ANSWER:

For those in the orthodox Elliott Wave (OEW) camp, the Rule of Extension is a hit-and-miss affair. If a pattern appears to be impulsive, but lacks an extended wave, most OEWer`s say “well, the rule of extension is just a guideline.” As with all aspects of NEoWave theory, there are no guidelines, just rules. The Rule of Extension, under NEoWave theory, is essential. If an advance or decline of a non-Terminal nature is suspected of being impulsive, but does not possess an extended wave, that advance or decline is a complex correction. 

What qualifies a move as an “extended wave”? Well, in an impulsive pattern, wave-1, 3 or 5 MUST be at least 161.8% of the smallest wave of the three. More typically, the extended wave will be 1.618%+ of the next largest wave among 1, 3 or 5. In a Terminal pattern, a unique impulsive formation that is composed completely of corrections, wave-1, 3 or 5 will be longer than the others, but it does not have to be 161.8%+ of the smallest wave in the group.

ANSWER:

This question was posed by Mushtaq Khair, a client in Maharashtra, India (there seems to be a great deal of interest in NEoWave in India). The existence of a Double Three Running Correction is discussed for the first time in Mastering Elliott Wave (MEW), so should be considered part of NEoWave theory. The pattern is covered in detail on pages 8-11 to 8-15. So, how large can wave-X get in such a situation? 

First, let`s go over the time limits of X-waves in any pattern. Applying the NEoWave rule of Similarity and Balance on pages 4-3 through 4-7 of MEW (and considering that wave-X is the same degree as each individual A, B or C of the preceding pattern), an X-wave should NEVER take more time than the entire A-B-C correction before it. If it does, that would indicate wave-X is of a larger degree. 

If your X-wave adheres to the above NEoWave Time Limit rule, then the next test would be to make sure wave-X is between 138.2% and 261.8% of the distance of the longest wave of the prior A-B-C. If less than 138.2%, a Triangle, NEoWave Diametric or NEoWave Symmetrical pattern is probably forming. If more than 261.8%, wave-X is probably the start of a new trend or wave formation, not part of an ongoing Double Three Running Correction.

ANSWER:

MEW was written 16 years ago, when my understanding of wave theory was still growing and evolving. On page 4-4 of MEW I mention two areas of similarity – Price and Time. I now realize a third area – Complexity – should have been included. Therefore, when you are comparing one group of waves to another, to qualify as the same degree, the group with the least number of monowaves should contain at least 1/3 that of the more complex group.