When to Apply Ellipse

[keninoregon]

When is the appropriate time to use the Ellipse tool?

I have run into many examples, in stocks and commodities, like the following:

Using the Original Elliott count, both January Soybeans and Soybean Meal show waves 3 and 4 completed and a move toward wave 5 highs.

However, if I switch over to the Alternate 2 - Short-term Elliott wave count, it shows that each wave 3 has not completed five waves up yet.

Do I wait until the short-term count labels five waves in wave 3 before applying the Ellipse tool?

I am going to assume that when the short-term count shows five completed waves in wave 3, then the original Elliott wave count will be relabeled with a new wave 3 high, or possibly an ABC.

[MR]

Off the top of my head I can think of several ways to apply the Advanced GET Ellipse study:

- from Primary (P) to Primary (P) pivots.
- from Primary (P) to Major (J) pivots.
- from Primary (P) to Intermediate (I) pivots.
- from Wave 2 to current Wave 3.
- from beginning of a sequence to current Wave 3.

There can be other variations, but these are the first ones coming to mind. For example, one variation would be using the Ellipse study for swing trading, where we attempt calculations using pivot to pivot Ellipse application.

- - - - - -
In your examples you never mentioned anything about the 5/17, 5/35 or 10/70 Oscillators. It is the oscillators that better determine if or when an Elliott wave sequence might be completed. The actual labeling of a wave count does not necessarily mean the wave is completed. If you use the original or alternate wave counts you need to match the appropriate oscillator with the wave count being used for that Type 1 setup.

Click here to look at some Oscillator examples.

Apply, also, the 1.40 Rule to the oscillator appropriate for that wave count needed in a Type 1 setup. If it conforms to this rule, it continues to be an acceptable setup.

Click here to see a recent example of this using all three oscillators.

Click here to see another 1.4 and oscillators example.

Use of the Ellipse study works best when matched to this and other Type 1 or 2 criteria. Under basic Ellipse application rules we want to wait for the 'Normal' Ellipse to match price and time. If you believe or are interpretating a market as being strong, then you can toggle on the 'Short' Ellipse and use it as a trigger. Just remember, however, the Short setting has more risk associated with it. Often a Short Ellipse can pause a retracement, but it does not always pick the final end of the retracement.

If I can find some free time, I will try to post later some examples of how one might use the Ellipse study on the Soybean and/or Meal.

If you would be interested in reviewing some other examples of Ellipse applications,
click here.

[MR]

Here is a little example of a Ellipse application variation just mentioned in the previous post....

[MR]

Here is a quick Jan '04 Soybean Ellipse sample. You can apply the same methodology to Soy Meal as it is a very similar pattern....

[MR]

I was doing a search for previous discussions on the Ellipse study, and found this interesting Ellipse discussion at another thread. To review the thread from the beginning, click here.

[MR]

Ellipse, price swing

How far will a price swing retrace before the original trend can continue? This has been a question that all traders have asked at one time or the other. Fibonacci Retracement studies offer some help in this matter. However, they just provide levels such as 25% retracement or 50% retracement. If one level does not hold, the trader looks for the next Fibonacci level and so forth.

[MR]

Which level will hold and allow the original swing to continue its trend? How far will this swing retrace before the original swing continues its trend? The TJ’s Ellipse study is a technical solution designed to help answer that question.

[MR]

Just looking at the data could you tell this was to going to retrace 62%? How can you better determine where a retracement is to go?

[MR]

The Ellipse study takes the original swing in question and discerns which
time and price level should hold any retracement of the original swing.

[MR]

If the Time and Price Level holds, the original swing should continue its original Trend.
The Time and Price Level is displayed on the chart in the shape of an Ellipse. Hence the name: TJ’s Ellipse.
As long the Ellipse (Price and Time) holds, the original swing should take the prices lower, in this example.

[MR]

How TJ’s Ellipse is designed to work...

The user identifies the swing (high and low). This is used to determine a room size and the current strength of the market.

Using these values, Advanced GET calculates a projected path for the Ellipse to intercept the prices. In actual use, the TJ’s Ellipse will continue to move towards the prices. When the prices meet (or hit) the Ellipse, the Ellipse stops moving and provides a solid Price and Time level.

At this time, it is critical for the Ellipse to hold the prices. If it holds, then the original swing can continue.

[MR]

Ellipse 'A' is the Ellipse generated from Swing 'A'. As long as this Ellipse 'A' holds the prices, Swing 'A' should continue its trend higher.

[MR]

Ellipse 'B' is the Ellipse generated from Swing 'B'. As long as this Ellipse 'B' holds the prices, Swing 'B' should continue its trend higher.

[MR]

Ellipse 'C' is the Ellipse generated from Swing 'C'. As long as this Ellipse 'C' holds the prices, Swing 'C' should continue its trend higher.

[MR]

As the market continues to trade, new swings are generated. For each new swing, the software can generate a new Ellipse.

As longs as the corresponding Ellipse holds, the original swing should continue its trend.