Objective Waves

As we wait to see if TDST support lines will be broken on the daily or weekly charts (allowing us to take a short position), let’s continue with Elliott.

Elliott is extremely difficult because it is so subjective. Elliott is extremely rewarding because it allows one to visualize a “road map” of price movement into the future. Let’s start with D-Wave, Tom DeMark’s objective version of waves.

Start with a high (or low) that is greater (less) than the previous 21 highs (lows). Notice the Fibonacci number. In our case this is the high of January 19 (see chart). To confirm the first wave down is underway we need to see a low (high) less (greater) than the previous seven lows (highs). This occurs on January 20. The next event to watch for is a high (low) greater (less) than the previous four highs (lows). As marked on the chart this happened on February 2. The lowest low between January 20 and February 2 is marked as objective wave 1.

We now wait for a low (high) less (greater) than the previous 12 lows (highs). As marked on the chart this happened on February 4. The highest high between February 2 and February 4 is marked as objective wave 2. This means that objective wave 3 is underway. It will be confirmed complete when we see a high (low) that is greater (less) than the previous 7 highs (lows).

I will add to this chart in future postings.