, still a ways to go, and S&P is even more pronounced. Further, this chart is now getting out past 200 candles, and my chart will not produce in three-weekly format on MotiveWave. I'll see later what it looks like on a three-weekly. I think I can do that on Ninja.

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    3. In MotiveWave you can select 3 weekly format, just go to Chart Settings ---> Bar Settings ---> and in Interval Type (Week) in Interval just put 3 and OK

      I hope its works for you.

      Happy New year and thanks for your work.

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  2. Ok so we are far from a new bear market long term

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  3. While I can't find the quoted text in the online version of The EWP (http://my.elliottwave.com/resources/education/ereader/FH5/EWP/EWP.aspx), it does seem that when the 3rd wave extends, wave 5 is often equal to wave 1. Is that what you're hinting at?

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    1. Page 137 of the 10th Ed (the edition on-line at ElliottWave.com): "Unless Wave 1 is extended, wave 4 often divides the price range of an impulse wave into the Golden Section. In such cases, the latter portion is 0.382 of the total distance when wave 5 is not extended."

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  4. Merry Christmas TJ and thank you for your wonderful posts!

    Is the answer to this puzzle that 2267.61 could be all we get for wave 5? Since wave 3+5 equal .618, if wave 5 doesn't extend of course???

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  5. Thanks Joe, Merry Christmas and Best Wishes in 2017

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  6. My comments are based on page 37 of The Basics of the Elliott Wave Principle. Figure 29 and the associated text seem to imply Wave 5 should be .382 of the total move. So on the S&P, the move from 666.79 to 1810.10 should be .618 of the total. Solving for X I get 707.706 points for Wave 5. Added to 1810.10, I get a top of 2,516.80. How many hundreds of points am I off by?

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    1. Yes. Wave 5 would be 0.382 of the total move.

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  7. Joe, Happy Holidays. Can you tell me the significance of the 3 wise men. Thanks

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    1. Hi Samuel. Same to you. Prior fourth waves (Minor 4 of Primary III, and Primary IV. itself). It's like the chart itself is screaming for us to recognize those points. Very often an Elliott Wave correction will stop in the neighborhood of a prior fourth wave. So, we should note the low in Feb, 2016 is Primary IV. Meaning this is Primary V, and it length should be able to be determined.

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  8. Objective 2486 for me
    I do not know how long to reach the final summit

    according to you?

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  9. My back of the napkin calculation and Figure 4-6 from Frost and Prechter's text suggest that from the wave 4 low of 15450.56 minus wave 1 start at 6469.95 equals 8980.61 which suggests that to be .618 of the entire move. Therefore the entire move should be 14531.73. 14531.73 minus 8980.61 leaves 5551.12 for the 5th wave. The wave 4 low of 15450.56 plus wave 5 of 5551.12 would top out at approximately 21001.68.

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  10. Merry christmas of France region of alsace wine region

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  11. TJ,
    Can you give us your prediction on the S&P based on using EW for the next 4-6 months? I know you think we are in a wave 5. Where do you think we are in that wave 5?

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    1. I'm not TJ, but look at his last few updates for the answer

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    2. It appears we are in a three and now some sort of a four or five of maybe that 3. But I'm not clear on big picture prediction It seems to have changed from topping soon to taking a lot longer and potentially going s lot higher.

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    3. C'mon, Todd. You need only to go back to the Dec 22 post to see we likely are in Minor 4, of Intermediate (3) of Primary V. The post above - if you will enlarge the Christmas Card, shows a tool called the Fibonacci Frame, which divides the Golden Section into Fibonacci ratios. It therefore shows Primary IV at the 38.2% level (the three-wise men candles), and now in Primary V. It also shows the upper border of the frame at the 21,000 level - which is approximately 1,010 points from the Dow's high. That is about eight 150 pt days on the Dow. I'm not saying they will happen that way - but it is not 'far' by any means. In terms of the timing, likely after the first of the year. And that is unless wave V extends, which is 'possible', but we're not there yet.

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    4. That's what I was looking for. THanks

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  12. Merry Christmas Joe! Thanks for the card :-)

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  13. Merry Christmas Joe!
    And wishing you and your family a Happy and Wonderful 2017!

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  14. Thanks to John C and Mike for the calculations which I agree with. My problem is that it shows a 5.3% increase from here while the same analysis applied to the SPX yields an 11.2% increase. I know we still have an Int 4th wave to correct but that is a fairly large differential. Any help on this?

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    1. Just a thought Tom, the Industrials with only 30 companies concentrated maybe can reach the wave 5 estimate while the S&P 500 with more companies maybe can't achieve its numerical estimate.

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    2. Good thought. Often in topping markets there are divergences between the major averages themselves.

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