EWaves guide - elliott wave analysis copper

Elliott Wave Theory, Cycle, Rules and

Personality Explained

Elliott Wave Theory

Elliott Wave Theory is quite straightforward. Created by Ralph Nelson Elliott and first published

in his book The Wave Principle in 1938, this theory has suffered numerous misinterpretations at the hands of careless analysts. It is true that Ralph Elliott was not an expert copywriter, and he

tried to present a more comprehensive version in his final work Natures Laws: The Secret of the Universe in 1946. However, a diligent student can learn quite a lot by paying attention to not just the main features of the Elliott Wave Theory, but also to the numerous clues that are

strewn in all of Ralph Elliotts works. In this article, I will try and summarize some of the main points of the Wave Theory. Also explained are Elliott Wave Cycle, the three key Elliott Wave

Rules that are considered the pillars of the Wave Principle, and the Personality of some waves

such as the third wave in a cycle.

The Elliott Wave Cycle

Ralph Elliott found that in an uptrend, or a bull phase of the market, prices went up in five

waves. Three of these waves were in the upward direction, and he called these waves impulse waves. Each of the three waves was followed by a downward movement, which he called a corrective wave. Here is a clue that is not often very clear! Whereas the first and second impulse waves were followed by a smallish correction, the downward move that came after the

fifth wave up was a larger move. This was so because this last mentioned downward move

corrected not just the preceding impulse wave (the 5th wave) but also the entire five wave

sequence.

So to recap, in a bull market, we will see three upward moves and two downward moves. Once

the five waves are completed, we will get a correction that will be bigger than the two previous

corrections because this downward move corrects not just the fifth wave, but the entire set of five

waves up.

If a sequence of five waves plus three waves is completed as above from a significant low, then

the completed cycle will represent the first and second waves of a cycle in the time frame of the

nest higher degree. Every impulse wave is actually made up of a five-wave sequence within

itself. Corrective waves are usually made up of three waves, or combinations of three-wave

sequences.

Elliott Wave Rules

The Elliott Wave Principle has just three straight forward rules. In a five wave progression,

1. Wave 2 can never exceed the start of wave 1 2. Wave 3 can never be the shortest impulse wave 3. Wave 4 can never overlap wave 1 (i.e. cross into the same price area) expect within a

diagonal triangle.

Easy enough, right? The trouble is to understand how to use these rules to your advantage. In my

book Five Waves to Financial Freedom I have explained all these with numerous examples.

But you could see hundreds of charts in this blog itself. At Wavetimes.com, there are Elliott

Wave examples covering dozens of asset classes. For instance, here is a EURUSD example of

Elliott Wave analysis.

EUR/USD example of Elliott Wave Analysis

The most dramatic sell off in EUR/USD has one wondering whether Elliott Wave principle

worked. There are six charts that I offer you as an example using the most recent moves. Study

them carefully and see if you can use some of the techniques in your trading.

Wave Personality

In addition to giving us the rules of Elliott Wave Theory, Ralph Elliott also discussed the

personality of the waves at various positions in the cycle. For example, the third wave is usually

the steepest wave, and is accompanied by expanding volume. A corrective wave in the fourth

wave position is usually complex in nature. You will see sudden departures from normative

behavior. Also, just when you think a correction is almost finished, a complex fourth wave will

add another level of complexity to the formation. These are just some examples of wave

personality.

Alternation between waves

Another feature of Elliott Waves is the tendency of waves to alternate between long and short,

between simple and complex, between the length s of time that alternating waves spend etc. For

example, if wave 2 was a simple correction, you should expect wave 4 to be complex. These are

valuable clues to the trade that can offer a real edge in the market, the so-called Elliott Wave

Edge.

Fibonacci Ratios in Elliott Waves

Any explanation of Elliott Wave Theory, however brief, will be incomplete without a mention of

the use of Fibonacci Ratios. These ratios are computed from the Fibonacci number series that

start of like this 1,1,2,3,5,8,13,21. As you can see, each number is the sum of the preceding two numbers. Fibonacci Ratios are computed from these numbers. The key ratios used in Elliott

Wave Analysis are 38.2%, 50%,61.8%, 100%, 138.2% and 161.8%

Generally speaking, the following relationships work.

