People go back and forth on that point but I generally use Continuous Contracts provided by TradeStation in doing long-term TA on commodities, though I really don’t do much of that. TS has its own formula of adjusting, while some prefer to do it different ways. There’s good and bad of each method and I would suggest to let your goal drive your means. I’m not an expert in this area so I would defer to others, but I’ve found TradeStation’s continuous contract structure to work decently for me.

Again, it’s sort of like how I analyze the DIA chart but trade using the current contract @YM to play out my analysis into potential profit. I don’t focus on the TA of the @YM except for minor confirmation/non-confirmation.

That’s part of the trouble with Elliott. It’s – for me at least – quite difficult to project large-scale structures as they develop in real time. Hindsight helps us classify waves and build the current picture from there, but in real time it can be quite difficult and confusing. Notice I side-stepped the “larger wave” discussion, only noting that what we’re seeing here is a fractal of a larger pattern – which it was.

For me, I try to focus only on the next probable swing to the exclusion of all else. Is the next move likely to be up or down? And from that question I assemble as many pieces as I can and Elliott analysis is only ONE piece. I also try to have various current wave interpretations to see if there’s confluence from the wave counts.

To be honest, and taking us to the present, the Final large-scale 5th Wave – perhaps that began in 1980 – ended in 2000… though some Ellioticians see the 5th wave as yet to come (the 2000 – 2008 move was an “ABC” Correction that is making up the Large-scale 4th Wave with a big 5th yet to come).

Even that is disputed.

Focus on the next probable swing and try not to get caught up in the grand intricacies of TA.

Thanks,
Jack

Just trying to get an better feel for EW…. Is there a rule or principle that prevents wave 3 of 4 (SPX 300, Apr 87)) from being interpreted as a larger wave 5? The skeptic in me is saying that it’s called 3 of 4 because we have the benefit of hindsight knowing that the top occurs later. What quides a technician otherwise?

I slipped one in which was the 50 month EMA (monthly chart).

Index level 217 reflected the 423.6% Fibonacci extension target of the 337 to 309 “A” Corrective wave around August 1997.

219.35 was the 50% large-scale retracement of the 1982 bottom of 102 to the 336 top.

215.50 was the 50% large-scale retracement if you bumped us back to the 1980 low of 94 to the 336 top.

I’m guessing there could have been Gann projection or time targets there but I’m not well trained in Gann methods yet.

To me, the most important confluences came from Fibonacci and multiple-time period moving averages.

Yes, I didn’t take readers too carefully into the momentum readings because the chart was compressed. I just sort of pointed them out in passing.

I’ve learned to take divergences seriously as well – they can be important warning signals. I agree about your statement that negative divergences carry more weight – most chart patterns base their projections on the same assumption.

All divergences on all time frames give us clues. I don’t take signals purely off divergences but they are an important piece.

True – one of my biggest problems early on was getting tagged so many times by stops that were too tight. I thought S/R was an exact number and that it couldn’t go beneath it – hence I was stopped out repeatedly until I started pushing the stop where I wasn’t comfortable… and it wasn’t tagged as much. It worked out edge-wise.

MAs to me define structure and I pay attention to their orientation. It’s not price always bounces off them, but they can provide clues to structure and low-risk entries.

It takes many buyers to bid something up, but for a fall, all it takes is absence of buyers, things fall on their own weight. So, I believe negative divergence are even more important than positive divergences

Of course, hindsight is 20/20, but one lesson I have learned is never to take a weekly or montyhly negative divergence lightly. well, as a trader, I even take the dailies seriously until they are negated