Finding the Market’s Mojo

Finding the Market’s Mojo

To follow a trend, once it has begun, or to anticipate a trend in advance of its start, are two opposite approaches that speculators consider.  In order to improve my edge, I continually look for ways to reconcile  the different analytical types.

Curiously, I often use the Elliott Wave Principle to liaison my trend analysis with my trend forecasting procedures. I say curiously, because Elliott is somewhat of a hybrid between predictive and descriptive. In fact it is one of the finest market descriptive models I know.  The picture below indicates the basic premise of the Elliott Wave model.

big wave surTherefore, why not let (at least in a global sense) the basic pattern above, serve as an indication as to the market’s primary trend, either up or down? Simply stated by observing a price chart of whatever market your tracking, ask the question, does it appear to be in a wave (i) or a wave (ii), as related to the side diagram. This simple procedure could at least provide an initial assessment of what I designate to be the market’s primary trend. All other techniques, be they descriptive or predictive could follow from there. Ultimately the trader, more often than not will have a keener sense of the “primary” trend and their relative positioning.

A detailed description of the analytical procedures I use to integrate the predictive with the descriptive will be presented during my next webinar presentation on Thursday, March 27 at 3:30 Pacific time.


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