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ELLIOTT WAVE TIME AND PRICE PROJECTIONS

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ELLIOTT WAVE TIME AND PRICE PROJECTIONS

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  1. ELLIOTT WAVETIME AND PRICEPROJECTIONS by Jerry Rubinstein WEST COAST CYCLES CLUB October 28, 2008

  2. SALIENT CYCLICALITIES November 19, 2008 Nesting of the 22-week and 44-week cycle lows.  The last time that happened was on Jan. 16, 2008, and we all know about the panic then that continued on into Tuesday, Jan. 22nd, when the Federal Reserve Board had to intervene on M. L. King Monday with a .75 point Fed. Funds rate cut to prevent a catastrophic collapse. {Cyclically, my dominant 55-TD Hi-Lo cycle low marked the exact low.} Additionally, and this is the scary part, on that exact same date I have a 55-week cycle low as measured from the Oct. 31, 2007 highs, which itself was the precise cresting date of  the previous 22-week cycle.  The last time a 22-week cycle low and a 55-week cycle low converged in the same time frame was June 18-20, 2008, and that came right in the middle of the May 19 > July 15 collapse. 22-year cycle low from the infamous “Boesky low” of Nov. 19, 1986, marking the climax of the Ivan Boesky insider trading scandal.

  3. SALIENT CYCLICALITIES (2) • Nov. 16, 2008 -- 20 years from secondary low of Nov. 16, 1988. • Nov. 18, 2008 -- 16 (4 x 4 yrs) years from secondary low of Nov. 18, 1992; • Nov. 26, 2008 -- 108 Trading Day cycle low; • Dec. 4, 2008 -- 21 (Fib.) years from completion of the orthodox Elliott Wave structure that encompassed the Oct. 19, 1987 Crash; • Dec. 9, 2008 -- 34 (Fib.) years from the Dec. 9, 1974 low, a major Elliott Wave low of “Cycle” degree. • Dec. 9, 2008 -- 14 years from E.W. low of Intermediate degree Dec. 9, 1994, the day Orange County became the largest U.S. governmental entity to declare bankruptcy.

  4. INTER-RELATIONSHIPS OF ELLIOTT WAVE FRACTALS • One of the three “Cardinal Rules” of the Elliott Wave Principle is that the Third Wave of any sequence can “Never Be The Shortest”. The Third Wave is most commonly thought of as the “Longest and Strongest” and is often referred to as the “Recognition Wave”, where market participants finally “get it”. • Third Waves are powerful wonders to behold. They generate volume & price expansion, produce gaps, breakouts, extraordinary breadth & oscillator readings and are accompanied by improving/worsening fundamentals that confirm the ongoing bullish or bearish trend .

  5. INTER-RELATIONSHIPS OF ELLIOTT WAVE FRACTALS(2) • The five waves that comprise an “Impulse” fractal are related to each other in Fibonacci proportions. Since Third Waves are the longest & strongest, in the textbook Elliott Wave structure, they are most often 1.618 x the amplitude of the First Wave. When they are not, that becomes an important signal as to their relative strength or weakness. • In the Oct. 11, 2007 > Jan. 22, 2008 five-wave impulse sequence on the DJII, we have seen how the 1.618 proportionality played out perfectly, in spite of the Jan. 22nd panic. That’s largely attributable to the fact that it was a First Wave.

  6. INTER-RELATIONSHIPS OF ELLIOTT WAVE FRACTALS(3) • In the present context, we are in the grip of a powerful Third Wave & the traditional E.W. formula of W-3 equaling 1.618 x W-1 has already been exceeded. In the DJII, the orthodox model called for Intermediate Wave 3 of the index to terminate at 8989.30, as illustrated by Chart #5 on slide 11. The similar projection for the end of Intermediate Wave 3 on the SPX was 923.92, as shown in Chart #6 on slide 12. Neither price level even provided temporary support as they were easily blown away by the 679-point decline of Thurs., Oct. 9, 2008. • We are now confronted with a Third Wave extension.

  7. INTER-RELATIONSHIPS OF ELLIOTT WAVE FRACTALSConclusion • The Third Wave extension we are now experiencing can only be attributable to the fact that we are no longer in a “mere correction”, but rather a secular bear market of at least Super Cycle degree---which means we are in the process of correcting the entire Super Cycle Wave from1932 > 2007. The most common proportionalities of extended waves are Waves 1 + 3 for Fifth Waves; and for Third Waves, it is 2.618 x the amplitude of Wave 1. For the DJII: 2.618 x 2563.28 = 6710.67 which, when subtracted from the Wave 2 high, projects to DOW 6426.02. For the SPX, 2.618 x the amplitude of 319.11 points = 835.43, which yields a projection of 604.81.