elliott wave theory applied to recent market development files/forecasting dinner... · elliott...
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Prague – 12th. February, 2009
Elliott Wave Theoryapplied to recent market developmentCFA - Forecasting Dinner 2009
Pavel Javorsky, Country Manager Czech Republic and Slovakia
October 07, 2008 2
Basic Market Fractal
October 07, 2008 3
FTSE-100 pattern in last 5 years
2500
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4/2001 4/2002 4/2003 4/2004 4/2005 4/2006 4/2007 4/2008 4/2009 4/2010
FTSE
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a
b
c
October 07, 2008 4
Markets are global
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9000
4/2001 4/2002 4/2003 4/2004 4/2005 4/2006 4/2007 4/2008 4/2009 4/20105000
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10000
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FTSEDAX
DJIA
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October 07, 2008 5
Fibonacci numbers 1-1-2-3-5-8-13-21-34...The Golden Mean 1,618 versus 0,618
October 07, 2008 6
Market strength leads to wave extensions
October 07, 2008 7
Market weakness or strength accumulation leads to triangles or irregularities
October 07, 2008 8
The Golden Spiral – natural phenomena(galaxy, shells, nautilus …)
October 07, 2008 9
US Stock market during last 30 years
DJIA
0
2,000
4,000
6,000
8,000
10,000
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16,000
1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
1987 crisis
2000 crisis
October 07, 2008 10
US Stock market during last century
DJIA
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
1987 crisis
2000 crisis
1929 crisis
October 07, 2008 11
US Stock market during last centuryon the LOG Scale (alternative pessimistic)
DJIA
10
100
1,000
10,000
100,000
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
(3)
(4)
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v5
i
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(5)2000 crisis
1929 crisis
October 07, 2008 12
DJIA priced in Real Money: ounces of gold-80% since 1999 top !
U.S. Stock Market
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1000001
920
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00
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DJIA
0
5
10
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35
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45
50DJIA/Gold
1999 TOP
1929
1965
October 07, 2008 13
US Stock market during last centuryon the LOG Scale (alternative optimistic?)
DJIA
10
100
1,000
10,000
100,000
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
(3)
(4)
1
2
3
4
v5
i
ii
iii
iv
(5)2000 crisis
1929 crisis
October 07, 2008 14
US Stock market during last centuryon the LOG Scale (alternative standard)
DJIA
10
100
1,000
10,000
100,000
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
(3)
(4)
1
2
3
4
5
i
ii
iii
iv
(5)2000 crisis
1929 crisis
a
b
c
i
ii
iii
iv
October 07, 2008 15
Current Stock market since 2007
1020
304050
60708090
100110
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PX-50 2007DJIA 2007NASDAQ 2007
How deep can we go? How long can it take?
October 07, 2008 16
Pattern correlation with Internet crisis y2k
1020
304050
60708090
100110
0 500 1000 1500 2000 2500
PX-50 2007DJIA 2007NASDAQ 2007NASDAQ 2000
October 07, 2008 17
Pattern correlation with crisis 1929
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60708090
100110
0 500 1000 1500 2000 2500
DJIA 1929PX-50 2007DJIA 2007NASDAQ 2007NASDAQ 2000
October 07, 2008 18
Still way to go on the LOG scale
10
100
0 500 1000 1500 2000 2500
DJIA 1929PX-50 2007DJIA 2007NASDAQ 2007NASDAQ 2000
October 07, 2008 19
Reference Book
Elliott Wave Principle – Key to market behavior
• Frost and Prechter
• New Classics Library 1978 …
October 07, 2008 20
MasterCard business model
Advisor Processor
Franchisor
MasterCard Worldwide
A financial services company, providing globally accepted payment products and brands
A payments technology company, operating a worldwide transaction processing network
A global professional services company
offering payments-related consulting, information and outsourcing services
October 07, 2008 22
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Jan-02
Apr-02
Jul-02
Oct-02
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Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
(In
Bill
ions
)
SpendingPulse total retail sales results compare favorably with broad survey-based sources
SpendingPulseDepartment of Commerce
SpendingPulse total US retail sales monthly results have a SpendingPulse total US retail sales monthly results have a better than .9 correlation with the final government survey resubetter than .9 correlation with the final government survey results.lts.