Multi-scale Elliott counts with Gann and Fibonacci confluence

Keep every wave-magnitude in view

Elliott-wave analysis is the hierarchical labeling of impulsive and corrective price swings. The labels imply later structure and ratio-based objectives.

Wave-magnitude is the size of a labeled swing. It is isolated by compressing or expanding the same hourly series until intermediate, minor, or minute structure is readable. The most compressed view showed intermediate waves. A less compressed view showed minor waves. The uncompressed hourly chart retained minute detail.

Daily index highs and lows were treated as unusable for Gann projections because they were not simultaneous prints. Hourly index levels were treated as actual values and therefore usable.

Ratio objectives and a sequential plan

Elliott-wave price objectives are built from the ratios 0.618, 0.5, 0.382, and 0.236. A fibonacci-retracement is a pullback objective taken as a fixed fraction of a completed swing. Penetration of one retracement is treated as a cue to look for support at the next ratio.

A sequential plan to buy a halt at a 0.382 retracement, exit if that level breaks, then repeat at 0.5 and if needed at 0.618 is described as intellectually simple but emotionally impractical for most traders.

A Gann angle on the same price

A gann-angle is a geometric price-time line drawn from a significant high or low, expressed as a ratio such as 1×1, 2×1, or 1×4. A Gann line from a significant high or low is described as intersecting an Elliott retracement in almost every case. That overlap is confluence: a price where a Gann angle and an Elliott or Fibonacci retracement land together and can be treated as a single testable level. The overlap is described as giving a more definite entry price and a clearer exit if it fails.

A 1×1, or 45-degree, Gann line need not appear as a 45-degree slope when software rescales the line to the amount of data and the number of days on screen. A Gann line left unviolated for longer is treated as stronger support or resistance. The crossing of several Gann lines is treated as a more probable turning area.

A working hourly count in late August 1987

In late August 1987 the working hourly count labeled the fifth wave of Intermediate Wave 3 complete in mid-June and expected a multi-week Intermediate Wave 4. A 2×1 Gann line from the May 20 low at 2205 reached 2465 on August 27, matching the 50 percent retracement of a 527-point rise to 2732. The 38.2 percent, 50 percent, and 61.8 percent levels were at 2530, 2468, and 2406.

An alternate count and clustered Gann lines

An alternate count still placed a fifth-wave high at or just before 2732 and still implied a decline. On shorter hourly windows Intermediate Wave 5 was labeled complete in five subwaves, with A and B finished and C underway. Support was near 2639 to 2640, where several Gann lines met the prior minute-wave-4 low. The index bounced from a 2639 hourly low on August 28 to a 2684 hourly high before declining on September 1.