Good observation by Ralph N. Elliott on historical data on Dow Jones averages and its behaviour, he discovered the same repetitious phenomena in Dow's movement. Basically the priciple is an empirical equation on human behaviour in stock market. The greed, the fear and the herd instinct. Thank you Mr. Elliott, you gave me a simple tool to identify the direction and location of the stock movement. The only problem is, sometimes at crucial junction, there are two to three possibilities in the stock movement. One may assign probability to each of the possibilities, sometimes it is well behaved but sometimes the least probable option was the correct one. Either I am not good enough or the stock market has to be like that or else the market cannot exist. I always tell my friend, whichever option the market ultimately adopts, it can fit into one of Elliott's principle. Elliott is always right, it is the interpretor that get it wrong, sometimes.
Looking at the Dow last night, I think it is on its last journey south to complete its Wave A from its peak of 14,164 set on 9 October 2007.
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