The Five Waves Pattern (Motive and Corrective)

In Elliott’s model, market prices alternate between an impulsive, or motive phase,

and a corrective phase on all time scales of trend. Impulses are always subdivided
into a set of 5 lower-degree waves, alternating again between motive and corrective
character, so that waves 1, 3, and 5 are impulses, and waves 2 and 4 are smaller
retraces of waves 1 and 3.

An impulse wave, which net travels in the same direction as the larger trend,
always shows five waves in its pattern.

In the Figure above, wave 1, 3 and 5 are motive waves and they are subdivided into
5 smaller degree impulses labelled as ((i)), ((ii)), ((iii)), ((iv)), and ((v)). Wave 2 and 4
are corrective waves and they are subdivided into 3 smaller degree waves labelled
as ((a)), ((b)), and ((c)). The 5 waves move in wave 1, 2, 3, 4, and 5 make up a
larger degree motive wave (1).

In a bull market the dominant trend is upward, so the pattern is forward -five waves
up and three down.

See Appendix 1 for further details.

A corrective wave, on the other hand, net travels in the opposite direction of the
main trend. Corrective waves subdivide into 3 smaller-degree waves, denoted as
ABC. Corrective waves start with a five-wave counter-trend impulse (wave A), a
retrace (wave B), and another impulse (wave C). The 3 waves A, B, and C make up
a larger degree corrective wave (2).

In a bear market the dominant trend is downward, so the pattern is reversed—five

waves down and three up.

See Appendix 2 for further details.