Articles
Using Elliot Wave Theory to Analyze the Stock Market
Elliot Wave - Some market technicians that use technical analysis to look for a nearing market bottom or market top have noticed over the past several years that the stock market will consistently move in a 5 wave pattern which is based on concepts from Elliott Wave Theory. When the stock market is trending upward a 5 wave pattern consists of 3 separate moves upward and 2 separate moves downward before a top occurs. Meanwhile when the stock market is trending downward a 5 wave pattern consists of 3 separate moves downward and 2 separate moves upward before a bottom occurs.
Let’s take a look at the Nasdaq and S&P 500 and analyze their one year charts using concepts from Elliot Wave Theory. Notice how both the Nasdaq and S&P 500 made a bottom in late July of 2002 (points A) and then made 3 separate moves upward (A to 1, 2 to 3 and 4 to 5) followed by 2 separate moves downward (1 to 2 and 3 to 4) before topping out in late August after completing a 5 wave pattern. Read On …….
Comments
No comments yet.
RSS feed for comments on this post.
Leave a comment
Sorry, the comment form is closed at this time.
