Greetings! My name is Sid Norris. For the past five years, I’ve been hosting weekly EWP “Counts” webinars, and producing twice-per-week editions of EWP ScreenShots for subscribers in association with my website/blog ElliottWavePredictions.com.
Three years ago that I added Hurst cycles to my technical analysis toolbox. It was a revolutionary addition. For that point, my work has evolved, and now features a combination of several robust methods of technical analysis, including Elliott Wave and its associated Fibonacci price targets, Hurst cycle analysis, trend exhaustion indication, consideration of extreme sentiment positioning, inter-market correlations, and MACD multi-timeframe divergence. The net result is a unique system of market forecasting that is less subjective than Elliott Wave when used alone.
The evolution of the techniques I use inspired this new website and associated suite of services: ElliottWavePlus.com. Elliott Wave Plus is the culmination of everything I’ve learned, and will continue to learn about technical analysis of the financial markets. I hope my work is most beneficial to you!
In this first blog post, rather than present a specific chart or set of charts showing my current market forecast for a particular item, I’d like to present an example of how our unique system of technical analysis works.
An Example of What Hurst Cycle Analysis Brings to Elliott Wave
If you’ve been trading using Elliott wave theory for any length of time, you’ve probably experienced extreme frustration as your wave count is invalidated by just a few ticks, and then price goes on to move in the very direction you expected prior to invalidation. When Hurst analysis is being utilized alongside Elliott, if a cycle (or nest of cycles) is expecting a crest or trough quite soon, an Elliott invalidation means nothing. The trend change is still expected. This is why I will often present both a main and an alternate, both of which expect a swing high or swing low on about the same date. If invalidation of one count occurs, there is a backup wave count already in place that still expects the turn.
If you think about the phenomenon of Elliott invalidation stops being hit just before price moves in the previously expected direction, it makes total sense. There are a lots of Elliott wave traders out there, and if they’re all placing their stops at the same price level, it’s quite common for those stops to be taken out before price can move substantially in the forecasted direction. The reason for this phenomenon is related to sentiment positioning.
Trend changes often occur when trader sentiment is extremely one sided. For instance, if a large number of Elliott traders are short, and have their stops placed slightly beyond the most recent swing high, if price moves above invalidation, those stops are triggered. This creates a surge in buying because those stop loss orders are actually buy orders. At the same time, breakout traders (and algorithms) will routinely buy as soon as a new high occurs above the prior swing high. So the Elliott wave “invalidation point” actually creates a perfect storm of buying, shifting almost all traders to one side of the boat very quickly. Then, with all of the stops run, and with no breakout traders left to buy, upward movement quickly ceases, and the slightest bit of downward movement causes the breakout buyers to quickly move into loss. The boat capsizes as the breakout traders stop-loss (sell) orders are triggered, propelling the kick-off to a new downtrend.
Examples of Other Signs of Trend Change We Look For
In the example above, an Elliott Wave invalidation level was taken out, but our forecast remained in place for an imminent trend change based on Hurst cycle analysis. At the same time as many Elliott Wave traders would be holding their heads in disgust over a locked-in losing trade, our system would be on the lookout for several additional indications confirming the likelihood of trend change. We’d be actively looking for:
- a trend-exhaustion signal (based on Tom DeMark’s published systems)
- a volume spike associated with stop loss and breakout orders
- indication of extreme sentiment positioning, where the spread between retail positioning and large commercial positioning was extremely wide
- inter-market correlations, where complete analyses of typically highly correlated items would be in agreement that trend change was imminent
- multi-timeframe MACD divergence(s)
Elliott Wave Plus – Our New Site & Services
We’ve been working hard for several months on our new website, ElliottWavePlus.com. Here are a few of the differences subscribers will notice between our new site, and the old one, ElliottWavePredictions.com.
- When you subscribe to any level of service, you’ll receive an acknowledgement email immediately. The email will help you create a login at the new site, and will explain how to navigate once you are logged in.
- All subscribers, including Free Plan subscribers will have access to several important Guides (documents) that explain any number things, including the wave principle, what all of our chart notations mean, what Hurst cycle analysis is, etc. We will be adding additional educations guides regularly.
- EWP Screenshots (Basic Plan) subscribers will have full access to all editions of EWP ScreenShots for the past 30 days. The new site will also allow you to download specific screenshots or complete editions without having to exit the site.
- EWP Weekly “Counts” webinar (Pro Plan) subscribers will have access to all webinar recordings going back 30 days. Also, active Pro Plan subscribers will be able to access the invitation link to the next weekly “Counts” webinar inside the Pro Plan client area. Additionally, we are rolling out a new “indexed” version of the weekly webinars. This new feature will allow subscribers to click on any item listed on the video index (SPX, GDX, GBP/USD, Silver, etc.) and the video timeline will immediately jump to the coverage of that specific item.
- In addition, all Basic and Pro Plan subscribers will have access to a number of educational videos, including the classic ones from my prior site. We plan to produce new educational videos regularly.
- We will no longer be using Paypal. We will handle all credit card processing though Stripe, one of the largest and most respected credit card processing companies in world.
- Elliott Wave Plus paid subscriptions will automatically renew monthly. Cancel anytime.
- We plan to take the Paypal buttons off of the old site (ElliottWavePredictions.com) at year end. Annual subscribers to the old site will automatically move over to the new site at the same plan level. Monthly and weekly subscribers to the old site should plan to convert to the new site between now and year-end (2016).
- ElliottWavePredictions will continue to exist as a blog only, and we plan to continue to occasionally produce new blog posts there.