By Elliott Wave International
Think about the last time you watched a great athlete perform an extraordinary feat of strength, agility or artistry.
What part do you remember most?
Chances are, it’s not the running back and forth on the court mid-game, the 100 sit-ups on the side of the pool waiting one’s turn, or the silent scanning of the billiard table layout.
No, the parts that stick in your mind are the slow-motion replay of the ball soaring 23 feet mid-air from the 3-point line and then, SWOOSH! clean into the basket. It’s the last heart-pounding step off the diving board into a triple twist only to breach the water with a pebble-sized splash. And it’s the 8-ball ricocheting off the sides of the table, zig then zag then right into the corner pocket.
But here’s the thing. The years of training that shape these unforgettable triumphs aren’t about what comes after the throw, leap, or strike into thin air. It’s about the mental and physical discipline that comes before in the countless hours spent designing and redesigning the most likely winning lay-up until all you have to do when your turn is up is…
…release.
This is exactly what it means to become a successful trader as well, though you wouldn’t know it from the popular financial media. Like their sportscasting counterparts, the main focus tends to be on the size of the winning shot or stock (as is their case), and not on what goes into ensuring that shot is made.
On March 15, this Barron’s headline exclaimed:
“Amazon, Alphabet, and 8 Other Beaten-Up Growth Stocks Set to Soar”
Okay. But why? Because they did it before; because “Wall Street loves” them; because they’re so battered down the only way to go is up?
Those arguments only see the shot. When in fact, these growth stocks will soar when, and only when, a clearly defined bullish technical set-up develops on their charts.
QUESTION: Would you recognize such a set-up if it did?
Well, our new free report ensures you can do just that. In “5 Easy-to-Spot Chart Set-ups to Help You Nail Market Reversals,” three of Elliott Wave International’s experienced technical analysis instructors have joined forces to create a masterclass in identifying and implementing these high-confidence arrangements.
One such set-up from the report is the contracting triangle Elliott wave pattern, pictured below in a bull and bear market.
Again, the real action of this pattern occurs behind the scenes, in a lengthy sideways move. It’s 90% set-up and 10% shot, or as EWI’s chief market analyst and “5 Easy-to-Spot Chart Set-ups” instructor Jeffrey Kennedy says, it’s a “ready, aim, aim, aim some more, and then fire!” kind of opportunity.
How this plays out in real time is captured best in the performance of Apple Inc.
– How ‘Bout Them Apples? –
2020-2021 saw Apple Inc. stock stuck in a multi-year long consolidation. Mainstream bulls were dropping like flies out of boredom. The May 28, 2021 Barron’s article showcased a slew of analyst downgrades from “neutral” to “sell,” forecasting a “30% drop” in Apple stock “if iPhone sales continue to slow.”
Added the June 1 Bloomberg article: “Once Tech’s Golden Child, Apple Loses Its Luster as Scrutiny Grows.”
The very thing that convinced mainstream analysts of Apple’s rot — i.e., sideways price action — was the same thing that bolstered our confidence in the stock’s upside. Namely, that price action was the hallmark of an Elliott wave contracting triangle.
On June 8, in his Trader’s Classroom video lesson, editor Jeffrey Kennedy showed this bullish set-up in Apple and said:
“I don’t think there’s an Elliott wave pattern more frustrating than the triangle.
“I think the most important aspect of a triangle is that it acts as a harbinger of a change in trend… If you see a triangle taking shape, understand that the party is almost over. Triangles always precede the final move in a sequence, so pay attention next time you see one.”
“Once complete, you can count on price to thrust to a new extreme.”
From there, AAPL thrust out of its triangle and soared into the $150 zone. Then, on September 8, Trader’s Classroom revisited Apple to confirm that the stock’s upside was still very much intact.
And, as this final chart shows, AAPL continued to rally right up to Jeffrey’s initial target.
It’s easy to remember the winning shot. But as this exmaple shows, the time to pay closest attention to market action is in the quiet build up long before the triumphant swoosh!
Now you understand why the contracting triangle was included in our “5 Easy-to-Spot Chart Set-ups to Help You Nail Market Reversals, and why Jeffrey Kennedy was the chosen instructor for that video lesson.
In it, Jeffrey leaves no questions about contracting triangles unanswered, including:
- Where they can occur
- How to recognize them on a price chart
- And how to calculate a potential price objective for the thrust following its completion
In turn, each of the five lessons from this free report are in the best possible hands. And so, you too will be.
35-plus minutes. 3 esteemed EWI instructors. 5 game-changing set-ups for every market on every time frame.