It is now crunch time for that model. As you can see from the zoomed in update below, the model remains on track so far. This model is busted if we get just a fairly small 130 point move up on the DJIA tomorrow. If the model is correct we should expect a pretty rapid decline down below 15300.
New readers should internalize the fact that this model does not have to play out in order to receive benefit from the Elliott wave principle. EW is not a crystal ball! No matter how many times I tell people this, they just fail to internalize it. This is probably the single hardest topic for those new to the science of socionomics to understand. The reason is that the traditional analysis model was that someone would come on CNBC, make a gut feel call, and then either be lauded as a hero or forgotten as a bum based on what happened next. That is just what the herd currently expects from stock analysis. But that model completely ignores the probability driven model of herding behavior which controls so much of what we collectively do. So calling the future is all good and fine and in fact a basic requirement but what sets Elliott waves apart from other analysis techniques is that it will tell you almost immediately when the model is wrong and that allows you to exit trades with small losses before they become big ones.
Scientists don't always get the formula for that next new material right. The create experiments and the results guides their next moves. This is exactly how Elliott waves work and it is completely different from how any other market timing mechanisms work.
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