Wave 1 is corrected by wave 2 by between 50% to 100% (note that 50% is obtained by

dividing 1 by 2 in the Fibonacci series of numbers)

Wave 3 is usually 161.8% of wave 1

Wave 4 is often 38.2% of wave 3. Occasionally, when wave 1 was a shallow correction,

we can see wave 4 coming down by 50% of wave 3, and very rarely 61.8% of wave 3. If

wave 3 was an extension, then wave 4 is more likely to terminate around the 23.6%

retracement level.

Wave 5 is often computed by taking either a 38.2% measure or a 61.8% measure of the

distance traveled from the start of wave 1 to the end of wave 3. If Wave 3 had extended,

then there is a high chance for wave 5 to be equal to wave 1.

Within corrections, in a zigzag correction, wave C is often 161.8% of wave A. If the

correction is a flat correction, then wave C is usually equal to wave A or no more than

138.2% of wave A.

You can read more about the Fibonacci Number Series here.

Fibonacci Number Series and Elliott Waves

Fibonacci number series has caught the imagination of almost every serious Elliott Wave trader

in the global markets. Unfortunately, many traders seem to think that a knowledge of Fibonacci

numbers is the answer to all their trading problems! But first, let us see what this is all about.

Elliott wave analysis of stock market or forex or commodity market would invariably involve the

use of some Fibonacci numbers to arrive at targets for corrections or projections. If you had

searched the Internet for some information about the Fibonacci number series, you would have

found a lot of material, but few explain it clearly enough. So this post aims to fill some of the

gaps.

The series takes on a sequence 1,1,2,3,5,8,13,21,34,55,89,144 and so on to infinity. Observe that

as we go to larger numbers, the advance becomes closer in ratio to 1.618. (PHI)

Suppose you place two squares of side 1 unit (say 1 inch) side by side, you get a rectangle whose

sides measure 1 by 2. Now imagine you have drawn a diagonal on this rectangle, thereby

creating two right-angled triangles on either side of the diagonal. If you remember the old

Pythagoras theorem that you learned while at school, you will know that the square on the

hypotenuse of a right triangle is equal to the sum of the squares on the two sides! So the diagonal

=square root [(1x1)+((2x2)

=square root [1+4]

=square root [5]

=2.236

Now let us just take the first square (of sides 1 unit each) and draw its diagonal. This diagonal

will measure square root of 2 = 1.414

These two ratios, 2.236 and 1.414 are sacred roots. The reciprocals of them are 0.447 and 0.707.

You will see a lot of my work is using the ratio 0.707!

Now I have a vague suspicion that some of you are more confused than before reading this

article. But dont despair. There are lots of easy stuff that you will learn as we go forward. For example, you could learn how to use Fibonacci Ratios properly by first exploring possible

placements of the Fibonacci grids on your Elliott Wave charts.

I wish you good trading!

How to use Fibonacci Ratio Retracements

How to use Fibonacci ratio retracements is a topic that every serious trader should look into. A

few years back I read a book by Constance Brown Technical Analysis for the Trading Professional. She made a very good point on how the theorist among technical analysts would, incorrectly, choose the extremities of a move to draw Fibonacci retracements.

Choosing the right place to draw Fibonacci ratio retracements could mark the difference between

success and failure in trading decisions.

Example of an incorrect use Fibonacci Ratio Retracements

in real-world trading

This shows the 'wrong' way to draw Fibonacci retracements

Such an approach would often result in their missing a good move because the market falls just

short of their ideal retracement levels. The practicing professional would spend a few extra

minutes to see what were the pressure points in recent history and choose to ignore the spikes

that shows up ever so often. Why make the same mistake as some poor trader whose stops were

run in by the market at the extremities?

Examples of how to use Fibonacci Ratio Retracements in

real-world trading

Here is a demonstration of the two outcomes using the chart of Sterling Pound. The same

technique for using Fibonacci ratio retracements works equally well, whether you are

considering the chart of a stock, an index, forex or a commodity. Learning how to use Fibonacci

Ratio retracements in Elliott Wave analysis is like winning half the battle.

The preferred way to draw Fibonacci retracement grid

Corrective Waves

Most traders encounter difficulties when dealing with corrective waves. Elliott Wave theory has

broadly classified corrections as Zigzags, Flats and Triangles.

A zigzag correction often corrects the previous impulse wave by a significant extent. A zigzag

correction is made up of two sets of mini-impulse waves separated by a corrective wave. Thus

the sub-waves of a zigzag correction tend to be 5-3-5 waves sequence.

