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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: yard_man who wrote (208856)12/10/2002 8:53:46 PM
From: Perspective  Read Replies (1) of 436258
 
I used to ignore Elliot and treat it like an ink-blot test or cloud spotting. However, I've seen it applied successfully too much to be sheer coincidence. The training to pay attention to sentiment - disbelief, recognition, capitulation - the training to always be looking both ways, the training to be flexible, the importance of certain TA - it all seems to come together with some added value.

I personally don't believe in any immutable rule of fives. However, I can tell you with 100% certainty that I can spot the difference in price behavior between a large demand push is coming into the market (motive wave) and the corrective price pattern that appears when the motive force is removed. (The analog in electronics or mechanical systems is the ringing that occurs in an underdamped system.)

There are vast periods where Elliot becomes virtually useless for prediction - pretty much whenever price is in a corrective mode. The successful Elliot practitioners I know look for those periods - and purposely step away from trading during them.

We've been in a non-trending, corrective mode ever since July on the time scales that matter to me, so I've been almost completely out of the market. However, things have reached valuations where I'm again raising exposure to the short side. Now that the motive force behind this rally has waned, I'll be using corrective upward activity to step back into shorts.

However, if I spot impulsive, motive looking up, I'll correct my mistake.

BC
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