Draft:Glenn Neely

= Glenn Neely = Glenn Neely is an American financial analyst, author, and entrepreneur, recognized for his significant contributions to Elliott Wave Theory. Neely's work has influenced the discipline of technical analysis and market forecasting.

Neely's introduction to financial markets began in the early 1970s, where he initially encountered Elliott Wave Theory, a methodology developed by Ralph Nelson Elliott in the 1930s. Dissatisfied with the existing interpretations and applications of Elliott's theory, Neely embarked on a rigorous process of research and analysis to refine and enhance its principles.

Neely sought to address the limitations in traditional Elliott Wave analysis by applying modified Elliott Wave principles for predicting market trends. Overtime, the application of his nuanced understanding of Elliott Wave principles, aimed at prognosticating market trends with heightened precision, established a distinguished and meticulous approach. The resultant NEoWave Theory, an innovative framework developed by Neely, endeavors to mitigate inherent ambiguities inherent in traditional Elliott Wave analysis. In essence, NEoWave theory is an extension of the Elliott Wave Principle and offers a deeper understanding of market dynamics. Through his research efforts, Neely has made significant contributions to advancing the theoretical framework of wave analysis, facilitating a more nuanced understanding of market behavior.

The culmination of Neely's work was published in two notable books in his career: Elliott Waves in Motion and Mastering Elliott Wave. Elliott Waves in Motion, published in 1988, provided an early exploration of his evolving theories, although it is no longer in circulation. Mastering Elliott Wave, published in 1990 by Windsor Books, remains a significant reference in the field, offering insights into Neely's approach to market analysis.

A notable aspect of Glenn Neely's contributions lies in his precise definition of a wave, which was never clearly define in R.N. Elliott's original wave theory. Neely characterizes a wave as a segment of specific length, exhibiting movement in any direction except vertically. According to Neely, waves emerge from an imbalance between the cumulative volume of buy and sell orders in the market. Additionally, Neely introduces the notion of monowaves, which represent the fundamental building blocks of all wave structures. Monowaves are characterized as the most rudimentary form of wave, marking price fluctuations initiating and culminating with a shift in price trajectory. Neely categorizes the combination of three or five monowaves as polywaves, and their subsequent aggregation as multiwaves. The assemblage of three or five multiwaves is termed microwaves. Neely's departure from the classical hierarchical structure designates higher-order formations as microwaves, providing a novel framework that elucidates the intrinsic dynamics of market fluctuations.

Another notable aspect of Glenn Neely's contribution lies in his identification of a few new wave patterns and formations, collectively termed NEoWave patterns. These innovative patterns have substantially enhanced stock market forecasting techniques, providing analysts and traders with additional tools for deciphering market dynamics and anticipating price movements.

NEoWave Theory
NEoWave theory is a technical analysis methodology used in the financial market to project price movement of stocks, currencies and commodities. Glenn Neely discovered NEoWave theory based on the foundation of Elliott Wave Principle. Though based on the latter theory, there is a clear difference between NEoWave theory and Elliott Wave Principle. Quite simply, NEoWave theory is an expansion of Elliott Wave Principles by applying a more scientific and technical approach to wave analysis. In order to understand the notable significance of Neely's discoveries, an understanding of the original Elliott Wave Principle is required.

Ralph Nelson Elliott's wave theory explained how one can measure the behavior of groups of people by observing the behavior in the financial markets, where investor psychology and price movements are closely associated. By simply observing the price movements, one can observe the up and down patterns reflecting the changes of mass psychology in two distinct types of waves :


 * Corrective
 * Impulsive

The patterns are subjective and are part of a larger pattern that form over time. To follow the price movement, an individual needs to apply three distinct Elliott Wave rules and guidelines:


 * Wave 2 must never retract completely from Wave 1.
 * Wave 2 cannot ever be shorter than directional Waves 1, 3 and 5.
 * Wave 4 must never enter the territory of Wave 1.

Elliott Wave theory simplifies market movements into these five-wave patterns. The theory does have its limitation, due to the complexity of the stock market and due to the subjective observation, resulting with the possibility for the movement to be counted in different ways and resulting with various contradicting scenarios.

To correct the contradicting scenarios, Neely created a more scientific approach to wave theory by adding a number of additional rules which he called NEoWave theory. These additional different rules help better define simple impulse patterns of the stock market waves. Here are some key rules :


 * Wave 2 can never retrace more than 61.8% of Wave 1.
 * Wave 4 must never enter the territory of Wave 2.
 * One of the directional waves must always subdivide.
 * Wave 3 can never be the shortest of directional Waves 1,3 and 5.
 * There must always be one extended wave that will be 1.618% of the non-extended wave. In case there is no extension in certain scenarios, the pattern will be considered corrective.
 * Out of all 6 points, more than 4 points must never lie on the channel.
 * Corrective waves always need to consume more time than any of the preceding impulsive waves.

