Non Scientific Elliott

One of our old members wrote to us today. He said “Mukul I miss Elliott Wave approach, you were one of the best Elliotticians. But I can accept the supremacy of statistics”. He on one side was upset and on the other side accepted the way we have evolved the research systems at Orpheus. We thank all our readers and members who have been with us over the last 7 years. You have given us confidence to challenge old systems, create new systems but more than anything embrace the best of the old with the improved new, a monumental feat.
Before embracing the old with the new, one has to ask tough questions. Some of these questions have rarely been asked by technicians on an open forum. Why Elliott wave despite the decades long following has a poor scientific acceptance? Why such a strong pattern recognition tool failed to validate itself scientifically or statistically? Why Elliott can’t be used for a portfolio approach? Why was Elliott not acknowledged by Mandelbrot when he wrote ‘Multifractal Walk down wall street’ in Scientific American in 1999? Why are technicians split when it comes to Elliott? Why Robert Prechter’s DOW 400 forecast evokes diverse responses? If Elliott can encompass all technical patterns, why can’t it work on relative or intermarket patterns? Why do Elliotticians ignore the work done by technicians like Plummer, who explain a Triad pattern as the real pattern behind Elliott wave? Why do we have two disconnected school of Elliotticians, the Neely and Prechter club? Why is there no hypothesis testing for previous 4 wave support rules? Why should Elliotticians defenselessly let Statisticians tear apart the subject of market patterns? Why can’t we make market patterns academic? Why can’t Elliotticians prove the reason for the longest 3 wave and the reason for 4 wave not overlapping the 1 wave high?
There are many answers to all the above questions. First, it is like what Herbert Simon said, we never will have enough information. Second, Elliott addresses price but not time. Third, we never started from the scratch. We never dared to understand the rule, we just accepted it. If you are reading our thoughts for the first time, we urge you to read our other articles on the subject.
Article 1 – Demystifying Elliott
Article 2 – Can Time Triads create the head and shoulder fractals?
Article 3 – A Dow Theory
Article 4 – Revisiting Time Triads
You can find a lot of material related to our quest with objective Elliott on our blogs in the time triads section. Irrespective of where we go tomorrow, how academic we get, at the heart of all science is pattern watching. And there’s always a stage when things can’t be proved scientifically. So just because some thing fails statistically or scientifically at a certain point of time, should we discard it? We won’t discard Elliott, but we would definitely give it lesser importance over a statistical system approach. We will continue to dedicate a part of our time watching market patterns, but we will filter investment or trade ideas statistically. This weekly report is designed to study Elliott waves, some time using the classic approach, some time using the modern approach. We have just have one aim. We want to see how well Elliott confirms our system approach, our long and short filtered ideas and our Indices.
This report carries Elliott and Technical perspective on 8 Global Indices and 4 Indian Sector Indices.

You can also download the report from our Reuters Store
Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings from 1 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform. 100 is top relative performance and 1 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick. Jiseki is another name for Performance cycles, time triads and time fractals. The signals are illustrated as a running portfolio and as Jiseki Indices. These signals can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades.
Jiseki Interpretation. Signals are interpreted as crossovers between various Jiseki Cycles. All three Jiseki cycles (Jiseki 1,2 and 3) depict different time frames. Example: An asset is ranked above 80 percentile and all the three Jiseki cycles are pointing lower, this suggests a running SHORT SIGNAL. Our Jiseki Indices use different kind of exits based on price and Jiseki Cycles. We have color coded the (Jiseki 1>Jiseki 2) SHORT zones with brown sandy (burlywood) and grey (Jiseki 1>Jiseki2) for LONG SIGNALS.
Coverage Global: Dow 30 components, Global Indices, ETF SPDRS, Commodities
Dan-Andrei Rusu graduated in 2005 the Faculty of Economics Cluj-Napoca, “Dimitrie Cantemir” University. In the same year he joined BT Securities as a financial analyst. He is currently the Head of Research at BT Securities and a speaker with Romanian Brokers’ Association. He is an MTA (Market Technicians Association, New York) affiliate and cleared CMT level 1 exam. He is a contributing columnist for Orpheus Capitals for the ALPHA GLOBAL INDICES.