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Elliott, Ralph N.

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Ralph N. Elliott
Provided by George A. Schade, Jr., CMT

For his significant contributions to the field of technical analysis, the Market Technicians Association awarded Ralph Nelson Elliott the 1996 Annual Award. Following is the biographical portion of that evening’s presentation made by George A. Schade, Jr. In the other part of the presentation, Bob Prechter detailed Elliott’s work.

The Elliott Wave Principle, the legacy of Ralph Nelson Elliott, is practiced globally - 62 years after Elliott's discovery, and 50 years [now 72 and 60 years, respectively] after his last work was published. Within its sophistication, as Paul Tudor Jones has pointed out, "Elliott Wave theory allows one to create incredibly favorable risk/reward opportunities."

We focus on a pioneer's work and its variations, and when awed by a theory, we wish we knew more about the person. American essayist Ralph Waldo Emerson put it best: "There is properly no history, only biography."

Ralph N. Elliott's Wall Street career is known. During the last 13 years of his life, he advanced a unique theory of stock market action. The Elliott Wave Principle was first revealed privately, in December, 1934, to Charles J. Collins, an investment counselor. In August, 1938, a monograph written with Collins' assistance - The Wave Principle - was published.

A year later, Elliott wrote the now-famous twelve articles for the magazine Financial World, where Elliott's theories were presented to a larger audience. Between November 1938 and August 1945, Elliott issued interpretive letters and educational bulletins. In June 1946, his last work - Nature's Law: The Secret of the Universe - was published.


But what was Elliott's background, and what do we know of his first 64 years?

Ralph Nelson Elliott was a child of the American Western frontier and an international man.

He was born on July 28, 1871, in the small community of Marysville, Marshall County, located by the Big Blue River, in northeastern Kansas. Elliott's family had arrived in Kansas around 1868, to what was then the edge of the bustling American frontier. They purchased farmland.

The settlers on the Oregon Trail and the Pony Express riders all had passed by Marysville. The 1996 Olympic Games torch passed through Marysville.

His father, Franklin, was born in 1835, in Ohio, when that area marked the Nation's Western frontier. His mother, Virginia Nelson, was a native of Philadelphia. Elliott's grandparents were born in the United States, except for Virginia's father, who had migrated from County Donegal, Ireland. Elliott had one sibling, sister May, who lived most of her life in the Los Angeles, California area.

Elliott's maternal great-grandfather fought as a private militiaman at Bunker Hill during the American Revolution, was wounded and was made one of General Washington's bodyguards. Elliott's paternal grandfather Hugh was a veteran of the War of 1812.

Most of Elliott's early childhood was lived on Elm Street in Fairbury, Illinois, a small and prosperous farming community about 100 miles southwest of Chicago. Elliott's father was a merchant, while his mother's family farmed, Virginia Nelson's brothers and sisters each farming 80 acres.

In early 1880, the Elliotts moved to San Antonio, Texas, where Elliott formed a lifetime love for Mexico and Latin America. He spoke Spanish, and wrote it well as some of his letters written in Guatemala in 1926 attest.

His family typified the American family that migrated West living at the frontier's dynamic economic edge. From origins in Ohio and Philadelphia, to Kansas, Illinois, Texas, and to their final destination in Los Angeles, California, in the early 1890's, the Elliotts lived by movement and progression. Elliott's father, mother and sister are buried side by side in Inglewood, California.

Growing up with a spirit of independence and exploration, foreseeably, Elliott became an international man.

In 1891, at age 20, he moved to Mexico to work on the railroads at the height of North America's railroad boom. He lived in Mexico for the next 25 years. In youth, he worked as a lineman, train dispatcher, stenographer, telegraph operator and station agent. Later, he was employed in a variety of railroad executive positions, primarily in accounting and business reorganization.

On September 3, 1903, Elliott wedded Mary Elizabeth Fitzpatrick (1869-1941), a New Yorker. Mary was with Elliott in Mexico, Nicaragua and Guatemala. They were married for 38 years.

During these same twenty-five years, Mexico held massive investments by the British in mining, the French in textiles, and the United States in railroads. The Elliotts might have remained in Mexico the rest of their lives. But by 1911, social tremors heralded the tragic and violent Mexican Revolution, during which nearly 2 million people died. In June 1916, (in his words) when President Woodrow Wilson "ordered all Americans out of Mexico," Elliott complied. He moved to Los Angeles where he cared for his elderly father who died within a year. His mother Virginia had died in 1909.

Elliott spent his last two years in Mexico (1914-1916) in Frontera, a town at the mouth of the Grijalva River, on the Gulf of Mexico, near the Yucatán Peninsula. This was a safe place to avoid the furor of the Revolution wracking Mexico.

Consider two events occurring in 1914: The U.S. Marines seized the Mexican seaport of Veracruz, making Americans very unpopular, and later that year, the Mexican Government seized the National Railways of Mexico, most probably resulting in Elliott losing his job. Frontera, with its American community (an American consul was posted in Frontera), was a safe haven.

In Frontera, Elliott may have worked for one of the American-owned mahogany plantations in the area (when mahogany furniture was very popular).

