Saturday, June 21, 2014

Elliott Wave Principle

Elliott Wave is a form of technical analysis that attempts to analyze market cycles and forecast trends. If you can identify repeating patterns in prices, and figure that pattern in the context of the market today, you may be able to manage risk more effectively in the future.  In general, you may be able to identify the highest probable move with the least risk.  Below is a chart with Elliott Wave applied.
From the chart above, we have an upside target of $202.00 on the S&P 500, and a 3rd - 4th quarter to arrive at that upside price.  So we are just around 3% from that target price.  Once reached, primary wave three will be complete, and corrective primary wave four will be in play.  A -15% minimum correction wave four is forecasted.

Bottom Line:  Using technical analysis helps us remain objective while managing risk.  Elliott Wave attempts to identify the highest probable move with the least risk based on cycle counts and time patterns.  Thank you for reading.

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