Elliot Wave theory .... Strong trend shares are more profitable

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Derek  9 May 2018


If you believe in the Elliot wave theory, one will get a 5 leg bull market after the abc correction. The 3rd leg is usually the most profitable. The first leg, where we are now, is usually a slow start. Are we in the first leg? Hind sight will confirm later, but I do believe we are.

All markets are about unchanged after Trump pulls out of Iran deal.

Unlike the HangSeng and the S&P500 that has not broken their triangles, the NASDAQ did! Notice that it also broke the EMA8 and 50 day SMA 3 days ago.

Strong trend shares just have the tendency to move better than the pack. Although the S&P500 was virtually unchanged, the strong trend shares made profitable gains.
Jacobs Engineering Group was the leader on the S&P500 yesterday. After making a double bottom on support it just smashed all resistance.

My all time favourite, Bank of America, also lifted off support and broke my trend line.

JSE Technical:
In the absence of much to show on the JSE, I must show Tencent. Notice the double bottom with divergence. Tencent also broke my trend and EMA8 lines. Notice what FrontRunner is doing .... rising bottoms and last 3 months tops are broken.

Mondi's drop was created by going ex-dividend, but now it has lifted off support again and broke the EMA8 line.

It might be worth your while to Google the Elliot wave theory, but be warned as the cycles are never so clear as they say. They then make it believable by making small secondary waves inside an existing major leg and then sometimes even more waves inside the secondary waves. I just rather stick with my overbought/oversold trend line system.

Enjoy your day.
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