A flat correction, on the other hand, will only correct a smaller portion of the previous impulse

wave. Furthermore, the sub waves of the flat correction will be made up of a 3-3-5 sequence.

Notice that in the zigzag as well as flat correction, the last sub wave is a five wave affair!

Triangles are further classified as horizontal triangles and leading or ending triangles. The sub-

waves of these triangles have their own personality traits. If it is a leading diagonal triangle, the

sub waves are made up of 5-3-5-3-5 waves. But if it is an ending diagonal triangle, the sub waves

are 3-3-3-3-3 waves.

Dont be alarmed, but sometimes corrections tend to become complex whereby we see combinations of zigzags, flats or triangles. This is why I always advise traders to avoid trading

complex corrections. You can identify a complex correction using the tendency of waves to

alternate in complexity. Occasionally wave 2 becomes a complex wave, in which case your stop

loss is anyway supposed to be placed below the start of the wave 1!

The Elliott Wave Edge

When a trade uses Elliott Wave Analysis to determine where we are in the big picture, and then

computes likely levels where a turn is highly probable, then he/she has what I would like to call

the Elliott Wave Edge. Once he uses all the rules, his knowledge of the personality of the waves,

and the price targets using Fibonacci Ratios, the trader will be able to determine a price level

where he could initiate a position in the market place. After that, it all boils down to money

management. The determination of a low-risk entry level is the key benefit of doing Elliott Wave

Analysis. A trader who has the Elliott Wave edge will find that the consistent application of the

Elliott Wave analysis to his trading activity will produce a series of winning trades that will

make him money over time. You can read more about the Elliott Wave Edge here.

Elliott Wave Edge How Elliott Wave Traders Win

The Elliott Wave Edge

Does Elliott Wave analysis offer you, the trader, an edge? This is the main question you need to

consider. I recently saw a comment on one of my posts in WaveTimes where a reader asked a

very pertinent question. He suggested that Elliott Wave Analysis is like a toss of coin with a risk-

reward ratio. If one gets Heads, he will win 10 points. If it turns out to be Tails, he will restrict

his loss (stop loss) to 5 points. So out of 10 moves, if he is correct more than 3 times, he makes a

profit.

This reader referred to a long-term Elliott Wave chart where I had suggested the possibility of a

large down move, and pointed out that we were still edging higher to near all-time highs. Even at

this juncture, there were many possibilities, because wave counts are always work-in-progress!

So, in this dynamic market there cant be any fixed set of rules, and making money is very difficult, and that is the reason why most of the analysts are selling their advice, books,

memberships, tips etc. Wow! How very neatly put!!

Using Elliott Waves, if I could determine a level that has a high probability of success, isnt that a better deal than just tossing a coin at any level and deciding to buy or sell? We all know that

basically only one of three things could happen. (a) The market could go up from current levels

(b) it could go down or (c) it could trade sideways for some more time. All that a trader requires

is for some information on which is the more likely outcome.

How do Elliott Wave Traders Win?

Many beginning traders think that there exists a system that will tell us in advance which way a

market will move next. Then, all that they need to do is to master that system and they could

make money day-in and day-out! Others believe that some of the best traders in the world are

privy to some secret methods, or indicators, which is why these traders are so successful. Let me

share with you a secret. I have worked very closely with some of the best traders in the world,

and they are just like you and me. i.e. they dont have any secrets up their sleeves. What they do have is a system that offers them an edge. One of these systems that have proved to be very

effective is the Elliott Wave edge.

With Elliott Wave analysis, a trader is able to figure out where in the big picture the market is currently trading. He/she is then able to move into shorter time frames and determine a

reasonably reliable direction for the next move. On top of that, the trader is also able to compute

how far the current move is likely to travel before the inevitable change of direction happens.

Once these three things are figured out, the trader waits for the markets to come to a per-

determined level where it would be possible to take an exposure that keeps the money that is

risked to be affordable. Imagine one is drawing cards from a pack of 52 cards, and after drawing

10 cards, we find that we have drawn 3 Jacks already. Wouldnt you agree that drawing another Jack from the remaining 42 cards is a low-probability event compared to drawing a Jack when

there were 4 of them in a 52 card pack? Knowing that we have already drawn 3 Jacks is an edge

that we have, and so we can bet more confidently that the next card wont be a Jack. Similarly, if we are in the fifth wave of a move, and we know that there has already been an extended wave

earlier, and we know by our Fibonacci ratio analysis that this fifth wave is likely to end at a

certain level, then we have an Elliott Wave edge. We can start looking for a reversal around our

computed target for the fifth wave. If we take a counter-trend trade near this level, it is not the

same like tossing a coin at any stage of the movement and deciding to buy or sell!