NEoWave theory defines more subtle sub-wave structures within each wave results, providing a more detailed and extensive wave analysis. The additional rules also allow for a more subjective analysis, allowing wave counts to be adjusted based on market conditions.

NEoWave Patterns
Since creating NEoWave theory, Glenn Neely has also discovered a few new wave formations. These NEoWave patterns were never covered in the original work of Ralph Nelson Elliott and Elliott Wave Principle, or works by other wave analysts. Here are the new set of patterns discovered:


 * Neutral Triangle (5 segment patterns)
 * Diametric Formation (7 segment patterns)
 * Symmetrical Formation (9 segment patterns)
 * 3rd-Extension Terminal
 * 5th Failure Terminal
 * Reverse Alternation

Criticism
Glenn Neely has received criticism of his book Mastering Elliott Wave and NEoWave theory as being too confusing or too complex. Neely's additional rules and patterns in NEoWave theory do require a more in-depth comprehension of technical wave analysis which may be more difficult for beginners.

Glenn Neely has been quoted to say Elliott Wave Principle may not be as applicable for today's market: "Elliott wave was an incredible discovery for its time. But, as technologies, governments, economies, and social systems have changed, the behavior of people has also. These changes have affected the wave patterns R.N. Elliott discovered. Consequently, strict application of orthodox Elliott wave concepts to current day markets skews forecasting accuracy. Markets have evolved, but Elliott has not."

Biography
Glenn Neely's career in the study of markets and economics commenced in 1979. His pivotal encounter with Ralph Nelson Elliott and the Elliott Wave Principle occurred in 1980 upon reading The Commodity Futures Game. Subsequently, delving into extensive research on wave theory, Neely embarked on a quest to discern the proper application of theoretical principles. Over the course of a decade, Neely unearthed additional price patterns previously unexplored by R. N. Elliott. These findings, encompassing the classification of hitherto unexplained market behaviors and the expansion upon the original Elliott Wave Principle, culminated in the development of Neely's method, later termed NEoWave Theory. Neely formalized his findings in the seminal publication Mastering Elliott Wave in 1990.

In 1983, Glenn Neely established the Elliott Wave Institute, later renamed the NEoWave Institute, with the aim of promoting education on the Elliott Wave Principle and NEoWave theory. The institute's mission was to provide comprehensive resources and instruction to individuals interested in these analytical methodologies.

In 2004, Neely incorporated NEoWave, Inc., formalizing his commitment to market analysis and forecasting. Within the framework of NEoWave's operations, Neely initiated the publication of two monthly newsletters, NEoWave Forecasting and NEoWave Trading, offering insights and analyses to subscribers.

Since the 1990s, Neely has conducted seminars on the Elliott Wave Principle and Gann techniques, providing participants with in-depth instruction on these analytical frameworks.

Since 2000, Neely has expanded his educational efforts to include teaching forecasting methodologies using the Elliott Wave Principle and NEoWave theory. Additionally, he has provided instruction on trading strategies using the Neely River Trading software developed for TradeStation. These educational initiatives reflect Neely's commitment to sharing knowledge and tools for navigating financial markets effectively.

Throughout his career, Glenn Neely has garnered attention from various financial and business publications, showcasing his expertise and contributions to the field. In 1992, he was the subject of a series of articles  by the Los Angeles Times, highlighting his pioneering work. In May 2009, Timer Digest recognized Glenn Neely as the #1 S&P timer for the past 12 months. Additionally, Neely's research on the Fibonacci sequence was featured in Financial Sense in 2011, and he was quoted in Planet Yelnick in 2010.

Neely's insights have also been sought after in the business broadcast media. He made appearances on CNN in 1987 and on the Financial News Network, now CNBC, from 1985 through 2000, providing commentary and analysis on market trends and developments.

As a recognized authority in his field, Neely has been invited to share his expertise at prestigious events. Notably, he served as a guest speaker at the International Headquarters for the Foundation for the Study of Cycles in 1988, addressed the Market Technicians Association in 1991, and his role as the opening keynote speaker on Elliott Wave at the Salon de l'Analyse Technique et Salon du Trading held in Paris in 2004.

Furthermore, Neely has contributed to various esteemed publications. He authored articles for Cycles magazine in 1988, the Los Angeles Times in 1992, Barron's and Forbes in early 2000, Financial Sense in 2010, and The Market Cycle from 2010 through 2012, further solidifying his reputation as an expert in financial analysis and forecasting.