For all the Elliott boffs out there, this is an excerpt from an article they sent me, It doesn't mean a great deal to me but some of you may be following;
By Vadim Pokhlebkin
"Trading the news" is a technique any novice forex trader is intuitively drawn to. It's easy to understand why: Read most conventional market analyses, and you can't help but leave with a feeling that the catalyst for any action in currency markets is almost always a news report.
Well, if the news is the driver, let's watch the news. This past Tuesday (Sept. 12), for example, the U.S. Commerce Department released the latest – and the scariest ever – U.S. trade deficit number: $68 billion for the month of July, a new record.
Bad news? Sure. The U.S. dollar ended the day 60 pips stronger against the euro, though.
Today (Sept. 14), it was reported that the U.S. retail sales were "unexpectedly" strong in August, and the number of newly unemployed U.S. workers fell last week.
Good news? No doubt. But between 3 and 11 this morning, the USD lost about 70 pips to the EUR.
In both cases, prices went the opposite way of where the news suggested they should go. Yes, forex analysts will tell you there were "other reasons" that moved the markets on these two occasions. But it doesn't answer this question – the most important one, really: Next time an economic report comes out, are you long or short the USD? … I wouldn't know, either.
One of the alternatives to "trading the news" is trading wave patterns. No, it's not going to deliver every time; there will be "surprises." But unlike "trading the news," you won’t have to flip a coin before putting on a trade, either. The difference is that rather than focusing on events outside the markets, Elliott wave analysis studies the market's internal structure. And that brings a great deal of objectivity.
Last night (Sept. 13), for example, our Currency Specialty Service was bullish the EURUSD for these reasons:
1) "The rally from 1.1640 is incomplete.
2) "The setback from 1.2978 is in a corrective three waves.
3) "With the current setback having retraced just about 61.8% of the prior rally, a bottom should form at current levels.
4) "The favored Elliott wave count has the rally from 1.2460 as wave five in the advance…"
We also showed readers an Elliott-wave labeled chart last night to visually support that forecast.
The next morning (Sept. 14), as you already know, the EURUSD rallied…
You still feel like "trading the news"?
