Registered User
Joined: 12/19/2004
Posts: 457
|
I'm curious if anyone here uses TC2005 along with Elliott Wave analysis.
I've incorporate Elliott when I can, on individual stocks. It provides low risk entry points and price targets based on Fibonacci numbers.
For those familiar with Elliott, take a look at HOV. The pattern is revealing.
|
|
 Gold Customer
Joined: 3/12/2005
Posts: 6
|
what is it telling you about HOV?
|
|
Registered User
Joined: 12/19/2004
Posts: 457
|
If you know anything about Elliott, then you know trends take 5 waves (impulse), and counter trend moves take 3 waves (correctives).
The weekly charts show a 3 impulsive waves up, that ended in 2003. There is a corrective pattern that extends from the late 2003 peak, through the summer of 2004. From there, it has been an impulsive move up, which has not ended yet.
I have the long term action of HOV in a 5th wave. That is signifying the long term trend is close to completing.
However, wave 5 has not finished yet. Breaking wave 5 down (starting from the 2004 low), it shows clear 3 waves up. This is the 3rd or C wave of wave 4.
The fib targets suggest a pullback for HOV to no lower than 42. That is the MAX retracement I'd give this, and even then, I'd question my analysis if it retraced much farther than that.
A shorter term (3 months or less) retracement to the $45 level is more likely. From there, I expect a rapid rise to the 65 dollar level, at least.
So, the trade would be:
1. Short HOV above 54, with stop just over 58.
2. Long HOV between 44-46, with stop at 41.75.
|
|
Gold Customer
Joined: 3/12/2005
Posts: 6
|
Many thanks, very interesting. I was always under the impression that Elliot is difficult as it is sometimes difficult to define when to start counting the waves. Looking at the weekly chart starting at the bottom in 2000 I see three distinct up swings, with the fourth underway presently. Where am I gooing wrong?
|
|
Registered User
Joined: 12/19/2004
Posts: 457
|
Elliott is difficult much of the time. I rely on conventional technical analysis when wave counting gives me problems. Elliott doesn't work on all stocks.
I'll have to pull up the weekly chart again later (doing computer maintainence on the one that has TC2005). But impulse waves do not always start or end at a visible price high or low.
For example, if you can imagine a price pattern that has been in a strong uptrend, and begins to form a conventional Head and Shoulders pattern, it could be:
Left shoulder is end of wave 3 OR wave 5
Head is end of wave 5 OR wave B
Then you have corrective waves, which are very hard to count.
I'll see if I can post a chart later.
Rob--aka. Sir Knowledgable Skeptic
|
|
Gold Customer
Joined: 11/13/2004
Posts: 102
|
Just a heads up. I am an Elliott Wave Student - with a capital S - very much a student.
Although I've been studying it for over a year, it's still work for me. I hope that on occassion I may run an analysis by you for my education to see if you agree or request an analysis if I'm totally lost.
Thanks
E. (Socrates)
|
|
Registered User
Joined: 12/19/2004
Posts: 457
|
HOV Update:
My prior post on HOV was pretty good. Instead of a low below 46, HOV stopped just above 47, and then took off from there.
I see no reason to change my prior analysis. I still think 65 is a reasonable target. I'd wait for a pullback before entering, though. I'd say this is a buy under 55, with a stop just under 52.
|
|
Registered User
Joined: 12/25/2004
Posts: 51
|
Clue. When deciding what wave is under observation, look at its strength using other information such as TSV.
|
|
Gold Customer
Joined: 11/13/2004
Posts: 102
|
Outstanding May 2005 Elliott Wave analysis for HOV, rmr1976.
Good job!
Socrates
|
|
Registered User
Joined: 12/19/2004
Posts: 457
|
I thought I'd review my analysis on HOV.
As you can see from this post, HOV has advanced as I had expected.
I've been trading options on HOV, with some limitted success.
My first trade didn't work out too well. I put on a call backspread in May. I was short 2 June 55 calls, and long 3 August 65 calls. Despite the advance in HOV, I managed to break even on the trade:
5/25/2005 Entry: long 3 August 60 calls/short 2 May 55 calls for net debit $2.10 (I later adjusted the trade and rolled out the May 55's to August for a credit.)
