RAC - Charts & Price Action, page-21995

In Elliott Wave Theory, a running flat with truncation in wave C is a particular corrective pattern that provides insights into the potential next move. Here’s how it typically plays out:

Running Flat Characteristics:

1. Wave A: This is a corrective wave and can be a zigzag, flat, or another corrective structure.
2. Wave B: Wave B typically retraces beyond the origin of Wave A, often exceeding the starting point.
3. Wave C: In a running flat, Wave C does not reach the end of Wave A and instead forms a higher low compared to Wave A, indicating that the market has underlying strength.

Truncation in Wave C:

• Truncated Wave C: When Wave C fails to reach the expected target (often the end of Wave A), it shows that the market is especially strong, and the trend direction is likely to continue strongly after the correction.

Next Leg Up:

Given that Wave C is truncated and forms a higher low:

• Wave 1 of the next impulsive sequence should follow. This wave is typically strong because the truncation implies underlying bullish (or bearish, depending on the trend) momentum.
• Targets for Wave 1: The next move is expected to be robust, and technical analysts often target a move that at least equals the length of Wave C, but often it will aim to surpass the top of Wave B.

Technical Analysis Confirmation:

1. Fibonacci Extensions: Use Fibonacci extensions to predict the length of the next impulse. A common target is the 1.618 extension of Wave C.
2. Momentum Indicators: RSI, MACD, and Stochastic Oscillator can confirm the start of a new bullish trend if they show upward momentum.
3. Volume: Look for increasing volume, which often accompanies the start of a new wave.

Conclusion:

The next leg up after a running flat with a truncated Wave C is typically a strong Wave 1 of the next impulse. You should watch for a breakout above the high of Wave B, confirmed by technical indicators and volume. This suggests that the underlying trend is ready to resume with increased momentum.

what ChatGPT things, not advice could be a hallucination.