Elliott Wave analysis gives us a great deal of clues about the market, so much so that we have an

edge at almost every stage of the move. Even not having a trade is sometimes a sound decision,

and Elliott Waves could give us that edge. For example, a trader would be well advised to stay

on the sidelines when a complex fourth wave is unfolding.

At WaveTimes.com you will find hundreds of examples where I have used Elliott Waves to

anticipate market turns with great effect. Go ahead and explore. You will soon find yourself

making some very sound trading decisions. Even if you are already an experienced trader and

enjoying an edge though some other system, you will find your results dramatically improving

by incorporating the Elliott Wave edge in your trading activity. So welcome aboard and join the

thousands of traders who are already benefiting from the insights given here.

Jun 012014

Elliott Wave Analysis of Alliant Energy Corporation

(NYSE: LNT)

Alliant Energy Corporation (NYSE: LNT) has been part of David Van Knapps Dividend Growth Portfolio since 2010. In his article in Seeking Alpha, David celebrates the 6th birthday of

his portfolio and showcases the stocks that go into that portfolio. The first stock in the list of 18

stocks is Alliant Energy Corporation.

As most of you know, I look at stocks from an Elliott Wave perspective first, and so decided to

do a detailed study of Alliant Energy Corporation. Elliott Wave analysis is a method that many

professional investors embrace because it gives them several clues about where in the markets progression we currently are. Briefly, Elliott Wave Analysis says that all impulse waves are

made of 5 waves, and once a five wave movement is completed we should expect a correction.

Alliant Energy Corporations Elliott Wave charts reveal that we are in the fifth major wave higher, and within that fifth wave, we could potentially be in the fifth sub-wave. Usually,

investors should start planning on a strategy to exit their holdings during this fifth-of-the-fifth

wave. However, with Alliant Energy Corp the story is slightly different. The first and third

waves that we have seen so far were both of normal proportions. Besides, the two corrections in

wave 2 and wave 4 positions were both relatively brief. This leads one to anticipate an extended

wave 5. So, we might as well be patient and wait for a move to around 60.50 before we take a

fresh look at this stock. What follows are a set of 11 Elliott Wave charts of Alliant Energy. Study

them carefully to see how the market seems to dance to the magic wand of Elliott Waves. Good

luck. (I suggest you right click on each image and open in a new tab)

Alliant Energy Corporation -chart 1


Question:

I have doubt in Alliant Energy Corporation -chart 9.

Wave 4 Correction. I could see ABC correction, and I am aware that Wave C is impulse and will have 5

waves. My doubt is what about Wave A. Is it impulse wave or it is a corrective wave. Will it have abc

wave count or 1-5 wave count. Please help me sir, I have this doubt for a long time.

Answer:

That is a good question. If we count a correction as a FLAT correction, wave A has to be in 3 waves. If

you count wave A as having 5 subwaves, it will be a zigzag or part of a double three. An irregular

correction is also a flat correction. You should read FWTFF book again!

Apr 232014

Elliott Wave Analysis of Wockhardt Ltd

In this post, I am going to present you with Elliott Wave analysis of Wockhardt Ltd. One of the

members of my exclusive club had approached me for a consultation back in January 2014. It

was the 14th of January, to be precise, and the stock was trading at Rs 413.65. The member sent

me the following brief note:

I consider myself as long term investor. I hope your advice/analysis will help in some of my long term investment decisions. By long term I mean I could hold for more than a year, if

required.

Could you please look into the following stock for me: (I understand this will cost me 2 credits)

Market India NSE Company Wockhardt limited Symbol WOCKPHARMA Exposure None at this time.

Comment: This stock has comedown from around Rs. 2000 and currently trading at 420. It saw a

low of 350 about 3 weeks back. Did it start its uptrend? Since the company is in pharma industry,

it is subjected to lot of FDA regulations. I think FDAs adverse observations made the stock to drop in recent times.

