Feb 082016
 

The global stock market is so vast that the more eyes there are to spot the approaching end of a five-wave pattern, the better off we are! I should thank Bob D for drawing my attention to Freeport-McMoran Inc (FCX) -NYSE. The following discussion covers the Elliott Wave analysis of this stock. You will see how the various twists and turns in FCX were all following the dictates of the Elliott Wave Principle.

When we commence the analysis of any instrument, it is always better to start with the bigger picture. So we commence our study with the weekly chart of FReeport-McMorRan Inc.You got to remember that the goal of any analysis is to provide you with a framework to base your investment or trade. Such a framework will give you an orderly way to approach the market. It doesn’t guarantee you profits, but you will know quite early whether you are on the right track or not, and that knowledge alone is well worth the time you invest in this process. So lets get started with our first Elliott Wave chart. I suggest that you keep opening each chart in a new tab to save you time.

On 20 January 2016, FCX made a low of $3.52. We see from the chart below that a complex correction has developed from the high near $61, probably unfolding as a double zigzag. The end of the second zigzag was projected to land at a 138.2% projection just a shade above the $4 mark. Perhaps the 3.52 low marked the end of this major correction?

FCX4Feb2016a

Now let us quickly go down to the more recent moves. Notice the green arrow in the chart above? I suggest we start our next wave count from there, as it looks like a pivot point.Two things stand out clearly. We can make out a set of five waves from near the $24, and to our delight, there is a further set of 5 minor waves inside the fifth wave that is quite clear.

FCX4Feb2016b

In order to give us more comfort that about this fifth wave, we will delve deeper to see if the waves hold some Fibonacci ratio relationship to each other. The chart below shows that sub wave ii corrected the sub wave i by 50%

FCX4Feb2016c

Next we see that the sub wave iii was extended. An extension is when an impulse wave travels more than 161.8% (Note: this is my own interpretation of when to label a wave as extended). In this case, sub wave iii went as far as 223.6% of wave i.

FCX4Feb2016d

You might remember from your reading of my book ‘Five Waves to Financial Freedom” that when a third wave is extended, it is normal for the fourth wave to be short and typically correct to just 23.6% of the just completed third wave. You can see from the Elliott wave chart of Freeport-McMoRan Inc below that sub wave iv went exactly to the 23.6% retracement target. This sort of reinforces the feeling that we are on the right track!

FCX4Feb2016e

And finally, we see that the fifth wave was exactly 50% of the distance from the point ‘0’ or the starting point of subwave i to the terminal point of subwave iii. This is again quite text-book-like, and is something to be looked at in wonderment!

FCX4Feb2016f

I leave you with two more charts for careful consideration. My Elliott Wave comments are on the charts themselves. Remember, this blog aims to teach you some of my methods. I am not making a recommendation here. But if you are patient, and if you can identify 5 waves up from the bottom, then buying into a 50% to 61.8% pull back is a most logical thing to do, especially if you are a believer that Elliot Wave Principle works! In case you are not convinced, simply look at the hundreds of other examples in this blog! All the best.

FCX4Feb2016g

FCX4Feb2016h

Dec 202015
 

In this post you will learn how to trade Chipotle (NYSE:CMG) using Elliott Wave analysis. I had sent these charts to members of the exclusive club on November 24, 2015 when the stock was around $559.The main idea was there was a good chance for a move lower after recovering to around $585. The stock reached $585.80 the following day. It moved slightly above 585 on December 1 and 2, but on both days it closed below $585. And then we got a 12% move down to $515 on 7 Dec.

This blog aims to share some of my techniques with you, so you too could refine and improve your trading style. Used in conjunction with my book “Five Waves to Financial Freedom” the numerous charts that are presented in WaveTimes will open your eyes to what is possible using Elliott Waves. Enjoy and share with your friends.

Chipotle Mexican Grill in Wave 2
Chipotle Mexican Grill in Wave 2

Chipotle Mexican Grill in Wave 4
Chipotle Mexican Grill in Wave 4

Chipotle Mexican Grill reaches Elliott Wave 5 target
Chipotle Mexican Grill reaches Elliott Wave 5 target

Chipotle Mexican Grill sub waves illustrated
Chipotle Mexican Grill sub waves illustrated

Chipotle Mexican Grill reaches target of sub wave 5 inside wave 5
Chipotle Mexican Grill reaches target of sub wave 5 inside wave 5

Analysis of Chipotle Mexican Grill stock after a five wave move is completed
Analysis of Chipotle Mexican Grill stock after a five wave move is completed

Dramatic wave 3 in Chipotle
Dramatic wave 3 in Chipotle

Witness how a day trader can benefit from Elliott Waves using Chipotle stock as an example
Witness how a day trader can benefit from Elliott Waves using Chipotle stock as an example

