Читать книгу Supertiming: The Unique Elliott Wave System - Robert C. Beckman - Страница 23

Getting back to our previous example in Figure 4, we started with the suggestion that Wave 1 in that illustration encompassed say, a 20-point move in the D.J.30. When Wave 2 started, our assumption would be that it would comprise less than a 20-point down move. So should Wave 1 have begun at the D.J.30 level of 800, terminating at 820, we would “forecast” that the move downward from 820 would terminate above 800 on the principle that Wave 2 will not retrace the entire Wave 1 movement.

Also, for the purpose of illustrating the rule that Wave 4 would not retrace all of Wave 3 but related in amplitude to Wave 2, we suggested that Wave 3 be 30 points. Assuming a classic pattern, with Wave 2 consisting of a 6 point amplitude, we would then establish that the downwave that begins after Wave 3, when completed will be (a) less than 30 points, (b) more likely to be in the region of 8 points.

Now we can begin to fill in a few hypothetical numbers on our imaginary D.J.30 chart in Figure 4. Wave 1 begins at 800 and terminates at 820. We then have a 6-point down move which is Wave 2 taking us down to 814. Then comes the up move of 30 points to 844 for Wave 3 and this is followed by corrective Wave 4 of 8 points pulling us back to D.J.I.A. 836. Before demonstrating how we can make profitable use of the phenomenon we’ll now add a further supposition, viz. that Wave 5 is of the same amplitude as Wave 1, lifting the index 20 points upward to 856. We’re now ready for the “crash”. What do we do as investors? How do we incorporate the overall scheme into an investment strategy?

In the first instance, under no circumstances would the investor have considered buying any shares on the move up from D.J.30 836 to 856 for this is a Wave 5 formation. He would have been quite happy to buy in the area of 814, realising his downside risk was no more than 12 points since Wave 2 would not retrace all of Wave 1. He would then be quite happy to buy following completion of Wave 2. He would also be quite happy to buy following completion of Wave 4 when the D.J.30 dipped to 836, realising that his downside risk was less than 30 points, and more likely 6 to 8 points, since Wave 4 would not retrace all of Wave 3 but would probably approximate the amplitude of Wave 2. In addition, the cycle was incomplete. Wave 5 was still to come.

The investor would naturally wish to begin disposing of some issues near the top of Wave 5 and would not consider making any repurchases until the D.J.30 had fallen a minimum of ten points. The rule which has been established is that the correction which follows the fifth wave, not only acts in correction of that fifth wave but also acts to correct the entire movement. Consequently, the downward wave following the fifth wave will be greater in amplitude than any of the preceding corrective waves. The largest corrective wave was Wave 3 involving a downward move of 8 points, thus the minimum expectation of the corrective wave following Wave 5 would be more than 4 points. We would then “forecast” that the minimum expectation for the next downward move in the D.J.30 would be 848 (856-8=848).