ANSWER:

If wave-C is part of a Flat or Zigzag, wave-C should be at least 161.8% of the price of wave-b of the running correction (i.e., wave-b of wave-B), but will almost always be 161.8% of the price of wave-A. Pattern implications do not necessarily carry through from one wave to the next in Triangles, so if wave-C is part of a Triangle (any version), the “power” implied by the running B-wave correction may not be represented by wave-C. In that case, wave-C should still be at least 161.8% of the price of wave-b of wave-B. NEoWave TIMING concepts will apply to the time consumed by wave-C, which is based on how much time wave-B took in relation to wave-A (see earlier “Questions of the Week” for details).

ANSWER:

This question strikes at the core of what differentiates NEoWave from Elliott Wave. Under othodox Elliott Wave, STRUCTURE is paramount (i.e., if an advance follows the rules of an impulsion, it is, independent of future price action). Under NEoWave theory, LOGIC is paramount (i.e., no matter what you think of structure, if post-pattern behavior is inconsistent with your labeling, your wave count is wrong). Put another way, under Elliott Wave the analyst decides what a market has done and is doing (don`t confuse me with the facts, I`ve made up my mind). Under NEoWave theory, no matter what you believe about past price action, future price behavior must confirm your assumptions, making post-pattern behavior the final arbiter of analytical accuracy. For example, if you see what you think is a perfectly designed impulsion making up wave-1 of a larger advance, but “wave-2” retraces 99% of wave-1, then the market is telling you your analysis is incorrect and you must change your labeling. Through this rigid post-pattern, verification process, NEoWave removes the subjectivity notoriously associated with Elliott Wave.

This week`s question arose when Milind Karandikar of Maharashtra, India discovered I had changed the structure of the 1995-2000 rally from corrective to impulsive with the release of last year`s, newly revised long-term stock market forecast. Origainlly, weekly and monthly charts suggested the 1995-2000 rally was corrective, but less detailed, yearly charts allowed room for interpretation. Ultimately, post-pattern price behavior (from 2000`s high to present) forced me to change my interpretation, labeling the advance as impulsive (i.e., wave-3 of a 5th extension impulsion).

ANSWER:

The answer to both is “it depends on the type of impulsion forming.” In a Standard impulsion, where waves 2 and 4 do NOT overlap (i.e., they do not share any of the same price terriroty), wave-2 CANNOT take less time than wave-1 and wave-4 CANNOT take less time than wave-3. Keep in mind, the measuring of time consumed by waves-2 & 4 is from beginning to end, not from high to low. Part of wave-2 or wave-4 may exceed the high of the previous wave and may actually conclude above the top of the previous wave IF a Running correction is present.

On the other hand, in a Terminal impulsion, wave-2 IS allowed to take less time than wave-1 and usually does, plus wave-4 IS allowed to take less time than wave-3 and usually does. A NEoWave condition I call “extreme alternation” is also possible in Terminal patterns, which allows the time and price consumed by wave-2 to be much greater or far less than that consumed by wave-4 (a condition NOT allowed in Standard impulsions).