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Paul Mosgovoy
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Market Masters: Livermore, Wyckoff and Loeb
  • Russell 2000: Next Leg May Be Underway 2 comments
    Aug 7, 2014 11:31 AM | about stocks: IWM

    The past several days have shown how difficult it is to call a continuation reversal in the middle of a trend (and why it is important to enter early).

    It looks at this point, that the iShares Russell 2000 ETF (NYSEARCA:IWM) has completed its counter-trend move and is about to continue its next leg lower.

    If the IWM continues to adhere to an Elliott Wave structure, it is during this move (Wave iii of Wave 3) that will get the attention of the general public and the media.

    (click to enlarge)IWM Daily Chart

    Chart by TeleChart

    This area of the move is what is termed the "Prechter Point", where there is a recognition and admission that the overall trend has changed.

    Of course, this recognition happens well after the fact.

    If we go back to the July 3rd analysis, we see just how ephemeral it really is during a reversal. It seems to be an area that stands still in time.

    Richard D. Wyckoff refers to this exact phenomenon in his book titled: "Studies in Tape Reading".

    Disclosure: The author is long TZA.

    Additional disclosure: Illustration only. Not investment advice.

    Themes: Small Cap, Russell 2000, TZA Stocks: IWM
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Comments (2)
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  • Lulzasaur
    , contributor
    Comments (5) | Send Message
     
    Hi Paul,

     

    Does the recent move in the IWM invalidate the elliott wave count?
    11 Aug 2014, 03:36 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (117) | Send Message
     
    Author’s reply » Thanks for the question Lulzasaur,

     

    I will be posting an update before the end of the day.

     

    The short answer is no but it has started to get complex which is one of the reasons that I tend to stay away for relying on Elliott Wave.

     

    I will provide my view of the count as well as a chart that shows that we are in a trend-line test.

     

    Thanks,

     

    Paul
    11 Aug 2014, 04:14 PM Reply Like
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