I had written this piece for Forbes over the weekend, and it was published in the US edition Monday morning.
Here is the link : Stock market rally a chance to get out
I have recently stumbled onto your site and purchased your ebook. First, thank you for providing a window to your thoughts and your excellent ebook. I’ve read other publications on EW and thought yours was a great addition.
With regards to the current movement in the S&P, I too have counted a very clear five waves down. The recent rally unfolded in five waves (in my opinion) which included a gap as well and we are currently headed sharply downwards.
My question is this: when a correction ensues, which is what I (and I think you) believe to be happening from the recent lows, if we are in fact seeing five waves up (where price topped at about 1350) how do we know if this is A of an ABC or possibly the entire ABC correction? It reached beyond the 50% fib level from the entire move down (1420’ish – 1250’ish) so it’s plausible that the correction completed (if it’s a wave 2) but what would be the clue that it needs to continue traveling higher to finalize the correction?
I know if we get five waves up for an A we should expect a shallow B wave and a zigzag to finalize the corrective move. But are there other clues as to when the correction has finalized (it’s easy to jump into what I’m calling my A wave and count an ABC correction on a smaller time frame, hence my confusion)?
Fxamro, You are asking some very important questions. After you have had a chance to read several of my old posts on WaveTimes you will come to appreciate that my approach to the markets is more hands-on. The goal of EW is to make money. We should also bear in mind that when we are applying our theory to a live market (ie not making hindsight calls), several counts will seem equally possible. So it comes to making a judgement call. After that, we have to stick with our call until proved wrong. I think the recovery was a 5 wave move, which means it could have been either a C wave of an irregular 4th , or we just posted an A wave, and we will get a C wave up later on.From a trading perspective, I would wait a bit before risking money here. Perhaps we will get a tiny 5 wave down, in which case one can sell a pull back with a stop above the 1335 high? But that becomes too intraday for most people. So it is better to sit out for a clear 3 wave recovery to happen and then sell with suitable stops. NOt sure if I ansered all your questions… typically these are best explained in a seminar!
Good Morning Dear Ramki, simple and accurate analysis of the stock market rally. I have read your book -5 Ways to Financial Freedom for about 5 times till now and practice it daily on the EOD charts. Still learning and every time I read it seems that I am reading it for the first time and dont feel fully confident to apply it practically.
Also it would be great of you to share your views on the Indian markets.
Should I follow the same guideline as for the S&P as the Indian makets tend to follow the U.S. Markets. I am confused , and I hope you shall be able to guide me.
Thanks and regards.
HI Dr Sanjay, Thank you vm for your comments. While stock markets do tend to take cues from each other, there are regional considerations to take into account. It is best to analyze them separately using the techniques you are learning from the book. It might surprise you, but even I go back and read my own book once in a while because in addition to having the knowledge, we need to reassure ourselves of the underlying harmony in the markets. I am sure you do the same with your medical books.
Thanks for the analysis. I am wondering if we should be too strong to expect the wave 3 after this correction, or a wave C. The reason I am saying this is that, there is a less talked about probability of this (major count) being a correction to first wave that started back in oct 2011. If that is the case, we may just get a C wave before turning sharply higher that is going to befuddle a lot of bears.
Hi Shiva, Thanks for the comment. One of the points I make in my lectures is to avoid reading too many people. That will only serve to throw the trader off the track. As just about anything could happen in the market, and we acknowledge that fact, we should stick with our own counts until they are proved wrong. The key is to know where one will be wrong, and to enter teh market where that critical level gives you an affordable stop!
Steve, I love it when people ask interesting questions such as yours. There are two approaches to this matter. If we get past the reflex point, perhaps the 5 wave move is over, and we are in wave 2 of the larger C down. We need to keep the bigger picture in mind. As my current view is we are going down a lot more, a recovery past the reflex point will merely serve to delay the commencement of the next sell off. Suppose we dont get a recovery beyond the reflex point, it will only be all the more bearish, i suppose! In anycase, EWP is a very dynamic and hands-on way to deal with the market, and what I have given you all is a bunch of tools. Using a hammer in place of a spanner would sometimes not produce the best results!
With regards to rumors today (and subsequent sudden spikes/rally in the US markets) about co-ordinated effort by central banks across the world to flood more money, do you still believe the market is going down from here and not up, in the short-term? What is your opinion based on today’s headlines – was that a another short pump before the dupm, a head fake, a bull-trap?
Hi Mike, with the Greek election this weekend, a lot of position adjustments will happen. We could see 1358 in the process, but I don’t recommend a position over such an important event. We can always get back into the markets later.
Mike, Sorry I couldnt respond sooner.I am doubtful if the index will go directly above 1360. I dont pay too much attention to the headlines unless the markets make a dash in any one direction.
