I have, over the nearly eleven years (!) this blog has been around, largely avoided the topic of Elliott Waves. There is no shortage of posts here on Slope, largely by others, about the Elliott Wave theory (click here to see the list of them) but for myself, I hardly ever mention it.

One thing to understand how I analyze the markets is that I’m pretty damned lazy about using methods that don’t “sing” to me. That sounds like an odd verb to use, but it’s the one that’s always made the most sense. The things that sing to me – – those which resonate and make sense to me – – tend to be simple tools like horizontal support & resistance levels, trendlines, and, to a lesser degree, Fibonacci retracements.

I don’t go in for stochastics, Bollinger bands, relative strength indicators, moving averages, MACD, or any of that other stuff. I am awfully fond of analogs, as some of you know, but while some border on the magical (like the one I offered on Alcoa this year) others lead to completely erroneous predictions.

I find time cycles to be quite alluring, but I rarely find any that work reliably. However, when I was a bit more naive about this topic, I became rather enchanted with the Elliott Wave theory. I studied it intently for my CMT test, and I become an affiliate of Elliott Wave International down in Gainesville, Georgia (whose recent free report you can get by clicking this link – – c’mon, it’s free, so be a pal and sign up).

What really pushed me into a near-religious fervor with respect to Elliott Wave was how remarkably well it seemed to work during the throes of the financial crisis. I casually read the various publications issued by EWI in 2007, 2008, and into 2009, and I was frankly stunned at its prescience. It was absolutely invaluable, and Slopers seemed to love it too, because the payments I got from EWI from signups grew to some awfully exciting amounts. These guys seemed to have a crystal ball, and to their credit, in February 2009, they called for a big bounce to take place. So they not only accurately predicted the important movements of the financial crisis, they just about exactly nailed the bottom. I was impressed.