Swing Trading, Robert Prechter and Elliott Waves… Market Forecasting
Elliott Wave Analysis for me is a useful tool when it comes to forecasting market movements. I’am not going to get into too much here, you can go to ElliottWave.com and learn all about it, Robert Prechter has a ton of information for you when it comes to Elliott Wave market forecasting. I have my own pivot point calculator for forecasting pivot points, break outs and break downs. Counting waves and trading on the patterns in the market compliment the pivot point calculator.
There are 3 basic rules for Elliott Wave Analysis:
1. Wave 3 can NEVER be the shortest impulse wave
2. Wave 2 can NEVER go beyond the start of Wave 1
3. Wave 4 can NEVER go into the same price area as Wave 1
Now there’s more to it than that but you can’t break those rules, if your count breaks one of those 3 rules, your count is wrong.
Click Here…ElliottWave.com has an excellent article on a real life example of analysing wave 1 and 4.
Click here to go to……..http://stockcharts.com
The above chart shows the Russell 2000 and where the market ended today it is quite possible that the Russell 2000 could go a little higher, anything is possible. If it does, we could see a low in mid June.
It’s not technically the end of the month, but it’s close enough for me. I like to look at charts and the long term charts are full of information. The above charts shows the Russell 2000 monthly chart and the price action inside the channel with a median line in the center. You could have 10 different people seeing 10 different things here. The way it looks to me, if this is end for the Russell 2000, we could see the price action go down to the bottom channel line. We are approaching the overbought line on the stochastics momentum indicator.
The above chart shows the HUI index or otherwise known as the Gold Bugs Index. You never know, the price could go down to the bottom trend line or the median trend line. I heard that the redemptions for the mutual fund companies is killing the price for the gold stocks. That’s the thing about the gold stocks, when there’s pressure on equities as a whole and the guy or gal down street has a margin call, he or she has to sell. I’ll wait, I’am patient.
Well that’s a wrap for today. I still have TZA, I shouldn’t, but I do. I was think about ditching today but when the day was done, everything in the chart’s that I interpreted led me to believe that should see some sort of a correction before moving higher, if we move higher.
Swing Trading using the Elliott Wave Principal is a powerful tool simply because a lot of traders don’t use it, it requires too much brain power, Robert Prechter has plenty of stuff at his site for you and Elliott Waves are great for Market Forecasting when a turn is going to happen using the 5 wave wedge.