Elliott wave pm predictor?

Konahead

Have you guys heard of Robert Prechter and what is your opinion good or bad?

RedTiger

Prechter has been around for over 30 years. He has made some spectacularly good calls, and some horrible ones as well. That will happen when a person makes bold, headline grabbing predictions, and has a verifiable track record. When he is hot, he can be incredibly good, as his audited track record shows. When he is not, he can lose a lot of money for his subscribers and then be is forced to re-interpret the wave count (as all others will too).

Overall, I have a positive opinion and will read if Prechter's predictions are posted. Elliot Wave is predicated on mass psychology and the behavior of crowds. I know the basic-basics of it, and can count to five, but personally do not use wave analysis at all. The wave interpretation of most charts are beyond me. It is rare that a chart shows a textbook example of wave count. Wave theorists often disagree on the count.

roadrunner

I follow wave theory by others quite closely though my own skills are at the basic level. What I found fascinating is that the PM runs in the 1970's and from 2001-2008 followed precise moves of 5 waves up and then corrective waves of 3 down. The move from 2001-2008 was essentially text-book perfect. What the odds of a perfect triple 5 wave pattern during those years if just pure chaos applied? Certainly, what has transpired from 2008 has been harder to figure out. Most feel gold/silver have begun a new set of 5 legs upwards while others are sure the entire move from 2008 is part of a large 3 wave correction destined to revisit the $500-$750 range. I also feel that with additional market manipulation in the years of 2007-2009 that it's possible market movements can be altered, delayed, etc. Major shorts and derivatives have been heaped on the silver and gold markets over the past couple of years. I don't know how the action of major banks operating under a diff set of rules can be factored into the behavior of the masses. It's very possible that the waves are so altered that whatever firm rules applied a decade ago no longer apply as they once did. The whole premise of wave theory from its origins was a free market with a hard backed currency. The unleashing of derivatives and unlimited credit over the past 5 years may have seriously changed the EW game.

What I find the most valuable is taking advantage of the 5 leg impulse moves as they occur. They occur in up moves or down moves. Counting the waves (along with other TA methods) has improved my being able to time my trades better. Whatever the reason behind the 5/3 waves is (ie behavior of the masses) it works very well with commodities. But that doesn't mean it's fool proof either. During the correction from $1226 to $1074 gold basically clocked in a standard 5 wave impulse set down and followed that with 3 waves back to $1162. Currently it appears to be in the 3rd or 4th leg of 5 down. If it follows its usual pattern it will end up doing its 3 leg correction in a 5-3-5 series. I think anyone ignoring basic wave theory is leaving part of the puzzle out of the picture. For those that have an inate trading ability after years/decades of doing it, I can see where wave counting might be superfluous. For those starting from scratch I think it's very important. That's just my opinion from someone who knew none of the details of EW theory a year ago. It gives me an additional anchor to lean on. Frankly, I wish I had known this stuff back in the 1990's when I was just tossing the dart at the stock page like most every other lemming/investor. Fwiw my brother followed Prechter very closely in the 1980's and early 1990's before finally swearing him off. The 5/3 waves show up so often that it's impossible to call them random, even if it's just people trying to force those counts to happen. Regardless of how they appear, they do show up with surprising frequency.

Prechter on gold? BAAAD!.......but I don't think the fact that Prechter being wrong on gold for 10 years running has any real bearing on the application of waves to commodities. He's looking at the very long term picture. I'm more than happy to apply the wave theory to mere hours/days/weeks on the chart. If I'm looking to make a buy and see that the chart is finishing up a 3rd impulsive wave down, I'm probably not going to buy until the 5th wave shows itself. One can use the same logic on impulsive moves upward. It works for me. Your mileage may vary.

roadrunner

KUCH

Interesting post and learning more. Going to try and learn the chart better, until then RR, let us know when that 5th wave "shows itself."

roadrunner

You'll know when a 5th shows up. It will typically show up between 8 am to 10 am EST and drop gold $15-$20 almost instantly. And that 5th wave (if it shows) will have 5 sub-waves as well.

I often compare GLD, SLV, and GDX to see which shows a better wave pattern. In this case the SLV shows a much clearer pattern of 3 waves being completed with the 3rd wave down being very impulsive. GLD is not bad to follow. GDX is confusing. All 3 indicate a zig-zag completed (ABC or 1-2-3 of 12345). Should be up for now. Bigcharts.com gives free hourly/15 min charts which are good for deciphering the very short term movements.

roadrunner

yellowkid

I liken theorists to many military planners, using all their data to win the last war.

RedTiger

http://www.forexyard.com/en/news/Next-bear-market-phase-starting-Prechter-2010-01-25T185659Z-UPDATE-1-INTERVIEW

link

The concise version:
* Last chance to exit Dow in quintuple digits - Prechter
* Corp bonds to fall below 2008 panic levels
* Gold to resume bear market, dollar to continue gains
* Seek shelter in U.S. Treasury bills

Konahead

<< <i>http://www.forexyard.com/en/news/Next-bear-market-phase-starting-Prechter-2010-01-25T185659Z-UPDATE-1-INTERVIEW

link

The concise version:
* Last chance to exit Dow in quintuple digits - Prechter
* Corp bonds to fall below 2008 panic levels
* Gold to resume bear market, dollar to continue gains
* Seek shelter in U.S. Treasury bills >>



Wow! He must be alot of fun at a party. Sounds a little extreme, but where there's smoke, there's fire.