ANSWER:

This question refers to the NEoWave concept of “touch points.” In Flats and Zigzags, there are only four (4) possible touch points along the two channels – the beginning of the pattern (point zero), wave-a, wave-b and wave-c. When any Flat or Zigzag has all of its touch points touching one of the two channels, under NEoWave it qualifies as “perfect channeling.” When a Flat or Zigzag channels perfectly, it tells us an x-wave will follow and the pattern will become part of a larger, more complex correction (like those shown in Chapter 8 of Mastering Elliott Wave). 

What the question above is asking is can an X-wave follow a Flat or Zigzag even if it does not channel perfectly…the answer is YES. But, keep in mind, an x-wave is mandatory when channeling is perfect, only possible when channeling is not perfect.

ANSWER:

A great question that I have no great answer to. The diagrams in MEW are representative of reality; most books on EW inexplicably display unrealistic examples of price action, giving the reader a false impression of real-world pattern development. This problem dates all the way back to R.N. Elliott’s original works. Clearly, it is easier to show impulse patterns as one idealized formation rather than display three separate phenomenon (with at least two variations each). But, unfortunately, taking that diagrammatical short-cut does not help the beginner make the leap from student to practiioner.

ANSWER:

In my opinion, channeling is misunderstood and is mistakenly used as a predictor of future price action. The reality is that channeling is much more effective in identifying turning points than in predicting future market action. 

As part of NEoWave theory, channeling is best used to identify the conclusion points of waves-2, 4, b and d. It is virtually useless in identifying the conclusion of waves-1, 3, 5, a, c or e. Discussed in detail on page 5-9 of Mastering Elliott Wave (MEW), the most important use for channeling is in identifying the conclusion of wave-2 of an impulsive pattern. As shown at the top of page 5-10, if what you mark as a “0-2” trendline is broken soon afterward, the “0-2” trendline must be adjusted and shifted to the right, concluding wave-2 later. If after that second point, the market does not rally at least 61.8% of wave-1, and the channel is broken again, wave-2’s conclusion must again be shifted into the future. 

Under orthodox Elliott Wave, most people call this a series of 1-2’s of decreasing degree, but logic (and future behavior) nearly always forces the person who attempts this process to change their count later, which means the assumption was wrong from the start. 

If you want your counts to be correct both in current time and into the future, you must make sure there is a clean line from the start of wave-1 to the end of wave-2 OR that wave-2 finishes after (and higher) than the last touch point created by the “0-2” trendline.