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Is there any merit to the “Elliot market waves theory?”

The Elliot Wave theory essentially uncovers larger trends and investor sentiment by smoothing and “zooming out” from market price action.

Elliot Waves zoom out on market price action by using larger-interval moving average and smoothing out price information to reveal larger trends. He was one of the first to attempt such a theory, and his foundations may have contributed to the use of Fourier Analysis and Fibonacci Sequences in market analysis.

The idea that there are larger trends that can be used as a basis for analyzing current market movements is certainly popular in technical trading, so there is substantial merit to the Market Waves theory, especially as a foundational idea.

He also gave a lot of attention to behavioral economics, and attributed a lot of weight to investor sentiment, which is a popular area of research again today.

Is There Any Merit to Fundamental Analysis of the Markets?
What is the “Efficient Frontier”?

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