CORRECTIVE WAVES

Markets move against the trend of one greater degree only with a seeming struggle. Resistance from the larger trend appears to prevent a correction from developing a full motive structure. The struggle between the two oppositely trending degrees generally makes …

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Truncation

Elliott used the word “failure” to describe a situation in which the fifth wave does not move beyond the end of the third. We prefer the less connotative term, “truncation,” or “truncated fifth.” A truncation can usually be verified by …

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Extension

                                       Most impulses contain what Elliott called an extension. Extensions are elongated impulses with exaggerated subdivisions. The vast majority of impulse waves …

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MOTIVE WAVES

the same direction as the trend of one larger degree. They are straightforward and relatively easy to recognize and interpret. Within motive waves, wave 2 always retraces less than 100% of wave 1, and wave 4 always retraces less than …

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Wave Degree

All waves may be categorized by relative size, or degree. Elliott discerned nine degrees of waves, from the smallest wiggle on an hourly chart to the largest wave he could assume existed from the data then available. He chose the …

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The ABCD Pattern

What Is an ABCD Pattern? Reflects the common, rhythmic style in which the market moves. A visual, geometric price/time pattern comprised of 3 consecutive price swings, or trends—it looks like a lightning bolt on price chart. A leading indicator that …

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