The first thing that you learn from EWI is that their technique only provides context for the current price developments, that you cannot use it to trigger buy/sell signals, which is left to classical technical analysis and the same risk and money management methods that you may already employ. The method is supposed to bring up the more likely scenarios of future price patterns, provided that your former pattern interpretation is solid and stable.
Elliott Wave International will also tell you that their technique often gives way to multiple interpretations of the ongoing pattern. In quite a number of instances though, that uncertainty extends to more than one year in the past! As of the end of January 2018 their analysts still cannot stabilize the Elliott interpretation for Silver, and have been moving through various counting schemes for long periods, at times not being able to utter an opinion for months because of multiple possible interpretations. As we speak they have an Elliott wave blank in counting the July 2016-January 2017 price chart for Silver, because the January-2017-to-present period still has an uncertain, hypothetical interpretation that may change (once more) the history of the counting, back to July 2016 (don't mind what was before).
The method also proclaims that waves have a fractal behavior (i.e. one degree wave can be decomposed in a sequence of lower degree waves that follow the same rules and guidelines that apply for any degree wave). If that were the case, then one has to wonder, what prevents the Elliott Wave International experts from stabilizing the interpretation of the 2016 Silver patterns? 18 months, still not enough time to analyze the minuette degree waves?
Again we are talking about a system that cannot issue higher probability suggestions for the future unless the interpretation of past patterns is clear and stable.
What value can one put on this technique while knowing that it might offer no certainty of interpretation for months and months into the past? How could one derive any benefits from it when the pattern interpretation of the past - back to mid 2016 for Silver in this example, may change (or continue to change) according to what will happen in the near future, 18 months later?
It is nothing but a vicious circle that can and does occur for long time intervals, rendering the technique useless if not downright harmful. Just be aware of this major drawback.
Your subjective pattern interpretation might work only when there is a crystal clear, stable interpretation of the past. Some securities will offer that at times. On the other hand, dealing with the numerous rules and guidelines of the method, as well as with its forever unclear "exceptions", cannot but dramatically increase the probability of misinterpretation. The fact that the "experts" cannot make sense of the method for such a long time in the case of Silver, is telling. You have to ask yourself how you might compare to those that are in the business of counting waves for 30 years or more (not that they are more useful than your own tricks in the Silver example).
The method has the ability to create multiple failures of interpretation, in series, for long periods. That will certainly be more costly than using other methods. It is one of the reasons why the EWI experts will recommend relying as heavily on Commitment of Traders, Daily Sentiment Index etc indicators, as guides relevant to correctly identifying zones of wave pattern extremes. Nonetheless these additions will not prevent the long term interpretation "blackouts" described above.
just want to add that the same story dates back to 1987
after claiming to have predicted the 1987 crash (some say caused), EWI's main count was bearish and wrong for the past 25+ years os of today 2015-09-04
I am loathe to admit I have been a subscriber to Elliot Wave International's analysis newsletters for a number of years. I have spent thousands of dollars on their anaylsis.
They are not dishonest. They are just wrong most of the time. Then, they only brag about the few times they were right.
Perspective: During all that is outlined below, EWI (Elliot Wave International) has maintaned the position that March 2009 bottom was a first step in a massive bear market that would eventually draw the DJIA to lows near 400. That is not a typographical error. 400.
I recommend you pull up a long term chart of the DJIA and check the dates of these forecasts against the chart.
*On June 11 2009 they they wrote in the Elliot Wave Theorist: ""The partial recovery is already maturing.""
*On July 17 2009 the Elliot Wave theorist headlined: ""The bounce is aging, but the depression is young.""
I dropped the subscription for a few years.
*In December 2011 the Elliot Wave Financial Forecast wrote: ""BOTTOM LINE: The stock market started the next significant phase of its long term bear market back on May 2, when the DJIA pushed to a high at 12,876 then reversed lower."" In the same paragraph, ""The most recent push should roll over into a broad based selloff that draws all equity indexes lower.""
*In December 2011 the Elliot Wave Theorist wrote: It took a while, but every market is going our way."" In the same issue, they said ""If the market tries to bounce during the traditionally strong late december Early January period, any rally should stay in the context of a bear market.""
*On Jan 5 2012 the Elliot Wave Financial Forecast wrote: ""The rally's upward momentum is waning..."" and ""the end of this counter trend push should lead to the next major wave down, with nearly every sector participating in the selloff.""
*On Jan 20 2012 the Elliot Wave Theorist headlined: ""CENTURY-LONG TRENDS ARE ROLLING OVER""
On Feb 17 the Theorist admitted, ""On Jan 10, EWT recommended speculators sell short the S&P with maximum leverage."" Look at a chart to see how that turned out.
Around Feb 21 Theorist-advised investors were stopped out of a leveraged short position on gold.
*On March 1 2012 the Elliot Wave Financial Forecast said: ""BOTTOM LINE - The stock market's rally is tiring..."" then went on to prove they were going to be right. They were wrong yet again.
*On Mar 14 2012, the Theorist recommended, ""Speculators should return to short the S&P with maximum leverage."" 6 months later, the markets broke decisively to new highs, and the Elliot Wave bears were again forced to modify their wave counts. I never saw an exit recommendation, but they had a stop around S&P 1490.
*On March 29 2012 the Elliot Wave Financial Forecast said: BOTTOM LINE The stock market is at or very near the end of its long counter-trend rally..."" Later in that issue, ""A compelling sign of a reversal into the next leg of the big decline is surfacing of the survivor motif in ... The Hunger Games.""
It goes on like this ad nauseum, until I finally terminated the subscription in September 2013. If you want to gamble on the markets tyou don't need to pay these guys hundreds of dollars a month to lose money.