Even after his forced departure, Elliott's passion for Latin America remained unabated. Between 1917 and 1920, Elliott tried to establish an American paper company's export business in Mexico (1918); was an auditor for the Pierce Oil Corporation in Tampico, Mexico (1919); and, passed up an offer of employment from the Cuba Railroad Company (1920).

Elliott's passport applications show that he was 5'8" tall, had blue eyes, brown hair, a complexion described as "ruddy" and "fair," and wore eyeglasses. Photos taken in 1918 and 1924, show an elegant man with a sturdy frame, hardy appearance and an air of self-assurance.

 By early 1920, Elliott had moved to New York City, where he remained until late 1924. During these years, Elliott worked in corporate restructurings and established a consulting business. He traveled to Canada, England, France and Germany.

He developed a specialty as a consultant to restaurants, cafeterias and tea rooms. This specialty built on his accounting knowledge and business expertise. He authored a monthly column for the magazine Tea Room and Gift Shop. In his introduction to its readers, the magazine said of Elliott that "he is primarily a business man." His two-page column answered readers' questions and gave accounting and business guidance for operating a restaurant.

During these years, Elliott's knowledge of Latin America and his corporate experience had brought him into contact with influential people in the academic and political worlds, who noted his abilities. Elliott had met these individuals in Latin America or through his railroad positions. One of these, Dr. Jeremiah W. Jenks, a distinguished lawyer, academician and political advisor, was influential in leading Elliott to his highest political appointment.

In December 1924, President Calvin Coolidge's Secretary of State, former New York Governor and Supreme Court Associate Justice Charles Evans Hughes, appointed Elliott Chief Accountant of Nicaragua, which was then under American military governance. From February to June, 1925, he worked in Managua. As reported in The New York Times, Elliott worked "to revise the banking and financial laws of Nicaragua." The Elliotts left Managua a few months before the United States Marines departed Nicaragua.

From August, 1925, to October, 1926, in his last corporate position, Elliott served as the General Auditor of the International Railways of Central America in Guatemala. The railroad's headquarters were in Manhattan, and its stock was traded on the New York and London Stock Exchanges. Today, this is the national Guatemalan railroad. Letters written in this position show that Elliott spoke and wrote Spanish well.

In 1926, Elliott wrote a 100-page manuscript titled The Future of Latin America, which he wanted to expand into a book. The manuscript originated as an internal memo to the U.S. Department of State. Elliott presented comprehensive foreign policy proposals for creating economic stability and lasting prosperity in Latin America. He chastised the United States for being "a country of provincials" unable to visualize the many opportunities abroad. He wrote: "The citizens of the United States are under a moral obligation to is an evident duty that they do all in their power to assist the less fortunate toward the enjoyment of that prosperity and peace of mind which they themselves have come to know."

This memo shows Elliott to be an acutely knowledgeable observer of Latin American customs, economics and politics, with a strong desire "to outline a constructive foreign policy along practical lines" for U.S.-Latin American economic affairs.

Elliott wished to write a book advancing his Latin American ideas. It did not happen; it would have been his second book. In August, 1926, his Tea Room and Cafeteria Management was published. The book advises on establishing and running a tea room and cafeteria and shows Elliott's varied business expertise and acumen. Today’s Starbucks would be similar to a tea room of the 1920s. The book was very favorably reviewed in both The New York Times and the former New York Herald Tribune.

Both The Future of Latin America and Tea Room and Cafeteria Management reveal a gifted and literate writer, who counsels in the most practical and beneficial ways to succeed as a Nation and profit in business.

In late 1926, Elliott returned to New York City, suffering from a severe alimentary tract illness commonly found in tropical areas. By January, 1927, the Elliotts had left New York City and moved to downtown Los Angeles.

He continued his business consulting practice, which now included "private investments." His health, however, was deteriorating. By 1929, he was physically debilitated and was forced into unwanted retirement.


His sharp and energetic mind would not rest. His stock market studies began. He read Robert Rhea's book, Dow Theory, and was one of the first subscribers to Rhea's stock market service. Elliott's observations led not only to the discovery of the Elliott Wave Principle but, at age 64, to a career in Wall Street, to what he later referred to as "Wave number five of my own life."

The Elliott Wave Principle was first revealed privately, in December, 1934, to Charles J. Collins, an investment counselor. In August, 1938, a monograph written with Collins' assistance -The Wave Principle - was published.

A year later, Elliott wrote the now-famous 12 articles for the magazine Financial World, where Elliott's theories were presentedto a broader investment community than his 1938 monograph had reached. Between 1938 and 1945, Elliott issued interpretive letters and educational bulletins. In 1946, his last work - Nature's Law: The Secret of the Universe - was published.


In 1941, the professional lives of Elliott, Edson Gould and Garfield Drew converged or came together. The time was between October 1940 and May, 1941, a gloomy declining market period highlighted by the day Jesse Livermore put a gun to his head in the cloakroom of the Sherry Netherlands Hotel.