6/17/2005 Exit: Buy 2 short August 55 calls/sell 3 Long 60 calls for net credit of 2.00
I managed to catch the intraday market action of HOV on 6/17. The candle pattern suggested weakness, and I managed to get out near the market close.
Despite my disappointment at not making money on the prior HOV trade, I decided to take another shot, as my analysis was still bullish:
6/21/2005 Entry: Long 4 August 65/Short July 70 calls for debit of 2.80.
I had been planning on holding the long calls through August, but HOV has exceeded my expectations.
My Elliott analysis suggests some sort of correction for HOV is due in the very near future. It could start as early as tomorrow. Fibonacci counts suggest resistance in the $70-$72 range. Momentum is negatively diverging and today's advance was on weak volume. I suspect there will be some sort of candle reversal tomorrow.
My problem: I have no idea how significant the correction will be. From an Elliott POV, the coming correction could take us down to the $60 level. I plan on sitting on the sidelines and will sell my HOV spread on market open tomorrow.
Longer term, however, I have no reason to change my bullish stance on HOV.
|
|
Registered User
Joined: 3/15/2005
Posts: 5
|
Has anyone developed a scan for Elliott Wave? What is the scan?
|
|
Registered User
Joined: 7/12/2005
Posts: 6
|
I was interested in the same thing - is there a search or a package available to work with TC2005 to scan for Elliott Wave Count? I have been to a number of seminars touting software packages (which are pretty darned expensive), which primarily show you stocks which are in Wave 4 or 5, since these folks advocate only buying in those waves. In any case, I'd be interested in a way to duplicate that capability with a PCF or something else within TC2005. I'm still new to TeleChart, having just signed up for the 30 day trial, but am very impressed. Any help/guidance greatly appreciated.
- Ted
|
|
Registered User
Joined: 12/19/2004
Posts: 415
|
To develop a pcf to find any wave is a difficult task and I believe those developing one would not publish it in an open forum.
|
|
Registered User
Joined: 12/19/2004
Posts: 457
|
It isn't possible to use a PCF to count waves, as that would require the use of IF/THEN statements to make comparisions.
The Elliott wave software on the market is worse than useless if you aren't familiar with Elliott Wave Theory.
The software will change counts when new maket action is available, and that leaves people very confused. It isn't a position you want to be in when money is on the line.
Example, say the software says wave 5 up is starting. Then, the computer labels the market as being in a correction, and changes the count to wave C. What do you do?
Really, you should do nothing. Although both counts have different implications for future price action, the near term trend is still up. Hold the position and use a trailing stop.
I use Elliott to "follow" trends at the earliest possible moment. You can see when a pattern has completed, and if you know Elliott rules, you can set a very close stop loss. If it isn't hit, you can hold for a considerable length of time.
|
|
Registered User
Joined: 12/19/2004
Posts: 415
|
rmr1976
Would you give me your email address? (email removed by Moderator)
|
|
Registered User
Joined: 7/12/2005
Posts: 6
|
rmr1976,
Thanks for the insight. I have attended several of these seminars where they use AdvancedGet or ProfitSource and basically look for Wave 4 Buys or Wave 5 Sells and get into trades that way. It seems way too simplistic for me, and going to multiple seminars I've taken down their trades that they found through the tool. The track record hasn't been particularly good - the main reason I haven't plunked down $2500 or so for their software.
Plus, I wondered why we were avoiding the Wave 3 stretch, which was often long and strong, giving you the best opportunity for making money.
Anyway, thanks for the observations.
- Ted
|
|
Gold Customer
Joined: 3/10/2005
Posts: 12
|
There is a good package out there that reads TC2000 data directly. It's probably not something they will let me post, but it is not a competitor to TC2000 in my mind, I view it as supporting software.
In case the monitors might agree, the product's name is (third party product names are removed by Moderators).
|
|
Registered User
Joined: 7/25/2005
Posts: 7
|
I have used both Advanced Get and Profit Source. After tracking the performance in Profit Source of their prescans for two months I realized few of their setups really make money. Some stocks will rise a point or so and give it all back. Some will shoot off but these are rare.
There are several limitations with software:
1. They do not have a big picture view of the wave. Waves have fractal properties so there are smaller order waves in higher order waves. The software does not give you a big picture view. Other limitations are that tehy do not know about truncated fifths and so do the end label of a wave 3 or 5 inaccurately. They do not know much about corrections such as double, triple zigzags or flat, triangle or combination corrections. They very simplistically label everythings as an A B C. Corrections of larger ordes can have subwaves -- the software does not recognize this.