Elliot Wave International Reviews
Major drawbacks
The first thing that you learn from EWI is that their technique only provides context for the current price developments, that you cannot use it to trigger buy/sell signals, which is left to classical technical analysis and the same risk and money management methods that you may already employ. The method is supposed to bring up the more likely scenarios of future price patterns, provided that your former pattern interpretation is solid and stable.
Elliott Wave International will also tell you that their technique often gives way to multiple interpretations of the ongoing pattern. In quite a number of instances though, that uncertainty extends to more than one year in the past! As of the end of January 2018 their analysts still cannot stabilize the Elliott interpretation for Silver, and have been moving through various counting schemes for long periods, at times not being able to utter an opinion for months because of multiple possible interpretations. As we speak they have an Elliott wave blank in counting the July 2016-January 2017 price chart for Silver, because the January-2017-to-present period still has an uncertain, hypothetical interpretation that may change (once more) the history of the counting, back to July 2016 (don't mind what was before).
The method also proclaims that waves have a fractal behavior (i.e. one degree wave can be decomposed in a sequence of lower degree waves that follow the same rules and guidelines that apply for any degree wave). If that were the case, then one has to wonder, what prevents the Elliott Wave International experts from stabilizing the interpretation of the 2016 Silver patterns? 18 months, still not enough time to analyze the minuette degree waves?
Again we are talking about a system that cannot issue higher probability suggestions for the future unless the interpretation of past patterns is clear and stable.
What value can one put on this technique while knowing that it might offer no certainty of interpretation for months and months into the past? How could one derive any benefits from it when the pattern interpretation of the past - back to mid 2016 for Silver in this example, may change (or continue to change) according to what will happen in the near future, 18 months later?
It is nothing but a vicious circle that can and does occur for long time intervals, rendering the technique useless if not downright harmful. Just be aware of this major drawback.
Your subjective pattern interpretation might work only when there is a crystal clear, stable interpretation of the past. Some securities will offer that at times. On the other hand, dealing with the numerous rules and guidelines of the method, as well as with its forever unclear "exceptions", cannot but dramatically increase the probability of misinterpretation. The fact that the "experts" cannot make sense of the method for such a long time in the case of Silver, is telling. You have to ask yourself how you might compare to those that are in the business of counting waves for 30 years or more (not that they are more useful than your own tricks in the Silver example).
The method has the ability to create multiple failures of interpretation, in series, for long periods. That will certainly be more costly than using other methods. It is one of the reasons why the EWI experts will recommend relying as heavily on Commitment of Traders, Daily Sentiment Index etc indicators, as guides relevant to correctly identifying zones of wave pattern extremes. Nonetheless these additions will not prevent the long term interpretation "blackouts" described above.
confirming EWI review
just want to add that the same story dates back to 1987
after claiming to have predicted the 1987 crash (some say caused), EWI's main count was bearish and wrong for the past 25+ years os of today 2015-09-04
I am loathe to admit I have been a subscriber to Elliot Wave International's analysis newsletters for a number of years. I have spent thousands of dollars on their anaylsis.
They are not dishonest. They are just wrong most of the time. Then, they only brag about the few times they were right.
Perspective: During all that is outlined below, EWI (Elliot Wave International) has maintaned the position that March 2009 bottom was a first step in a massive bear market that would eventually draw the DJIA to lows near 400. That is not a typographical error. 400.
I recommend you pull up a long term chart of the DJIA and check the dates of these forecasts against the chart.
*On June 11 2009 they they wrote in the Elliot Wave Theorist: ""The partial recovery is already maturing.""
*On July 17 2009 the Elliot Wave theorist headlined: ""The bounce is aging, but the depression is young.""
I dropped the subscription for a few years.
*In December 2011 the Elliot Wave Financial Forecast wrote: ""BOTTOM LINE: The stock market started the next significant phase of its long term bear market back on May 2, when the DJIA pushed to a high at 12,876 then reversed lower."" In the same paragraph, ""The most recent push should roll over into a broad based selloff that draws all equity indexes lower.""
*In December 2011 the Elliot Wave Theorist wrote: It took a while, but every market is going our way."" In the same issue, they said ""If the market tries to bounce during the traditionally strong late december Early January period, any rally should stay in the context of a bear market.""
*On Jan 5 2012 the Elliot Wave Financial Forecast wrote: ""The rally's upward momentum is waning..."" and ""the end of this counter trend push should lead to the next major wave down, with nearly every sector participating in the selloff.""
*On Jan 20 2012 the Elliot Wave Theorist headlined: ""CENTURY-LONG TRENDS ARE ROLLING OVER""
On Feb 17 the Theorist admitted, ""On Jan 10, EWT recommended speculators sell short the S&P with maximum leverage."" Look at a chart to see how that turned out.
Around Feb 21 Theorist-advised investors were stopped out of a leveraged short position on gold.
*On March 1 2012 the Elliot Wave Financial Forecast said: ""BOTTOM LINE - The stock market's rally is tiring..."" then went on to prove they were going to be right. They were wrong yet again.
*On Mar 14 2012, the Theorist recommended, ""Speculators should return to short the S&P with maximum leverage."" 6 months later, the markets broke decisively to new highs, and the Elliot Wave bears were again forced to modify their wave counts. I never saw an exit recommendation, but they had a stop around S&P 1490.
*On March 29 2012 the Elliot Wave Financial Forecast said: BOTTOM LINE The stock market is at or very near the end of its long counter-trend rally..."" Later in that issue, ""A compelling sign of a reversal into the next leg of the big decline is surfacing of the survivor motif in ... The Hunger Games.""
It goes on like this ad nauseum, until I finally terminated the subscription in September 2013. If you want to gamble on the markets tyou don't need to pay these guys hundreds of dollars a month to lose money.