I looked at the chart, and could make out that it was going to be a challenge to come up with a

sound analysis. I prepared a set of 10 charts and will share with you some of them here. Please

note that this is not a marketing message. The idea is to allow readers to see the value of Elliott

Wave analysis, and how someone with experience with Elliott Waves could come up with a

sound strategy. I recommend that you open the charts in different tabs.

Wockhardt Big Picture Elliott Waves

Wockhardt First Target for C wave

3rd wave target within the C wave

Verifying 4th wave as correct

Identifying possible end of wave 5

Analyzing minor waves of wave 5

As can be seen from the above, I have finally come to the conclusion that a major correction is

now over, and the rally that started off from that low is the first wave of a new cycle. Now comes

the more interesting part, the one about where to buy.

Have we finished 5 waves of wave 1?

So we have identified a low-risk entry point. However, there were other considerations like risk-

management and what size to expose. Yet, an initial entry point has been identified.

This member went long a decent position size at an average rate of 430. He probably purchased

some on the way up after the dip, a smart investor I must say. He understood the size of the

upcoming recovery, and wasnt penny wise when it was the right time to take a risk. A majority of traders do the opposite. They take big risks when they should be cautious, and take small risks

when everything points to a favorable move! Anyway, this is what happened. I am sharing with

you just the plain chart without any notations. We got a dip down to below the 400 mark twice in

the days that followed and the stock is up by nearly 70%.

The power of Elliott Waves

Mar 102014

Elliott Wave Analysis and Seth Klarmans call on Tesla Motors

odays FT carries an interesting report filed by Miles Johnson, their Hedge Fund Correspondent. This report says that Seth Klarman, one of the most respected investors, has raised the alarm over

a looming asset price bubble, and specifically mentions Tesla Motors , (TSLA:NSQ). He has

warned of the potential for a brutal correction across financial markets. See this link: Seth

Klarman warns of asset price bubble

So I decided to check out the charts for Tesla Motors to see if Elliott Waves could offer us

additional clues that might help us play along with the view professed by Mr Klarman.

Take a look at the first chart below. It clearly shows that we are in the fifth wave of a move that

stated back in Q3 of 2010. According to the Elliott Wave Principle, it is normal for one of the

three impulse waves within a five wave sequence to be extended, i.e. for it to move a greater

distance than the other two impulse waves. The chart below shows that the first and third waves

were roughly equal is measure (i.e. they were of normal proportions). This also ties in with another feature of Elliotts observations that often enough, two impulse waves tend to be equal in dimensions. You will also observe the principle of alternation in the two corrective waves seen,

whereby when wave 2 was shallow, we got a wave 4 that was deep.

The next chart shows how to anticipate a possible end point for wave 5. Because we are

expecting wave 5 to be extended, one possible terminal point is at a place where wave 5 would

have traveled a distance equal to that from point 0 to point 3. This comes at $295.

We will now zoom in to the fifth wave and see if the sub waves of the fifth wave can give us

additional information. As you probably know, every impulse wave is composed of its own set

of five sub waves. We can immediately see that sub wave (3) was extended to reach about 300%

of sub wave (1). Wave (2) was 50% of wave (1) and wave (4) has already corrected to a 23.6%

measure of wave (3). All these Fibonacci Ratios are common measures used by Elliott Wave

Analysts to add confidence to their reading of the waves.

The final chart below uses the technique I have described in my book Five Waves to Financial Freedom where we measure the distance form point (0) to point (3) and compute a 38.2% and a 50% measure. These measures, when added to the bottom of wave (4) will give us potential

targets for wave (5). Interestingly, if we add a 38.2% measure to wave (4) at 235, the target

comes just below $295 which we already saw earlier. And should wave (4) come down some

more to reach a 38.2% correction of wave (3) that is reach $217, then we will get wave (5) to land at 291 if we add a 50% measure of (0) to (3).

Because of these confluences, we should go with the belief that there is a high probability for

Tesla Motors to complete its extended fifth wave just below $295 and commence a very sharp

decline that can take it all the way down to $137. This is the level where the extended fifth wave

had its sub wave (2) end. There are numerous illustrations of this phenomenon explained in this

blog as well as in my book so much so that I have often informed readers that fifth wave

extensions can make us rich! Good luck and happy hunting.

