A unique aspect of the Elliott Wave Principle is its forecasting ability. R.N. Elliott discovered this in the 1930s and realized that it was a great leap forward in technical market analysis.

Let’s take a look at an example of how we can forecast a turning point.

This chart shows the Switzerland stock market, the Swiss Market Index, using weekly bars. The decline in 2022 can be labeled as a leading diagonal wave one or as an alternate wave A. From that low, the Index traced out an up-down movement which can be labeled as waves A and B of a likely three-wave A-B-C correction.

When wave B turned at the 0.786 retracement of wave A and the advance in wave C was in operation, attention could then turn to where wave C might end.

We can use Elliott wave channel projection by connecting the start of wave A with the end of wave B and then paralleling that from the end of wave A. The resulting channel gives us a potential end point for wave C.

We can also use ratio analysis. And R.N. Elliott discovered that C waves often end when their length reaches equality with wave A.

With this in mind, when those levels were in sight on the 18th of March 2024, the European Short Term Update stated:

“The SMI (cash) index could have completed its wave C advance at 11,799.91, corresponding with the Elliott channel projection and just below the level where it equaled wave A.”

That peak was never exceeded. And since then, the Swiss Market Index has declined by 5%, making it highly likely that wave C of 2 or B is complete.

Elliott wave analysis gives us the ability to forecast turning points, often with eye-popping accuracy. If you want to stay on top of future turning points and trends, stay tuned to Elliottwave.com.