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  • The Basics of Corrective Waves: Elliott Wave Junctures

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    Pragasit Thitaram
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    There are two types of wave patterns in market analysis: motive and corrective waves. The article discusses three types of corrective waves - zigzags, flats, and triangles - using price charts of three securities. Zigzags consist of five-three-five waves contained within parallel lines. Flats have three-three-five waves where wave B ends at the start of wave A. Triangles have converging trendlines and can form in different positions within the larger pattern.

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    There are two types of wave patterns in market analysis: motive and corrective waves. The article discusses three types of corrective waves - zigzags, flats, and triangles - using price charts of three securities. Zigzags consist of five-three-five waves contained within parallel lines. Flats have three-three-five waves where wave B ends at the start of wave A. Triangles have converging trendlines and can form in different positions within the larger pattern.

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    © All Rights Reserved
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    4 views7 pages

    The Basics of Corrective Waves: Elliott Wave Junctures

    Uploaded by

    Pragasit Thitaram
    There are two types of wave patterns in market analysis: motive and corrective waves. The article discusses three types of corrective waves - zigzags, flats, and triangles - using price charts of three securities. Zigzags consist of five-three-five waves contained within parallel lines. Flats have three-three-five waves where wave B ends at the start of wave A. Triangles have converging trendlines and can form in different positions within the larger pattern.

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    of 7

    ELLIOTT WAVE JUNCTURES BY JEFFREY KENNEDY

    The Basics of Corrective Waves

    Market: CLF, IWM and FAS Tuesday, August 6, 2013

    There are two types of wave patterns: motive and corrective. In today’s episode, we’ll review corrections — zigzags, flats and
    triangles — using price charts of Cliffs Natural Resources Inc (CLF), iShares Russell 2000 Index (IWM), and Direxion Daily
    Financial Bull 3X Shares (FAS).

    A zigzag, the most prevalent corrective wave pattern, consists of three waves labeled A, B and C. Waves A and C divide into
    five waves and wave B into three, which explains its 5-3-5 reference. A key characteristic of this structure is that it’s contained
    within parallel lines, as in CLF.

    A flat subdivides into waves A, B and C as well. However, waves A and B divide into three waves and wave C into five, which
    explains its 3-3-5 notation. Like in IWM, wave B of a flat ends at or near the origin of wave A and wave C terminates just below
    the extreme of wave A.

    Triangles come in different shapes and sizes. The most common, the contracting variety, gets its name from the converging
    trendlines that connect the extremes of waves A-C and B-D. The others are barrier and expanding triangles. Furthermore, tri-
    angles may only form by themselves in the four, B or X wave positions. Today’s price chart of FAS shows a triangle that formed
    as wave B of a larger zigzag.

    For further coverage of commodities, refer to Futures Junctures edited by Jeffrey Kennedy.

    PO Box 1618 • Gainesville, GA 30503 USA customerservice@elliottwave.com


    770-536-0309 • 800-336-1618 • FAX 770-536-2514 © 2013 Elliott Wave International
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    PO Box 1618 • Gainesville, GA 30503 USA customerservice@elliottwave.com


    770-536-0309 • 800-336-1618 • FAX 770-536-2514 © 2013 Elliott Wave International
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    PO Box 1618 • Gainesville, GA 30503 USA customerservice@elliottwave.com


    770-536-0309 • 800-336-1618 • FAX 770-536-2514 © 2013 Elliott Wave International
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    PO Box 1618 • Gainesville, GA 30503 USA customerservice@elliottwave.com


    770-536-0309 • 800-336-1618 • FAX 770-536-2514 © 2013 Elliott Wave International
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    PO Box 1618 • Gainesville, GA 30503 USA customerservice@elliottwave.com


    770-536-0309 • 800-336-1618 • FAX 770-536-2514 © 2013 Elliott Wave International
    ------------------------------------------------------------------------------------------------------------------------------------------------------

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    PO Box 1618 • Gainesville, GA 30503 USA customerservice@elliottwave.com


    770-536-0309 • 800-336-1618 • FAX 770-536-2514 © 2013 Elliott Wave International
    ------------------------------------------------------------------------------------------------------------------------------------------------------

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    PO Box 1618 • Gainesville, GA 30503 USA customerservice@elliottwave.com


    770-536-0309 • 800-336-1618 • FAX 770-536-2514 © 2013 Elliott Wave International

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