Hi Ramki,
Have read your book several times now and am referring to it daily as I practice the art of counting in Elliot waves. I have a question about failed or truncated 5th waves & the S&P. As it was being debated whether wave 4 of c of big B had finished and therefore where the finish points of wave 5 of c would be. Could the S&P move to 1415 in April be labelled a failed 5th? How would this count continue after? Would you start counting big C from that end point of failed 5th if you were to label it so? A bit confused how to proceed count after labelling a failed 5th. Any comments most gratefully appreciated.
Kind regards,
James Poustie
James, It is very difficult to coach individually and I hope you will understand. But briefly, just about ANY count is possible. So if you decide to count 1415 as a failed 5th wave, fine. Stick with it. In that case you got a 5 wave downmove from 1415, which will be a new wave 1 down. With that count, you can allow a 100% recovery back to 1415 (but not above) for the bearish view to workout. This is what I want you to learn from my book. To know how to interpret the market using YOUR OWN counts, and not someone else’s. Good luck
hi mr ramki, im getting 1354 sep futures as target for top from hourly chart and 10 minute using your methhod. here is my 10 min count so far http://tinypic.com/r/wqzmro/6
thanks, nadir
I am a bit confused about the recent action in the s&p 500. I see that the correction (wave 2 of big C) started at around 1260 earlier this month. Then we got a dip from 1347 to 1308 which could be wave b of wave 2. Now, we are seeing the s&p at almost 1350 which can be wave c of wave 2. But, should wave c be atleast equal in length to wave a? If so, the minimum target for wave c should be around 1395.
So, i am thinking that we should see the s&p move down from here to around 1300 where wave c of wave 2 will start and take it up to around 1395.
Hi Karan, The possible measures of a C wave have been explained in my book. Suggest you revise that chapter. Generally you seem to be on the right track
Cheers Ramki,
As always most appreciated. Have a count & a plan using the rules of the book as well as what you mentioned the original article. My thinking is along the lines of Karan. Will be saving placing the shorts until I have clearly seen this (possible) c rally come to an end. Take care.
James
One important question, pls correct me if i am wrong, is there any ongoing diagonal triangle in corrective wave C shaping up after down impulse wave 1 from 1420 to 1260. pls reply sir….. Thanks
You have given good idea for Reliance Communication.Whether it is possible for you to give similar good companies from India were one should keep an watch.Secondly when will be Best time to Invest(Not Trading) in India market when there is total Doom & Gloom.Some say it will be in 2013 OR 2015.
Hi Manoj, thank you for writing. I created wavetimes to share my knowledge. At present I am not giving any trading or investemt advice on this blog. Everything here is for free and for giving you an idea of how to deal with the markets safely and profitably. Good luck
One important question, pls correct me if i am wrong, is there any ongoing diagonal triangle in corrective wave C shaping up after down impulse wave 1 from 1420 to 1260. pls reply sir….. Thanks
looking at the hourly futures es chart, i see 5 wave move down completed. we got tiny wave 1. wave 3 extended a lot by 4.236! of wave 1. we had wave 4 retracing 38.2% and wave 5 was 61.8% of wave 1 to 3. for the coming wave 2, we should get a three wave up move retracing 50 to 61.8% of this drop. my question, does this look correct to you. where do you think we are in the spx? is this the start of a deep correction or will this move down get completely retraced in the coming days somehow. thanks
Hi Nadir, you seem to have done your homework well. Without looking at the charts I can suggest you one thing. Trade your view. Have your stops. Add as it moves in your direction. Manage your positions actively, but dont take profits too soon. That is the only way to make money. By the way, revise the chapter about 3rd waves in my book and you will feel more comfortable.Good luck.
i lost money! my mistake was counting it as 5 wave down when it was only a 3 waver. the 5 waves didn’t channel very well.
this new impulse wave developing an exended 5th wave as i write this. it should reach a target of 1390 which is 100% of waves 1 and 3. wave 3 was 1.618 of 1 and we had an irregular wave 4 i believe
thanks again, looking forward to your new book
nadir
Hi Nadir, sorry to hear of your loss. What Elliott Wave offers is a method to keep your losses small, to identify low-risk trades. Taking losses is a given for any trader. I have taken quite a few in my career. The idea is to keep trading using your techniques and your profitable trades will soon take you far ahead. Good luck
Does this run up on the S&P change your thoughts on the big move down. What would be critical targets to suggest we are wrong and the market could still continue up. thank you
32 Comments
Hi Ramki-
I have recently stumbled onto your site and purchased your ebook. First, thank you for providing a window to your thoughts and your excellent ebook. I’ve read other publications on EW and thought yours was a great addition.
With regards to the current movement in the S&P, I too have counted a very clear five waves down. The recent rally unfolded in five waves (in my opinion) which included a gap as well and we are currently headed sharply downwards.
