In Elliott Wave analysis, it's critical to distinguish whether we are in a 3 or 5 wave pattern. Here, Fibonacci calculations of extensions and retracements, based upon Phi (The Golden Ratio), are essential. A standard Wave 1 will extend to the .382 or .618 extension of the entire move. It then pulls back in a Wave 2, generally to the .500 or .618 retracement level of the Wave 1. It is then followed by a 3rd wave that subdivides, and this is where an Elliottician makes the distinction between an impulsive 5-wave move or a 3-wave corrective move. This is something Avi lovingly calls "Fibonacci Pinball." Ultimately, the way that we know that a movement within the market is going to be a 5-wave move as opposed to a 3-wave move happens during the potential Wave 3.
Strong, trending price move consisting of 5 waves. Waves 1,3 and 5 are impulsive, or motive waves, and move in the direction of the trend. They subdivide into a 5-wave structure, which are designated by numbers. Waves 2 and 4 are corrective -- moving counter to the trend -- and subdivide into 3 waves, which are designated by letters. Some basic rules: Wave 2 never retraces beyond the start of Wave 1; Wave 3 cannot be the shortest of the three impulse waves; Wave 4 does not overlap with the price territory of Wave 1; and Waves 2 and 4 tend to alternate in form. (A sharp move in Wave 2, for example, will suggest a mild move in Wave 4.) Also, sub-waves should exhibit Fibonacci relationships.
These are counter-trend 3 wave structures (labeled A, B, and C) that only retrace a portion of its preceding motive wave. They are more variable than a motive wave, and often do not show the strength that its preceding motive wave had. Corrective waves are often very hard to label while they are playing out, especially in the early stages of them and are often not clear until they are almost over. Wave 2's typically are Zigzags or Flats (VERY rarely triangles), more likely to be a deep, fast correction Wave 4's are the most complex and often shallow flatter corrections (triangles are more likely in 4th waves and B waves).
What I love about EW is you know when things go wrong and you know when to get out of a position at minimal damage...it has helped so much in my RR work"Kenneth_Aydt" - Trading Room2019-10-03
The relief of EWT philosophy on investing has been such a gift (besides being extremely profitable) that I have to say this is the most enjoyable service offered anywhere on the internet and probably the best investment I have ever made. Thanks Avi."Talapus" - Trading Room2020-01-27
My 401K money has been protected during this, and I'm making money in little chunks in my trading accounts. And that is all thanks to Avi, HD, Garrett, Zac, and so many great members here. Sincerely, my account and my family say a huge THANK YOU to you all."Franchise" Trading Room2020-03-16
After this week's action and watching how Avi & company nailed the piss out of so many moves, you can't argue with me anymore about the efficacy of EW. . . Just amazing to have a methodology that works so well PLUS the guidance from Avi."Bcindc" Seeking Alpha2020-03-09
I consider my EWT subscription one of the best and smartest decisions of my investing career."joneil" - Trading Room2019-06-28
I will say this about this site and the crew in general: It is one of the most cohesive, cooperative and harmonious "work" groups I have ever experienced. Everyone's dedication is exemplary, above and beyond the call of duty. The leadership is outstanding. All the trading and money making aside, it is a true pleasure to be here. I haven't even talked about the quality of the analysis. That, I think speaks for itself. OUTSTANDING!"Nanook" - Trading Room2018-11-08
Avi, you are the best strategist that I follow and you have made more prescient calls than anyone on the street. I currently subscribe to your service and am very pleased. I have been a licensed financial advisor for over a decade and worked at a number of Fortune 500 companies in my career, including usbank, Morgan Stanley, Russell investment and now am a director and lincoln financial and i can tell you that none of the so called experts have virtually an ability to determine market direction. With you insight, i have made a killing and am basing my strategies around your advice. Keep up the good work and ignore the naysayers who are missing out on your sage advice!"Blue Chip Investing" Seeking Alpha2020-04-12
What's incredible is that not only are the analyst's here supremely insightful, collectively presenting multiple scenarios and interpretations, but some of the members too contribute with high quality analysis and charts. Quite special...putting it kind of mildly :-)! Keep up the good work, Avi and team."findependence" - Trading Room2019-05-23
EW + Avi and team=$$$"Kwker" - Trading Room2019-08-05
In following Avi and his team's analysis and checking it with my own charts, the last month has gone from intellectual challenge to honestly life-changing. While my contemporaries, with whom I speak with regularly, are bemoaning their account balances, mine is up - significantly! That's because of you, Avi and everyone else at EWT."Oldbarn98" - Email2020-03-26