Sunday, January 18, 2009
I've received a number of questions about Elliott Wave Patterns, so I thought I would do a quick post showing the most basic EW patterns and how they are labeled. Hopefully this will help those who are new to EW identify with some of the jargon I use in my posts. I am happy to answer all questions.
The basics of a corrective wave is 3 moves (A-B-C). Within the context of EW, we talk about 'degrees of trend'. You'll notice that each wave can be subdivided into smaller waves. That is why I use different colors on my charts to match different degrees of trend.
I try and look at the different indices to identify failed 5th waves. If we make a new low on the Nasdaq but only got close on the S&P500, then I would count the S&P500 as a failed 5th wave.
Posted by Rich at 7:52 PM