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Tuesday, February 12, 2013

Manuel Aparicio Theory. Natural Analysis: A natural way of looking at the markets.

Tuesday, February 12, 2013

Manuel Aparicio Theory. Natural Analysis: A natural way of looking at the markets.

Tuesday, February 12, 2013
Manuel Aparicio Theory. Natural Analysis: A natural way of looking at the markets.


After studying the two main market analysis theories (developed by Charles Dow and Ralph N. Elliott) which led to technical analysis and the various tools and indicators created over the years, we are left wondering about the validity of Dow's theory regarding the nature of price movement in that "all is discounted in the price" (that is, the news, earnings, fears and ambitions) and secondly, we also have doubts about the truthfulness of the premise that there is "smart money and dumb money" leading to the four stages of price movement (accumulation, big move up, distribution, big movement down). Both assertions, we believe, are in contradiction with the fractal quality of price movement. In contradistinction we agree with the basic tenets of Ralph N. Elliot's waves theory.  He was the first to note that price moves in waves and that these waves are governed by man's social nature.
Our theory, to analyze price movements in the markets, goes farther and considers that although it is human nature what governs price movement, it is nature itself, nature regulated by its own laws, what ultimately controls everything and therefore price movement. In other words, price is ultimately governed by the laws of nature. 
When postulating our theory we have considered that nature respects its laws with accuracy and that fractal theory inherently has to comply with these laws.
We have tested our hypothesis by using all the tools based on the Fibonacci sequence, countless hours of trial and error as well as we have counted waves. From here we have developed our new rules which we believe improve the accuracy and speed of predictions based on wave counting. 

Elliott determined the existence of 3 rules:
1) Wave 2 always retraces less than 100% of wave 1.
2) Wave 3 cannot be the shortest of the three impulse waves, namely, waves 1, 3 and 5.
3) Wave 4 does not overlap with the price territory of wave 1, except in the rare case of a diagonal triangle.

I have determined the existence of 3 new rules

New Rule 1: We have repeatedly observed and proves that Elliot's 3 rules and our 3 "New Rules" for use with the count of waves respect accuracy to the smallest fraction. 

New Rule 2: We have repeatedly observed and proved that retraces called: waves 2 and 4 (both measured from the start of the impulsive wave until it ends) will be determined by whether this retrace is less than or greater than 50%. If the retrace is less than 50% this will be a wave 4 and the impulsive wave will be a wave 3. If the retrace is greater than 50% this will be a wave 2 and the impulsive wave will be a wave 1. 

Rule 3: Waves 3,4 and 5 must be contained within a fan line that begins with wave 1 except for wave 2 that may be out of this fan line.

"Because accuracy, any failure, by less than this is, breaks the 3 rules of Elliott and our 3 new rules".

All rules must respect fractal theory.

Simplicity on waves count:

With our 3 new rules, wave counting is simple because, we only have to determine waves 2 or 4 by using 50% retracement, been careful with accuracy.

Quickness on waves counting:

Our 3 New Rules allow us to make decisions quickly and on real time.


Case A)

SPX: 1928 to date. Daily log chart.

You can watch how primary wave 2 (62.28) retraces more than 50% (63.95) and cycle wave 4 (768.63) retraces less than 50% (767.29). We can also observe how cycle waves 3,4 and 5 are contained within a fan line that started with wave 1 on  07.08.1932. This 85 years chart shows how accuracy works on waves counting. 

Case B)

AAPL: 1.5 years, daily chart.

On december 29,2012, we called a truncated minute wave 5 (after we relabeled as a minor wave 5) so, an intermediate wave 3 (after we relabel as primary wave 3) was in place and we forecasted a downfall to 336.17 (subsequently we have predicted AAPL will fall to 300). This was because we weren't using our 3 new rules as we have presented it to the community this day
Why we call for a truncated minute (minor) wave 5?. Because the 50% retracement was 501.89 and the minor wave 4 retraced down to 502.82 (less than 50%), fulfilling our new rule 2. After, went up to 600 (+/-) as a truncated minor wave 5, retracing again down to 498.33 (greater than 50% or 501.89) going up again then retracing a third time to 501.74 ( greater than 50% or 501.89). Accuracy is the hardest rule. 

Also, minor waves 3, 4and 5 were contained within a fan line that begins with the wave 1. Fulfilling our new rule 3.

These were the post we published on our blog, at that time:


The content on this post is provided as information only and should not be taken as investment advice. All post content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this post are solely the opinions of the author and are for information purposes only. Any investment decision that results in losses or gains made based on any information on this post is not the responsibility of the author. The author may from time to time make statements about certain investment vehicles and strategies, but it is not to be taken as investment advice. Again, it is just the author expressing his opinion only.These theory is being published only for validation by community experts. Once validated may be used for the purposes that the author considers.All information published in this post belongs to the author intellectually and commercially and may not be used by others for commercial use or to provide information to the general public. The author has used some information from wikipedia,stockcharts and Elliott wave principle.

Thursday, January 24, 2013

AAPL 16 year, weekly chart. Our primary wave 4 target at 300 continue its way.

We continue to monitor our forecast and we see that  primary wave 4 is probably in its wave 3 of wave c. We will continue to monitor and report.

AAPL 16 year, weekly chart.

Wednesday, January 23, 2013

$SPX "Big picture" bearish count.

our current count considers a bigger degree outlook with supercycle waves instead of cycle waves, as we posted yesterday. Our main count (bearish) will be negated if price exceeds the highs of 2007 at 1576.09. The bullish alternative is considering the cycle wave 2 instead of the primary wave A.

SPX, 7 years daily chart.

Monday, January 21, 2013

$SPX: Logarithmic monthly EW count,1928 to date.

We are sharing with our community our latest monthly Elliott waves count, from 1928 to date. This time we present the bill in a chart with logarithmic scale, which allows us a better visualization of all the waves. We are trying,also, to enlarge the degrees of the waves to reach Supercycle waves,what seems most appropriate to reality. This logarithmic and our first arithmetic scale counts, both indicate the next fall of markets, which would be the last downfall since the beginning of this correction process  of the large increase of price from 1972 to 2000 (2,000% in 28 years), as a cyclical wave C to complete supercycle wave II.

Monday, January 14, 2013

$AAPL: Mortally wounded.

EOD price has finish at minute wave 1 (orange) milestone but price is mortally wounded.