See how Elliott Waves and Fibonacci ratio analysis tie in using Chipotle Stock as an example
See how Elliott Waves and Fibonacci ratio analysis tie in using Chipotle Stock as an example

How to anticpate the next move in Chipotle using Elliott Wave Analysis
How to anticpate the next move in Chipotle using Elliott Wave Analysis

Nov 232015
 

As many of you know, I also have a professional website which caters to the needs of high net-worth individuals and experienced traders. This website is at www.wavetimes.net. I have today posted an example of a consulting assignment in that website, and thought that you will appreciate a link to that post.

http://wavetimes.net/news-20151123-recent_consulting_outcomes

I will try and post a few more examples in the coming weeks for your learning. This blog is a living book, an extension of Five Waves to Financial Freedom [ or vice versa :) ]. Enjoy!

Nov 062015
 

I will post you a couple of charts that I prepared for my old friend Bob D (remember the person who gave me so much of his valuable time in proof reading your favorite book, Five Waves to Financial Freedom?)
With Elliott Waves, you should never struggle to count the waves. When it becomes hard, just step back and look at the bigger picture. The best trades are done when you are able to see the waves easily and clearly, while the rest of the world is stressing out about the next few points. You, on the other hand, having read and understood my way of approaching the market, would place your bids or offers near the anticipated targets and wait for the fruit to land on your lap! Of course, occasionally you will get a lemon, but often enough it will be a sweet fruit.

Here are the Elliott Wave charts of WalMart. The second chart shows the third wave in detail. As I point out, you really don’t need to go very deep! Just keep it simple. All the best.

The Fifth Wave of Wall Mart has met its initial target

The Fifth Wave of WalMart has met its initial target

Each impulse wave is made up of five sub waves

Sub waves inside the third wave of WalMart

Sep 052015
 

Elliott Wave analysis works in all freely traded markets. The last time I offered you my Elliott Wave analysis of Egypt’s equity index, EGX30, it was back in August 2012. You can access that blog post by looking at the menu at the top of WaveTimes, under ‘Equities, Index, Africa, Egypt’.
You will see how we identified that the Egyptian index was likely to make significant gains. At that time, the index was trading at 5049. A lot of water has since flown down the Nile, but the Egyptian stock market almost doubled. I am sure a lot of investors made handsome profits in individual stocks.
However, the inevitable Elliott Wave correction set in once the five wave cycle was completed. If you had read my book Elliott Wave book “Five Waves to Financial Freedom’ you will be able to spot how so many of the observations there has played out in the Egyptian Stock Index or EGX30 index.

In the following Elliott Wave charts, I demonstrate some of the salient points. Remember that this blog exists as a resource for the student of Elliott Waves. Whether you are a professional trader, a casual investor or a serious student of Elliott Waves, the examples available here will fascinate you and help you better understand the nature of financial markets and how you could anticipate the market turns. So without any further ado, present you the charts of the Egyptian Stock market index and how Elliott Wave analysis was so powerful in its play.

Egypt's stock index traced an extended third wave

Egypt’s stock index traced an extended third wave


Observe how sub wave 5 inside the 3rd wave was equal to sub wave 1

Observe how sub wave 5 inside the 3rd wave was equal to sub wave 1

wave 4 was shallow and came between 23.6% and 38.2% of wave 3

wave 4 was shallow and came between 23.6% and 38.2% of wave 3

wave 5 was equal to wave 1

wave 5 was equal to wave 1

Once the 5 wave move ended, a huge correction started

Once the 5 wave move ended, a huge correction started

Now that you have seen how Elliott Waves work, go back to FWTFF and try and see if you could figure out the likely ending point of the on going correction. Good luck.

Jul 102015
 

I have been seeing several queries on the blog asking if the move to 7700 (as discussed on CNBC) is still coming, now that we have rallied up in 5 waves. So let’s try and clear up the air a bit.

The real goal of any analysis is to make money. Some people, however, want to keep proving to themselves that Elliott Waves work ( or doesn’t work). Their goal is to keep producing accurate wave counts and are happy if they get it right. Some are delighted if they can spot an occasion where someone else has got it really wrong :)

Remember an important point folks. NO ONE CAN TELL THE FUTURE. What we are trying to do here, with Elliott Waves, is to provide ourselves with a framework to base our trades upon. Knowing we are going to recover from around the time I gave the interview is sufficient value to make money in itself. Knowing that 8420 was a key level is additional money in the bag. (I don’t read others’ analysis, but you probably know how many others anticipated 8420 as a key level).

So what about the expectation for 7700? Is that coming? The answer is something like the following. Elliott Wave analysis is about the only approach that allows you to adjust your market expectation as you get new clues. It is a dynamic approach. You cannot draw a few lines and expect the market to follow your command. Instead, you listen to it and make changes to what you should do next.