On October 1, 1940, Elliott had written one of his Educational Bulletins titled “The Basis of the Wave Principle” - “How The Wave Principle Works and Its Correlation With Mathematical Laws.” Elliott wrote:

“The Fibonacci Summation Series is the basis of The Wave Principle….agrees in every respect with the rhythmic count of the Wave Principle…”

Elliott also noted that there were many “coincidences” shown in the Wave Principle between the time elements of a trend and the “Fibonacci Summation Series of Dynamic Symmetry”.

A little more than six months later, on May 19, 1941, Edson Gould, whose middle name was Beers, wrote under the nom de plume Edson Beers, an article published in Barron’s titled “A New Idea for Speculators: Applying the Principles of ‘Dynamic Symmetry’ to the Stock Market.” Gould wrote:

“[T]he problem of the market is primarily mathematical. This must be so for the principles that govern physical phenomena, the laws of motion and those of biology can be expressed mathematically…”

He then recommended as “required reading for all students of the market,” the treatise The Elements of Dynamic Symmetry by Jay Hambidge. Hambidge was an American art historian who had translated the phrase “Dynamic Symmetry” from a term used by the Greek mathematician Euclid. Hambidge discovered the concept after researching Greek pottery and architecture, whose measurements showed symmetry patterned on the Fibonacci sequence.

Gould wrote in his article:

“Everyone knows that stock price movements tend to be symmetrical, recurrent and periodic, but the dynamic nature of time cycles and price ranges has not been generally appreciated. This summation series, 1, 2, 3, 5, 8, 13, etc., explains away many apparent inconsistencies and otherwise baffling situations.”

Gould made reference to the manner in which important high and low turning points showed a recurrence patterned on the Fibonacci sequence. This description of time and Fibonacci numbers was extremely similar to the same points Elliott had made in October, 1940.

One last point on Gould’s 1941 article - the day it was published, the DJIA closed at 116.15. Gould ended his article with this forecast:

“After a sizable reaction the market should then begin its real climb up to the 300 level.”

At this point, Garfield Drew and his 1941 book enter the picture. An interesting aside is I don’t believe Drew knew that Edson Beers was Edson Gould. Drew wrote in 1941:

“The same elements of dynamic symmetry which Beers believes apply to the patterns of stock price movements are likewise the basis of Elliott’s ‘Wave Principle’.”

Some thirty years later, Robert Prechter spoke with Gould about this. Prechter wrote:

“Gould confirmed in a telephone conversation with Prechter that the editor of Barron’s told him he had received a call from Elliott, who was (justifiably) angry about the article….Despite gentle probing, [Gould] declined further comment on the subject.”

Elliott apparently believed that Gould had pirated his ideas about the mathematical basis of the Wave Principle. Both Elliott and Gould attached great significance to the Fibonacci numerical sequence, but Elliott had written about it first.

In early 1941, Elliott forecasted a multi-decade advance. His forecasts were long-term bullish. Later in October, 1942, Elliott predicted the advance would exceed the 1929 top.

In the Spring of 1941, Garfield Drew wrote in his book:

“The ‘Natural Rhythm’ methods do, of course, afford a long-term picture, the question being the extent to which credence can be placed in their forecast. However, to repeat what has been said before, their indicated pattern in recent years has been far more correct than just chance seems to account for, and R. N. Elliott’s record, for example, is carefully documented with unimpeachable outside sources. For that reason, the rising trend of stock prices definitively indicated for the coming years is at least interesting.”

Drew then commented favorably on Edson Gould’s 1941 article in Barron’s and on the use of dynamic symmetry to make market forecasts. He joined Gould and Elliott together as forecasting a move in the DJIA up to 300. Drew noted:

“Corroborating the Beers forecast quoted earlier, Elliott’s long-term ‘wave analysis’ in the spring of 1941 showed the market to be in the earlier phases of an important cyclical upward movement which might well eventually reach the 300 level.”

Where did the DJIA go after 1941? In the subsequent fifteen years, the DJIA rose 12 years and declined 3. From 1942 to 1946, the market rose 129%. In 1954, the DJIA crossed 300 at last exceeding the 1929 top.

This was not lost on Garfield Drew. In 1955, Drew wrote:

“Elliott’s Wave Principle seems to have stood up better than anything else in the field of long range forecast….[t]he basic theory was quite correct that the next important move would not only be up, but would exceed the 1946 top.”

Garfield Drew recognized Elliott’s and Gould’s analytical work as early as 1941, when Elliott and Gould were relatively not popularly known as market analysts. He recognized the creative talents of these two giants, and most likely had a lot to do with the prominence which Elliott, and especially Gould, who lived longer than Elliott, enjoyed in subsequent years.

Elliott died on January 15, 1948, in King's Park, New York, after 77 years of a very productive life. The New York Times reported his obituary. Mary Elizabeth Elliott had died on December 30, 1941, in Brooklyn, New York. There is no record that the Elliotts had children. Elliott's sister May died in Los Angeles on December 18, 1953. May was Elliott's sole surviving relative.

Source: This article is based upon research done by George A. Schade, Jr., CMT. He can be reached at



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