Elliot Wave Analysis

Chart Astrology, as Eric the market sage explains, affects the price movement of the stocks. Elliot came up with his wave theory almost a hundred years ago, and proponents have kept the principle alive to this day. The basis is the Guassian bell curve of human sentiment. The market begins to rise (or lower) and a few early adopters will make the trend, wave 1. The market then pulls back a bit making the countertrend wave 2, but then later adopters will pour into the market making the definitive wave 3, only to have a countertrend wave 4 and a final wave 5 when late comers try to make some money. The corrective 3 wave cycle is termed the A-B-C and goes counter top the 1-2-3-4-5 main wave pattern.

Voo-doo? Sure, but followers of wave theory will swear by it, and most will admit that it takes an active right brain to see the trends and line patterns. Here's my amateur evaluation of the last few days:



And the prediction of the A-B-C corrective phase should last over the next 2 or 3 trading days:




My analysis differs from Eric's only slightly. While I just dabble in the dark arts of market prediction, I still find some value in watching the trends and counter-trends. And I find value in Eric's discipline and narrative as well.

Another analysis of the trend could look like this:



Which gives a similar result and SPY hitting $138 by Tuesday. We'll see...