My question is this: when a correction ensues, which is what I (and I think you) believe to be happening from the recent lows, if we are in fact seeing five waves up (where price topped at about 1350) how do we know if this is A of an ABC or possibly the entire ABC correction? It reached beyond the 50% fib level from the entire move down (1420’ish – 1250’ish) so it’s plausible that the correction completed (if it’s a wave 2) but what would be the clue that it needs to continue traveling higher to finalize the correction?
I know if we get five waves up for an A we should expect a shallow B wave and a zigzag to finalize the corrective move. But are there other clues as to when the correction has finalized (it’s easy to jump into what I’m calling my A wave and count an ABC correction on a smaller time frame, hence my confusion)?
Thank you for your thoughts!
Fxamro, You are asking some very important questions. After you have had a chance to read several of my old posts on WaveTimes you will come to appreciate that my approach to the markets is more hands-on. The goal of EW is to make money. We should also bear in mind that when we are applying our theory to a live market (ie not making hindsight calls), several counts will seem equally possible. So it comes to making a judgement call. After that, we have to stick with our call until proved wrong. I think the recovery was a 5 wave move, which means it could have been either a C wave of an irregular 4th , or we just posted an A wave, and we will get a C wave up later on.From a trading perspective, I would wait a bit before risking money here. Perhaps we will get a tiny 5 wave down, in which case one can sell a pull back with a stop above the 1335 high? But that becomes too intraday for most people. So it is better to sit out for a clear 3 wave recovery to happen and then sell with suitable stops. NOt sure if I ansered all your questions… typically these are best explained in a seminar!
Thank you for your reply, Ramki. You have sufficiently provided answers for the time being. I look forward to your continued updates!
Good Morning Dear Ramki, simple and accurate analysis of the stock market rally. I have read your book -5 Ways to Financial Freedom for about 5 times till now and practice it daily on the EOD charts. Still learning and every time I read it seems that I am reading it for the first time and dont feel fully confident to apply it practically.
Also it would be great of you to share your views on the Indian markets.
Should I follow the same guideline as for the S&P as the Indian makets tend to follow the U.S. Markets. I am confused , and I hope you shall be able to guide me.
Thanks and regards.
HI Dr Sanjay, Thank you vm for your comments. While stock markets do tend to take cues from each other, there are regional considerations to take into account. It is best to analyze them separately using the techniques you are learning from the book. It might surprise you, but even I go back and read my own book once in a while because in addition to having the knowledge, we need to reassure ourselves of the underlying harmony in the markets. I am sure you do the same with your medical books.
Hi Ramki,
Thanks for the analysis. I am wondering if we should be too strong to expect the wave 3 after this correction, or a wave C. The reason I am saying this is that, there is a less talked about probability of this (major count) being a correction to first wave that started back in oct 2011. If that is the case, we may just get a C wave before turning sharply higher that is going to befuddle a lot of bears.
Shiva
Hi Shiva, Thanks for the comment. One of the points I make in my lectures is to avoid reading too many people. That will only serve to throw the trader off the track. As just about anything could happen in the market, and we acknowledge that fact, we should stick with our own counts until they are proved wrong. The key is to know where one will be wrong, and to enter teh market where that critical level gives you an affordable stop!
Hi Ramki
I asked about reflex points the other day – thank you for your prompt reply.
On you chart of the S&P discussed above, is top of wave 4 your reflex point?
I am also thinking like fxamro, so thinking that this corrective sequence may only reach the 1334 level??
Warm regards
Steve
Steve, I love it when people ask interesting questions such as yours. There are two approaches to this matter. If we get past the reflex point, perhaps the 5 wave move is over, and we are in wave 2 of the larger C down. We need to keep the bigger picture in mind. As my current view is we are going down a lot more, a recovery past the reflex point will merely serve to delay the commencement of the next sell off. Suppose we dont get a recovery beyond the reflex point, it will only be all the more bearish, i suppose! In anycase, EWP is a very dynamic and hands-on way to deal with the market, and what I have given you all is a bunch of tools. Using a hammer in place of a spanner would sometimes not produce the best results!
Hi Ramki,
With regards to rumors today (and subsequent sudden spikes/rally in the US markets) about co-ordinated effort by central banks across the world to flood more money, do you still believe the market is going down from here and not up, in the short-term? What is your opinion based on today’s headlines – was that a another short pump before the dupm, a head fake, a bull-trap?
Thanks,
Mike
Hi Mike, with the Greek election this weekend, a lot of position adjustments will happen. We could see 1358 in the process, but I don’t recommend a position over such an important event. We can always get back into the markets later.
Mike, Sorry I couldnt respond sooner.I am doubtful if the index will go directly above 1360. I dont pay too much attention to the headlines unless the markets make a dash in any one direction.