2. The correct way to do EW count is to follow Prechter/Frost/Bolton/Elliott's work. Probably the best book on this is Prechter. Applying the principle takes practice but it is well worth it. The software developer's of these programs probably have not mastered the application of EW theory. The software can only be as good as the software developer's understanding of the principles.
3. I manually label the EW count starting from the grand cycle on the quarterly/monthly chart and work my way in. I have gotten faily good at this and I can do this quickly now, and I trust my own judgement better than the software I have seen. I use a short hand notation to enter notes such as:
 .V.{3}.[a.b.c down].{4}
This would mean we are in wave Grand Cycle. In that we are on the last V impulse of wave . With wave V we are in subwave {3} (3 circled) of the primary cycle. The [] denote where we are currently. We are in an a-b-c correction with c going down -- the pattern is not complete. Next stop is end of the correction which marks the {4} end.
Knowing the structure of where we are gives us an idea of where we are headed and what are the primary and counter trend forces at work.
I use TC2005's text tool to label the waves. You can select the write icon to see the tool. Since writing your own text on the waves is so important, I wish TC2005 could simplify this and make the text tool directly available on the upper bar. I have called in this suggestion to tech support.
4. I would highly recommend Precheter's book as a starting point. EW patterns are fun and give you insight like no other system I have seen.
5. I have written my own programs that help me do Fibonnaci ratio analysis after I enter the size of the waves but after a while you can eye the waves and know that the wave if of the proper structure.
6. TC2005 has a fibonnaci retracement tool but it does not display the values on the lines. I have called this in and Telechart support has said that they will pass on my suggestion to add this feature.
7. Applying EW theory is like solving a master puzzle. At times the wave count is ambiguous because it has not completed. But applying EW theory points you to higher probability outcomes.
All the best...
|
|
Registered User
Joined: 7/25/2005
Posts: 7
|
Follow up for some reason, the notation ( I ) got translated as a bulb icon in the HTML rendering of the post. I have put parenthesis around the "I" with spaces in this post so that the earlier post may be more readable.
|
|
Registered User
Joined: 7/25/2005
Posts: 7
|
Also wanted to add that I find that the 30 minute chart gives you greater insight into the pattern, and I look at sticks with high volume. These are more likely to conform to EW theory. EW captures mass psychology and the greater the number of participants the better it works. This is why it works better for the market indicies.
|
|
Registered User
Joined: 7/25/2005
Posts: 7
|
QUOTE (rmr1976) It isn't possible to use a PCF to count waves, as that would require the use of IF/THEN statements to make comparisions.
I agree. You need conditional logic to make these decisions.
The langiage would be easy to design.
Also regarding change of EW count and labeling. When teh complete picture is not known several alternatives may exist. The software just picks just one. You need to be aware of them all. The software if one exists would be good for getting scans provided it recognizes wave structures correctly.
|
|
Registered User
Joined: 12/19/2004
Posts: 457
|
Thanks for the input on the software. I suspected as much.
Designing software that can scan for true Elliott Wave patterns is very difficult.
I also use the Worden text tool, and I'm working on a VBScript tool that will calculate the time and price projections of waves using Fib ratios.
The exact count isn't as important as it is thought to be. The key is to be able to ID a few likely scenarios, with price targets.
Very often, the different scenarios will agree on the near term direction, even if they disagree on the future action once a wave is completed. Once more data is in, you can always adjust your count.
What is very helpful is that Elliott lets you know when to look at your momentum indicators for signs of weakness.
If you are truly looking at the markets from a fractal POV, you will know to ignore some of the overbought readings on your momentum tools when you know a larger degree wave is just getting started.
Momentum tools are very helpful in identifying when a wave is likely to end. Once I see a convergence among price/time targets, momentum signals, I'll wait for a candle reversal signal before pulling the trigger.
|
|
Registered User
Joined: 10/10/2004
Posts: 22
|
Hello,
Not too long recently posted my first of messages to come...
Would you mind critiquing a cumulative expression that depicts Elliott Waves?
V/R
Lance
|
|
|
Guest-1 |