Jul 012012

Elliott Wave Analysis of USD/INR (Indian

Rupee)

There have been numerous requests for Elliott Wave analysis of the Indian Rupee or USDINR. Readers

from India have been wonderstuck at how WaveTimes managed to identify a top above INR 54 last time,

following which the currency pair dived to 48.60 in a few short weeks. This time, I am presenting you

with a series of charts, most of the comments appear directly on the images themselves. The key point

for you to know is we have some decent supports just below 55 now, and it is possible to see a recovery

back to 56.50. Below 54.80 on a closing basis will expose 53.50. But in the current environment, if the

markets are left alone to its ways (ie without any official intervention) we will almost surely get another

chance to sell USD at more attractive levels than current.

Nov 202008

Fifth wave extensions can make you rich!

The easiest way to make money in any market is after a fifth wave extension. While identifying

the precise end point of an extension is often a challenge, you can become quite rich by joining

in once the correction starts. Typically, a market comes down to the level of 2nd wave of the just

completed 5th wave (as wave a), corrects higher (as wave b) and thereafter collapses as wave c to reach the 4th wave bottom (or lower!). In the last 3-4 months, there have been innumerable instances where we have seen this happen. Regular readers of this blog have been alerted to the

opportunities. Today, I am going to review those trades so that you can have a permanent record

in one place of how fifth wave extensions should be used to our advantage. Let us start with Oil.

If you had been on my mailing list before this blog was started in October, you were warned

when Oil was above $140 that we will go down to $50. As recently as 5th October, and on this

blog, you saw this post.

Today Oil is trading close to $52 as shown in this chart.

Now let us look at the S&P500. On 3rd April, I emailed several of you that we could recover

from the current level of 1367, but failure to stay above 1415 could trigger a sell off to around

1050. Here is the chart of April 2008, followed by the chart of 20th November 2008 (today).

For those of you who are interested in GOLD, this chart should open your eyes! Just a few weeks

ago, on 8th October, I wrote in your favorite blog that this precious metal was ready to collapse.

That was when the commodity was trading at 910, and analysts at Credit Suisse put out a bullish

report on Gold. Take a look at this chart below and judge for yourself. Gold has traded well

below $700 before recovering recently.

Let us look at a specific US Stock. Bank of America! This blue chip was at $26.61 back on 30th

June when I alerted you that we will see it down to around $18. In fact, some of you will

remember we bought the stock near there and made between 40 and 65% in a matter of days!

(that was the b wave rally). Here are two charts for your study.

Next, let us take a look at the Euro dollar. The EUR/USD was trading at 1.3560 on 12th October

when I warned you that we are on our way down to 1.25. Sure enough, it has gone there already.

Are you an emerging market buff? Then this chart of the Bombay Sensex should be revealing.

What is the lesson here folks? Technical analysis can be used to considerable benefit. Yes, when

it comes to pulling the trigger we all are scared. (Honestly, I made money in only some of these

recommendations because my stops were too close! And even then I could not risk a very large

sum. But those who had the staying power made millions. One of my clients saved over $7

million by shifting his GBP deposit into USD just before the collapse. But coming back to the

average Joe (the plumber or trader) we should definitely take small risks at the end of fifth

wave extensions. Please bookmark this post andshare with your friends. With best wishes. Ramki

COPPER

Dec 022010

Copper futures outlook

Copper is making a 3-week high as base metals are rallying. Firmer global equity market and supportive

economic data are cited for this move. Some are speaking of a looming deficit in copper supplies,

expected to push prices to record highs. Do we have anything different to say? Yes. Not because we

wish to be different, but because a five wave move is nearing completion. Take a look at the attached

chart of Copper (The conituation contract). Elliott wave analysis of copper suggests that once we reach

above 415 levels, there is a growing danger for prices to top out. The outer target is currently placed at

448. What could trigger a reversal up there? Honestly I havent the faintest idea. But I would urge

traders and hedgers to be aware of the phenomenon witnessed in millions of chart patterns that when a

five wave move finishes, we will get a correction of the entire move, usually back to the area of the prior

4th wave of one lesser degree. In the case of copper, this means a potential move of 25% down once we

top out. The key question is when will we know that copper has actually topped out? It is hard to say at

this point, but if one were to watch the intraday data, pehhaps he will be able to spot a mini 5th of the

5th of the 5th! But for most people the best way to deal with this is to wait for a sharp downmove, and

sell on a recovery with stops above the high seen. That often works! Good luck.

