|
Figure 6-9 displays five and a half
years of price history for soybeans. The explosive rise in
1972-73 emerged from a long base, as did the explosion in coffee
prices. The target area is met here as well, in that the length
of the rise to the peak of wave 3, multiplied by 1.618, gives
almost exactly the distance from the end of wave 3 to the peak
of wave 5. In the ensuing A-B-C bear market, a perfect Elliott
zigzag unfolds, bottoming in January 1976. Wave B of this
correction is just shy of .618 times the length of wave A. A new
bull market takes place in 1976-77, although of subnormal extent
since the peak of wave 5 falls just short of the expected
minimum target of $10.90. In this case, the gain to the peak of
wave 3 ($3.20) times 1.618 gives $5.20, which when added to the
low within wave 4 at $5.70 gives the $10.90 target. In each of
these bull markets, the initial measuring unit is the same, the
length of the advance from its beginning to the peak of wave
three. That distance is then .618 times the length of wave 5,
measured from the peak of wave 3, the low of wave 4, or in
between. In other words, in each case, some point within wave 4
divides the entire rise into the Golden Section, as described in
Lesson 21.
Figure 6-9
Figure 6-10 is a weekly high-low
chart of Chicago wheat futures. During the four years after the
peak at $6.45, prices trace out an Elliott A-B-C bear market
with excellent internal interrelationships. Wave B is a
contracting triangle. The five touch points conform perfectly to
the boundaries of the trendlines. Though in an unusual manner,
the triangle's subwaves develop as a reflection of the Golden
Spiral, with each leg related to another by the Fibonacci ratio
(c = .618b; d = .618a; e = .618d). A typical "false
breakout" occurs near the end of the progression, although
this time it is accomplished not by wave e, but by wave 2 of C.
In addition, the wave A decline is approximately 1.618 times the
length of wave a of B, and of wave C.
Figure 6-10
Thus, we can demonstrate that
commodities have properties that reflect the universal order
that Elliott discovered. It seems reasonable to expect, though,
that the more individual the personality of a commodity, which
is to say, the less it is a necessary part of human existence,
the less it will reliably reflect an Elliott pattern. One
commodity that is unalterably tied to the psyche of mass
humanity is gold.
|