ELLIOTT WAVES and REAL CHART RUNE ANALYSISElliott Wave Theory Interpretation
The Elliott Wave Theory is interpreted as follows:
Five waves move in the direction of the main trend, followed by three waves in a correction (totaling a 5-3 move). This 5-3 move then becomes two subdivisions of the next higher wave move.
The underlying 5-3 pattern remains constant, though the time span of each wave may vary.
Let's have a look at the following chart made up of eight waves (five net up and three net down) labeled 1, 2, 3, 4, 5, A, B, and C.
Waves 1, 2, 3, 4 and 5 form an impulse, and waves A, B and C form a correction. The five-wave impulse, in turn, forms wave 1 at the next-largest degree, and the three-wave correction forms wave 2 at the next-largest degree.
The corrective wave normally has three distinct price movements – two in the direction of the main correction (A and C) and one against it (B). Waves 2 and 4 in the above picture are corrections. These waves typically have the following structure:
Wave Degrees
Elliott identified nine degrees of waves, which he labeled as follows, from largest to smallest:
[
*]Grand Super Cycle
Super Cycle
Cycle
Primary
Intermediate
Minor
Minute
Minuette
Sub-Minuette
