ANSWER:

This week`s question was posed by Paul Collaros of Gauteng, South Africa. First and foremost, if there is no price, time or complexity alternation between waves-2 and 4, what you are witnessing is a complex corrective rally or decline, not an impulsion.

Secondly, under NEoWave theory, one of the important characteristics of a true impulsive pattern is that it is difficult to channel. Some waves will touch the upper and lower trendlines and some will not. Therefore, if you can easily encase an entire advance or decline between parallel lines with each high and low touching one of the parallel lines, the pattern is corrective, not impulsive. This concept would apply even if the lines slightly expanded away from or contracted toward one another.