Dec 082010

Copper: short term outlook

On 2nd December I had presented elliott wave analysis suggesting that Copper futures would meet

some resistance around 417, and hence buying some out-of-the-money puts near there might be an

interesting trade idea. Surprise, today Reuters is reporting on copper that technicals are pointing to

weaker prices after it hit record levels at 413. In the short term, look out for a 50% recovery of the dip

from 413 to current lows. If prices start coming off quickly from there, you should join in. The initial

target will be below 365. Good luck.

Dec 102010

Copper: Edging closer to top.

On 2nd December I pointed out that we are in the 5th of the Fifth wave in Copper and that we

are likley to see the peak between 417 and 448. There is no change in that outlook for Copper.

(On 8th December I posted a short-term chart from a different provider showing a 5-wave

decline. Unfortunately, I have a feeling that there might be something wrong in that chart,

because todays image shows a 3-wave decline, which explains why we went up again to a new high). Anyway, in the big picture, we are still calling a top in the window mentioned above.

Copper has been strong because of demand from China. Lack of action on the interest rate front

from China was also supporting copper prices, just as Gold hit a new record level. Many analysts

are citing anticipated supply deficits next year as a reason why copper should remain firm.

HOwever, be aware that the markets tend to discount such news and maybe all this is getting

reflected in current prices. We shall see soon enough.

By the way, I have put back the links for free subscription by email and RSS reader at the top of

this page. You may wish to alert your friends about this. Best wishes. Ramki

Sep 262011

Elliott Wave analysis of Copper

The finest workers in stone are not copper or steel tools, but the gentle touches of air and water working at their leisure with a liberal allowance of time. Henry David Thoreau

I can amend the above quote a little and say The finest workers in Elliott Wave analysis of Copper is not Goldman Sachs or any other name you choose, but the completion of an extended

fifth wave, working with a liberal allowance of time -Ramki Ramakrishnan

After you have read the link in the quote above, let us take a look at what I wrote back in

December 2010. It was a bit ahead of time, because the end came only in February, and reached

462 (some $14 more than the preferred top). But what matters is IT WORKED! Today, we

reached the 2nd wave of the extended fifth (at $318) a move of over 30% even from the 448

level. Give it enough time, and we could see Copper reach the prior fourth wave level of one

lower degree, and that comes at 272 levels.

PS. SOme of you with sharp eyes would have noticed that I have changed the level where wave

2 was placed back in December 2010. But that does not affect the computation of the target for

the extended fifth wave. Of course, you already know that because you have read my book Five Waves to Financial Freedom where detailed explanations are given!

May 012012

Medium Term Outlook for Copper

So you are looking for a medium term outlook for copper! After my last Elliott Wave comments

that was posted on 26 September, 2011, we didnt revist the copper charts. I am sorry for the long delay, but I hope todays comments make you happy!

A five wave move was completed on Feb 20, 2011 at 462.55. Have we corrected that

adequately? Probably not. I think the dip to $300 marked the first step down, and we will likely

get abother go at that later on. Keep an eye on what happens around 415. Once we move to that

level (or beyond), any subsequent dip below $371 would confirm this view. But it should be

possible to figure out the end point of the c wave and get short near that top. C waves are always made up of 5 smaller waves, and the methods of anticipating the end of the 5th wave has

been explained in my book in detail.

Elliott Wave Theory, Cycle, Rules and Personality ExplainedElliott Wave TheoryThe Elliott Wave CycleElliott Wave Rules

EUR/USD example of Elliott Wave AnalysisWave PersonalityAlternation between wavesFibonacci Ratios in Elliott Waves

Fibonacci Number Series and Elliott WavesHow to use Fibonacci Ratio RetracementsExample of an incorrect use Fibonacci Ratio Retracements in real-world tradingExamples of how to use Fibonacci Ratio Retracements in real-world tradingCorrective WavesThe Elliott Wave Edge

Elliott Wave Edge How Elliott Wave Traders WinThe Elliott Wave EdgeHow do Elliott Wave Traders Win?Elliott Wave Analysis of Alliant Energy Corporation (NYSE: LNT)

Elliott Wave Analysis of Wockhardt LtdElliott Wave Analysis and Seth Klarmans call on Tesla MotorsElliott Wave Analysis of USD/INR (Indian Rupee)Fifth wave extensions can make you rich!COPPERCopper futures outlookCopper: short term outlookCopper: Edging closer to top.Elliott Wave analysis of CopperMedium Term Outlook for Copper

Documents

EWaves guide - elliott wave analysis copper