Hi Ramki,
Have read your book several times now and am referring to it daily as I practice the art of counting in Elliot waves. I have a question about failed or truncated 5th waves & the S&P. As it was being debated whether wave 4 of c of big B had finished and therefore where the finish points of wave 5 of c would be. Could the S&P move to 1415 in April be labelled a failed 5th? How would this count continue after? Would you start counting big C from that end point of failed 5th if you were to label it so? A bit confused how to proceed count after labelling a failed 5th. Any comments most gratefully appreciated.
Kind regards,
James Poustie
James, It is very difficult to coach individually and I hope you will understand. But briefly, just about ANY count is possible. So if you decide to count 1415 as a failed 5th wave, fine. Stick with it. In that case you got a 5 wave downmove from 1415, which will be a new wave 1 down. With that count, you can allow a 100% recovery back to 1415 (but not above) for the bearish view to workout. This is what I want you to learn from my book. To know how to interpret the market using YOUR OWN counts, and not someone else’s. Good luck
My guess is this is five of C
A little early to tell ,but I’ll say 1439,
1370 at least.
Not going to put any money on it though. lol
hi mr ramki, im getting 1354 sep futures as target for top from hourly chart and 10 minute using your methhod. here is my 10 min count so far http://tinypic.com/r/wqzmro/6
thanks, nadir
Hi Nadir, I strongly recommend that you read my book all over again as your labelling doesnt follow the methods I have taught
Hi Ramki,
I am a bit confused about the recent action in the s&p 500. I see that the correction (wave 2 of big C) started at around 1260 earlier this month. Then we got a dip from 1347 to 1308 which could be wave b of wave 2. Now, we are seeing the s&p at almost 1350 which can be wave c of wave 2. But, should wave c be atleast equal in length to wave a? If so, the minimum target for wave c should be around 1395.
So, i am thinking that we should see the s&p move down from here to around 1300 where wave c of wave 2 will start and take it up to around 1395.
As always, your comments are much appreciated.
Regards,
Karan
Hi Karan, The possible measures of a C wave have been explained in my book. Suggest you revise that chapter. Generally you seem to be on the right track
Cheers Ramki,
As always most appreciated. Have a count & a plan using the rules of the book as well as what you mentioned the original article. My thinking is along the lines of Karan. Will be saving placing the shorts until I have clearly seen this (possible) c rally come to an end. Take care.
James
Ramki Sir,
One important question, pls correct me if i am wrong, is there any ongoing diagonal triangle in corrective wave C shaping up after down impulse wave 1 from 1420 to 1260. pls reply sir….. Thanks
You have given good idea for Reliance Communication.Whether it is possible for you to give similar good companies from India were one should keep an watch.Secondly when will be Best time to Invest(Not Trading) in India market when there is total Doom & Gloom.Some say it will be in 2013 OR 2015.
Hi Manoj, thank you for writing. I created wavetimes to share my knowledge. At present I am not giving any trading or investemt advice on this blog. Everything here is for free and for giving you an idea of how to deal with the markets safely and profitably. Good luck
ramki sir,
One important question, pls correct me if i am wrong, is there any ongoing diagonal triangle in corrective wave C shaping up after down impulse wave 1 from 1420 to 1260. pls reply sir….. Thanks
Ankur, afraid i dont see such a formation
looking at the hourly futures es chart, i see 5 wave move down completed. we got tiny wave 1. wave 3 extended a lot by 4.236! of wave 1. we had wave 4 retracing 38.2% and wave 5 was 61.8% of wave 1 to 3. for the coming wave 2, we should get a three wave up move retracing 50 to 61.8% of this drop. my question, does this look correct to you. where do you think we are in the spx? is this the start of a deep correction or will this move down get completely retraced in the coming days somehow. thanks
Hi Nadir, you seem to have done your homework well. Without looking at the charts I can suggest you one thing. Trade your view. Have your stops. Add as it moves in your direction. Manage your positions actively, but dont take profits too soon. That is the only way to make money. By the way, revise the chapter about 3rd waves in my book and you will feel more comfortable.Good luck.
i lost money! my mistake was counting it as 5 wave down when it was only a 3 waver. the 5 waves didn’t channel very well.
this new impulse wave developing an exended 5th wave as i write this. it should reach a target of 1390 which is 100% of waves 1 and 3. wave 3 was 1.618 of 1 and we had an irregular wave 4 i believe
thanks again, looking forward to your new book
nadir
Hi Nadir, sorry to hear of your loss. What Elliott Wave offers is a method to keep your losses small, to identify low-risk trades. Taking losses is a given for any trader. I have taken quite a few in my career. The idea is to keep trading using your techniques and your profitable trades will soon take you far ahead. Good luck
Does this run up on the S&P change your thoughts on the big move down. What would be critical targets to suggest we are wrong and the market could still continue up. thank you
Hi Sebastian, No. I haven’t changed my mind in the big picture. We could get to see 1432, but I will be very careful there
thank you..