Hi all.  I hope everyone is having a fine week.

I just bought and read the book “Beautiful Pictures from the Gallery of Phinance” by Robert Prechter Jr., and am quite happy to add it to my trading education library.

I think most of you are aware that my Elliott Wave counts and predictions are produced independently, and are not swayed by the other wave counters out there, although I do utilize some of the unique, long-term research published by Robert Prechter. It would be virtually impossible to understand Elliott Wave fully without having studied Prechter’s work. Let me say that I have a tremendous amount of respect for the man as a researcher, despite the ridicule he receives, some of which he rightly deserves I suppose, for not only getting bearish several years too early, but also for losing sight of what is actually trade-able information, considering today’s highly leveraged trading vehicles.

Most of the badmouthing comes from the traditional lichens of the stock market, who continue to promote a type of investing that worked amazingly well in the late 20th century, specifically from late 1987 through early 2000. This very large and powerful group advances the concepts of buy-and-hold, dollar cost averaging, diversification, staying long-only, and forgetting about attempting to “time” the markets. While Prechter can be rightly accused of being too early, I think an equally compelling case can be made that the traditional proponents of buy-and-hold are encouraging a concept that has been logically invalidated twice very recently, once starting in 2000, and again in 2007. As I’ve pointed out in my videos, it is obvious when looking at a long term chart of the stock market that there was a dramatic change in the character of the price action starting in Y2K.

The balance of the backlash Prechter and his organization receive likely comes from traders (myself included) who’ve have lost money in recent years on their shorter-term trade calls, which by all indication, are overly influenced by Prechter’s long-running expectation for an imminent “mother of all bear markets”.

What I’m getting at here is that all people, and therefore organizations of people are flawed by nature.  Too often, published Elliott Wave counts seem to be manifestations of a pre-existing long-term bias.  In other words, it appears that at a subconscious level, many so-called “Elliotticians” tend to force their long-term inclinations onto short term wave counts, rather than allowing the markets to unveil their intended targets through the gradual fulfillment of wave structures, driven by nature’s Fibonacci proportioned relationships. 

This is why I have started doing LIVE educational webinars every weekend.  I believe it’s very important to be able to produce one’s own personal wave counts and associated Fibonacci targets, if for no other reason than to have access to an originally produced “checks and balances” system, unadulterated by consciously or unconsciously harbored motives, attitudes, or issues.

As part of a personal quest to learn how to predict market movements, I’ve read a large number of books, including several by Robert Prechter:

  • Elliott Wave Principle (1978-2005) – a must own! – read it free . .
  • At the Crest of the Tidal Wave (1995) – his first bearish book
  • The Wave Principle of Human Social Behavior, and the New Science of Socionomics (1999)
  • Market Analysis for the New Millennium (2002) – one of my faves – includes essays by several amazing thinkers!
  • Prechter’s Perspective – (1996-2004) – another fave
  • Conquer the Crash (2002-2009)
  • Beautiful Pictures (2003-2010) – a new fave!

It was just a few of days ago that I finally broke down and bought “Beautiful Pictures” from EWI. It is expensive ($46 after shipping), and apparently rare. I’d been hoping to find a used copy for next to nothing for many months now, but one never appeared.

The content presented in this book is everything I’d hoped it would be.   It’s a large hardback, with big crystal clear charts of Prechter’s counts, as well as some from R.N. Elliott. The book focuses on the many Fibonacci relationships in both price and time that have occurred and reoccurred in the financial markets going back as far as data exists.

It is simply amazing to see the Fibonacci sequence constantly at work in the markets at all degrees of trend!  I would recommend this book to anyone interested in better understanding how Fibonacci price and time relationships can be applied to charts.  Thanks to the clear and thorough graphic presentations in this book, I fully expect to redouble the display of Fibonacci price and time targets on my own posted charts moving forward.  Despite the controversies mentioned earlier, I’d like to thank Mr. Prechter for making this truly outstanding research available for examination.

Sid Norris
http://elliottwavepre.wpengine.com