Members of my Exclusive Club did not receive any trade ideas on the Nifty during this period. Why is that? We should know which battles to take part and which one to side step. But we did make over 13% during the rally to 8420 in one stock. Actually it moved 20%, but as conservative traders, we were content with taking 13%.

Don’t forget that I also discussed Tata Motors in that interview!

NIfty 10Jul15

Jun 242015
 

The following interview was aired by CNBC TV18 on 11 June 2015. At that time, the Nifty index of India was trading well below the 8000 level. Watch it and see the power of Elliott Wave analysis.
Today, the index tested a high of 8421. Will it go down to 7700? That depends on a fresh analysis of the index, but anyone who sold at 8420 levels would have already made enough money intraday to celebrate as the index plunged to 8339 in under two hours.

(The interview’s link appears in the prior post as well. Hence I removed the link here)

Nifty dives from 8421

Nifty dives from 8421

Jun 112015
 

Hello folks,

CNBC India reached out to discuss the outlook for Nifty, Tata Motors, ICICI and SBI. Here is the link for that:
http://www.moneycontrol.com/news/market-outlook/exit-longs-till-nifty-hits-8400-wavetimescoms-ramki_1405518.html

Trading is all about listening to the clues that the market sends us, and taking appropriate action. A few weeks ago, when I was in NYC, I had mentioned that we will likely get a bounce from 8080 or 100 points below that. We did get a recovery, but the personality of that recovery clearly indicated that it was not the real thing. The next level where I might get interested in discussed in the video you see in the link. Good luck.

Mar 202015
 

It is two months since I posted something, and I looked up the Polaris chart. Well, we certainly have reason to smile. Here are two charts. The first chart was posted here on 23 Jan and the second chart shows that Polaris did indeed come down quite close to the lower target mentioned, a move of over 16% from the time we discussed this stock. Enjoy.

Elliott Wave analysis of Polaris

Elliott Wave analysis of Polaris

And now we see that Elliott Wave analysis of Polaris did not let us down.
Elliott Wave analysis on Polaris proved effective

Jan 232015
 

(Please read important update at the end of this post)

Ever so often, Elliott Waves helps the investor from making mistakes. For example, when I read the news that Rakesh Jhunjhunwala, the ace investor,had increased his position in Polaris, I decided to see what Elliott Waves had to say. Sure enough, it warned against following the Badshah this time.

Many investors don’t even read the news fully. Here are the headlines, and the final paragraph from the Economic Times.

Polaris rallies after news that Mr Jhunjhunwala upped his stake

Polaris rallies after news that Mr Jhunjhunwala upped his stake


The additional investment was made in Q3 of 2014

The additional investment was made in Q3 of 2014

Maybe I am reading this news all wrong, and he actually made fresh investments just the previous day! But it was essential to see what Elliott Wave analysis would say. Here are a couple of charts.

Polaris Consulting completed a 5-wave rally

Polaris Consulting completed a 5-wave rally


As you can see from the Elliott Wave chart above, Polaris Consulting has already completed a five wave rally near the highs, and the fifth wave was 38.2% of the distance from point ‘0’ to point ‘3’. Many of you are familiar with this approach to anticipating where a fifth wave will end. I have also explained this in detail in my Elliott Wave book, ‘Five Waves to Financial Freedom“.

The next Elliott Wave chart shows how the correction is unfolding. As you know, once a five wave upmove is completed, we will get a three wave correction. And the most powerful of the three waves down will be the ‘C’ Wave. It is clear that Polaris is in the middle of such a ‘C’ wave.

Polaris Consulting in C Wave

Polaris Consulting in C Wave

It is also useful to look at some Fibonacci retracements as shown in the next Elliott Wave chart. You can see that Polaris had paused briefly at a couple of prior Fibonacci retracement levels on the way down, but clearly, it shouldn’t appeal to any Elliott Wave trader to be blindly following the Polaris News.

Fibonacci Retracements in Polaris Consulting

Fibonacci Retracements in Polaris Consulting

IMPORTANT UPDATE:23 Jan 2014: I have heard back from some WaveTimes members that I have not taken into account the fact that Polaris has demerged with “Intellect Design Arena”, and that stock has its own value, and hence it is incorrect to say that investors in Polaris who purchased the stock in the last two days have made a mistake. I am indeed guilty of not knowing this development. However, I did take care to check if there was any news about Polaris that caused it to reverse exactly one day after the news I referred to above. There wasn’t! This merger has been in the news much earlier. The stock has simply adjusted lower today. This should give us pause to think about a company that has a stock split.The chart of a stock that has been split is immediately adjusted historically. But in the case of a demerger, where a portion of the company is separated, how do we treat that stock? What is the value of the demerged entity 1 year ago, 2 years ago? If you know the answer, please post in the comments area.