Occult Geometries & Alternate #elliottwave Count | #Forex

2014年8月28日

Traders,

Having spent a significant amount of time recently demonstrating T.S. Hennessy's new and alternate Elliott Wave count, I also demonstrate the application of several techniques I offered to further simplify the counts.

First, as you may recall, we discussed having to pre-define ahead of the current price action a level at which price would likely reverse. We suggested the use of Fibonacci, cast into the future at a 1.618 extension value.

Given this speculative forecast value, we then agreed to let price run its course as it would move closer to the Fib forecast 1.618 value.

As explained by T.S. Hennessy in his widely circulated ebook, he recommend that a sequence of 1-2-3-4a-4b-4c-1-2-3-4a-4b-4c-1-2-3-... be marked along the impulse. The condition was a higher timeframe would be used to better identified whether the sequencing was effected over an impulse, in which case, the exercise would have to be initiated over the last Wave of the impulse, namely the 5th wave, or whether the sequencing was effected over a correction, in which case, the exercise would have to be initiated over the last wave of the correction, namely Wave-C.

The importance of dedicating this exercise precisely over these wave segments is that it would ensure that once reached at its tip-most end, it would help determine a reversal level and increase the likelihood that a price departure from this terminal point would allow the trader to ride a counter-trend wave with significant tailwind, as price would turn from an impulse to a correction, or vice-versa, a correction to an impulse, affording the longest trader opportunity available.


In the EURCAD chart, I have posted a progressive sequencing of this Hennessy application, being careful to separate each 1-2-3-4a-4b-4c simplified into 1-2-3-A-B-4C as indicated in Mr. T.S. Hennessy's book.

What you now have is an ever shrinking sequence of the same module, seeking to express itself in the same fractal construct, but at ever decreasing space.

For your easy of discerning what is occurring, I have also added a few observation which I will develop next, that should facilitate in your handling of the modules, as well as the enumeration of each sequence:

1 - Note first and foremost that there is no such a thing in this methodology as a extension, or an exception to the simple sequencing of 1-2-3-A-B-4C. This is an important matter brought up by Hennessy, as it simply gets rid of all and any exception rule that often deflate the motivation of junior traders to learn how to count waves.

2 - Also indicated in the book it should be a matter of mere observation to realize that all 4C waves terminate in a visible spike.

What follows are now my additional rules, which I have developed via mere observation of simple geometries:

3 - ALL 4C waves are transected by a trendline that up to that point were acting as major overhead trendline is the case of a declining study, or supportive trendline in the case of a rising study - Here, the overall motion is down, so we are dealing with a declining study, where ALL trendlines from Point-2 foreward will first act as resistance then turn support AFTER Wave 4C transection at its midpoint.

4 - Wave-3 is an elongated zig-zag, whose sig-zag point is typically found at the symmetrical mid-point of the wave.

5 - Point-4C tends to rally back to the level of its modular Point-A

6 - This entire sequence of modular enumeration combined with rules 3, 4 and 5 will terminate at a level predefined by a Fib projection at a higher timeframe, so as to best approximate where this modular sequence should end.

7 - The entire sequencing from start to finish will be called WAVE REDUCTION, a name I though appropriate since it reflect the context and purpose of the exercise.

If you are interested in learning more about this, feel free to visit the three rooms where I post daily LIVE examples of this application.

Cheers,


David Alcindor
Predictive Analysis & Forecasting