Author Patrick MontesDeOca, Director of CMT Group

Posted: 13 Feb 2012

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The following was excerpted from R. N Elliott’s book “Nature of Things”

Human emotions, as mentioned in the preceding discussion, are rhythmical. They move in waves of a definite number and direction. The phenomenon occurs in all human activities, whether it is business, politics, or the pursuit of pleasure. It is particularly evident in those free markets where public participation in price movements is extensive. Bond, stock and commodity price trends are therefore especially subject to examination and demonstration of the wave movement. 

This treatise has made use of price movements in stocks to illustrate the phenomenon, but all the principles laid down herein are equally applicable to the wave movement in every field where human endeavor is registered.

A completed movement consists of five waves. Why this should be five rather than some other number is one of the secrets of the universe. No attempt will be made to explain it, although, in passing, it might be observed that the figure five is prominent in other basic patterns of nature. 

Taking the human body, for example, there are five extensions from the torso – head, two legs, two arms; five extension form head – two ears, two eyes, the nose; five extensions in the form of fingers, from each arms, and in the form of toes, from each leg; five physical senses – taste, smell, sight, touch, hearing; and so the story might be repeated elsewhere. 

In any event, five waves are basic to a completed social movement and can be accepted without necessity of reasoning the matter out.

Three of the five waves that form any completed movement will be in the direction of the movement; two of the waves will be in a contrary direction. The first, third and fifth waves represent the forward impulse; the second and fourth waves, the contrary, or corrective. Stated otherwise, the odd numbered waves are in the main direction; the even numbered waves, against the main direction.

 It is generally accepted as a truth that law rules the universe. Even if we do not understand why or how an exactly every event happens, we can use observation to predict the re-occurrence of an event. For example, we expect that the sun will rise every day, and by observing the changes in seasons, we can predict the time when it will rise. Man is a natural object, just like the sun, and his actions are also very predictable based on certain criteria (like the seasons).

Elliott’s Wave Principle is based on this scientific knowledge and additionally on the knowledge developed by Fibonacci on his sequence. What everyone does not know is where Fibonacci got the basis for his sequence.

The base of his knowledge comes from observations made and recorded thousands of years ago in the Vedas. The Vedas are the scientific and sacred books of the Hindus.

They are scientific treatises that systematically expose knowledge about mathematics, science, government and religion.  In Vedic Mathematics the energy of everything in the universe is measured in a scale from 1-9. These energies are called Vedic Wave Cycles.

These numbers represent the particular energy associated with every natural object including stocks of companies.

The complete understanding of this energy has been reserved for thousands of years to Hindu Sages and Priests. As our world changes, there is an opening of consciousness and knowledge and the opportunity exists to share this wisdom with a larger audience worthy of receiving it.

It’s obvious  from the above that Elliott had an idea of the Vedic Wave Cycles which represents the movement of all of life in 9 waves. Elliott as you can see above counted only EIGHT waves not NINE. He seemed very sure of the first 5 waves but careful observation of his writings will show that he was unsure about the movements of the last three, that is because he was missing a 9th wave movement in his theory. This affected his final conclusions about the nature of the universe and so was never able to accurately predict the full movement of the waves.

If we are going to track the movements of the universe in the form of waves we must consider the factor of “death” or “the end” or else we will never have a beginning.

Everything happens because of life and death which are the main points of any system that exists in the universe. Consider a complete line A-B at rest with no wave movement

                A    _______________________________________ B

A can be considered the birth of any system and B can be considered the death of that system. What happens in that system is a “rhythm” decided by the energy of the starting point. If A is a company that was formed at Point A then all the expenses, the employees, the funding and the players will depend on whether point A was aligned and began with good universal energy at that point.

If Point A was started at a negative “time” then it will affect the length of its life in such a way that point B can be shorter or longer relative to A. For greater understanding let us take a baby born on point A. Depending on the “time” it took birth when the mother was abused constantly by the husband, then obviously the success of the kid would be short-lived or difficult.  However if the mother was romanced and loved greatly by the husband, then the Point A conditions would be so energized with positivity that the length of the “Time Line” between A and B will be longer and much more prosperous for the Kid.

So as you can see the 9th wave determines the death point of the whole system. This final wave is missing in “Elliott Wave Theory” and so the death wave point is not identified in the system, so at some point the theory will advance perfectly up to the 5th wave but will fail in the 6th to the 8th. This will leave two unknown values: the starting point of the new system as well as the ending point of the old system after the 8th wave.

Between Point A which is ZERO and the last point B there will be only 8 wave movements which Elliott did identify but was unable to see the birthing point A and the death point B. If these points are identified then the 8 waves are easy to identify and analyze. An energy condition will be identified accurately.

Before we proceed to examine the method of finding these points we must first understand “TIME”, as waves cannot operate without it. If there is no time then the wave movement is just a dot (or particle). As you might have observed in the above writings , we placed the word time in quotations because this is a crucial factor to determining point A and Point B.

Time is not a tangible factor that can be identified easily as it is value is not fixed nor is it determined by a ruler of any kind. It is a perceptive value. It is this very factor called time that causes scientists in quantum physics get confused by the fact that Light energy photons acts as waves sometimes or as a particle other times. It is because when time is absent, it acts like a particle and when time is present it acts like a wave. Now we must look at how time affects all of life as well as the waves in the stock market.

A death point is determined by the perception of the observer. In any experiment the observer cannot take his perceptions out of the experiment, therefore every time an observation is made the result of that experiment would include the perceptions of the observer.

This is why scientists are confused with Nuclear and Particle Physics experiments. Their conclusions involve also the observer’s perception. The perception of the observer is further affected by his or her knowledge and what measurements he used to determine his or her results of the experiment. The same way the investor will have to measure the results by his method of measurement. He will have to determine the up and down movements of his investments by inserting the factor of time based on the type of measurement he wants to perceive those up and down movements of his investments.

For example if he is a weekly investor, only the beginning of the week or the end of the week matters. What happens in the middle week is immaterial. If the wave movement is from up to down then he will lose and if it is from down to up he will gain.

The same procedure would apply when if the Point A and B represented a month or period of one year or ten years. Whether the stock goes up or down the movement will not be considered part of the “time” perception.

It must always be remembered that the complete system is made up of the Vedic Code movements of 9 waves with the point B being the end of the system measurement choosen. The ending point being determined by the beginning point in a 9-wave system called the Vedic Code Waves.


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