Elliott Wave Flashcards

1
Q

5 and 3 wave names

A
  1. Impulse, motive or actionary
  2. Corrective, reactionary
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2
Q

When 3 is longest…

A

5 will approximate 1

- When 3 is 161.8 or more of wave 1 good guideline

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3
Q

Alternation

A
  1. If wave 2 is sideways, 4 will be sharp
  2. If wave 2 is sharp, 4 will be sideways
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4
Q

Corrections

A

Usually end in the area of wave 4 of a lesser degree

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5
Q

Wave 1

A
  1. Half are basing patterns
  2. Heavily corrected by Wave 2
  3. Lots of short-selling
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6
Q

Wave 2

A
  1. Erodes much of Wave 1
  2. The Bear is Back (Market Psychology)
  3. Low volume
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7
Q

Wave 3

A
  1. Favorable fundamentals
  2. Holds the key to personality of the move
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8
Q

Wave 4

A
  1. Inverse to wave 2 (sharp vs. flat
  2. More often sideways
  3. lagging stocks top
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9
Q

Wave 5

A
  1. Loses momentum and breadth
  2. Psychology is extremely bullish despite bad fundamentals
  3. Should look like wave 1 if 3 was big.
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10
Q

Wave A

A
  1. Technical breakdowns
  2. If A is 3 waves = Flat Triangle
  3. If A is 5 waves - Zig Zag
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11
Q

Wave B

A
  1. Shallow retracements lead to deep wave C’s
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12
Q

Wave C

A
  1. Correlary to wave 3
  2. Fundamentals collapse
  3. Phsychology is very bearish and scared.
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13
Q

Corrective Forms

A
  1. ZigZag: Sharp, A is 5 waves, 5-3-5, could be a double if C doesn’t reach objective,
  2. Flat: Sideways. A is 3 waves, 3-3-5, Regular-Expanded-Running
  3. Triangle: Sideways, A is 3 waves, 3-3-3-3-3
  4. Combination:
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14
Q

Types of Flats

A
  1. Regular: A, B, C are fairly even (flag, or range trading)
  2. Expanded: B moves beyond A’s origin, C moves beyond B’s origin (like a broadening pattern),
  3. Running: Like expanded but wave C fails to reach A’s start
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15
Q

Triangles Characteristics

A
  1. 3-3-3-3
  2. Each leg retraces 62% of the prior leg
  3. Common as wave 4 and B
  4. E wave often falls short.
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16
Q

Volume importance

A
  1. Correctives end on low volume
  2. Wave 5 ends on low volume