How The Market Works
Our framework of how the stock market really works could be described in two analogies.
The first one is we imagine the market as an errand boy or a driver. He is ordered by the big boss, which is EVA (Economic Value Added). The errand boy could, from time to time, ignore the boss' order. But even so, eventually, the boss gets what he wants. How the errand boy moves follows specific patterns which are cataloged in Elliott Wave Principle.
The second analogy is as follows: The market moves in waves, like a sine wave we have seen in physics lesson. We imagine the market moves as if being pulled by a strong magnet. The magnet position is somewhere in the middle of the cycle. This magnet is EVA. But because the market moves in waves, it constantly moves from one extreme point to another, and never stopped at the magnet location for long. The waves have some specific, repeatable forms which are described in Elliott Wave Principle.