Figure 2-10 Forecasting price move from point B
to point C not possible.
Nature's law and human
behavior. This is what we try to measure in the market swings. While the
Fibonacci ratio is constant, the wave count is confusing.
By studying Elliott's
publications carefully, a rule with forecasting value can be identified as "A
cyclical pattern or measurement of mass psychology is 5 waves upward and 3
waves downward, total 8 waves. These patterns have forecasting value—when 5
waves upward have been completed, 3 waves down will follow, and vice versa" .
We could not agree more with
this statement. Most likely, Elliott did not realize that his strategy had
taken a complete shift. Elliott tries to forecast a price move from point B
to point C based on market patterns. We consider this impossible, and Elliott
has never given a rule that showed that he was able to do this mechanically
(Figure 2-10).
Elliott's latest statement
takes exactly the opposite strategy. Instead of forecasting a price move from
point B to point C, he waits to the end of a 5-wave move,
because 3 waves in the opposite direction can be expected (Figure 2-11).
