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Elliott Waves as a Market Timing Tool? "Yes."

Ex-Wall Street trader on "fundamentals" vs. Elliott waves

by Vadim Pokhlebkin
Updated: May 23, 2018

Todd Gordon's resume includes two Wall Street firms and a long record of trading his own money. Today, Todd is the founder of TradingAnalysis.com and a regular contributor to CNBC shows like "Fast Money" and "Squawk on the Street."

On May 10, we sat down with him in our ElliottWaveTV studio to learn more about his very transparent, Elliott wave-based trading style.

In this clip: fundamentals vs. Elliott waves; gauging an opportunity; market psychology.

Vadim: Today in our Elliott Wave TV studio, we have with us Todd Gordon of TradingAnalysis.com and a close friend of HELP International. Todd, our viewers may know you from your appearances on CNBC, shows like Squawk Box and Fast Money. We've also featured some of your work in our chart of the day videos recently. The first question I have for you is when you go to a show like CNBC's Squawk Box, for example, much of the discussion in those shows focuses on the market's fundamentals.

Todd: Yup.

Vadim: Yet you take a decisively different approach to the market. You focus mainly on technicals. The backbone of your analysis in fact is Elliott Wave.

Todd: Yeah.

Vadim: You obviously see some advantages to that. Can you tell us what it is?

Todd: Sure, first of all, thanks for having me, Vadim. Thanks to you and Robert and Tyler for those great chart of the days. I hope you guys are all watching those. Great to be in the offices. Elliott Wave is obviously the backbone, as you said, to my trading. The majority of the financial mainstream media likes to focus on the fundamentals because that's what's taught. That's what people understand in university. That's what's pitched to the investment community. I'm not alone in this in that almost every hedge fund and money management organization has an element of timing their fundamental ideas. I think that's key. I think it's important to have an idea of what fundamentals are driving the market but you have to be able to time. You have to be able to manage risk and understand when your fundamental idea is in fact being reflected in price change. When you can't fight the crowd, even though if your fundamental idea is right, you need to have the community behind you to drive price. Your timing has to be right and you have to know when the sentiment has changed away from your fundamental driver and contain the risk. Don't let them think, I don't want anybody to think that the big hedge funds don't have a department that is managing the trends and the corrections to time their ideas because they are.

Vadim: So for you, it's mainly a market timing tool.

Todd: Absolutely, it's timing and it's not only that. It's when the psychology is representing what the underlying fundamentals should be. Sometimes, price reflects what should be in the market and sometimes it doesn't. That void between the two represents opportunity. You got to trade the crowd. Sometimes you trade with 'em. Sometimes you trade against 'em but you do so with a very defined plan as you go into the trade. There is no better methodology out there in the world than Elliott Wave to gauge where the current positioning is, to know when there's opportunity. Again, is that fundamental idea supposed to be driving the markets? Which we all know, it's not that idea. It's peoples' belief in that idea that drives the price.

Vadim: Market psychology.

Editor's note: In the full version of this interview, you'll see Todd Gordon explain why technical analysis still works in the age of AI; examining Elliott wave patterns in QQQ and NVDA to see if the trades are ripe for harvesting, and much more. Follow the fast, free steps below to watch the full interview.

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