waterfall monday, page-78

NewB: seen it and totally agree..

as for Elliot Wave theory..and this is only my opinion....

I am not a great fan of EW..I understand it but it does my head in because a wave pattern is only clear AFTER it has happened.....and you can get sucked into thinking something is going to pan out unless you consider the alternatives and that is easier said than done..well it is for me...

others may have a better handle on it than me....

From my position you may think you are in a wave 1/2 or whatever but every wave is part of a larger formation and it's relevance is based on the wave pattern of the wave formation of one degree higher....(and waves can extend forever!!!!)

It's easy to fall into the trap of seeing a wave count that suits your position....I have done that plenty of times....when you think it can be one way ....but it can easily be another...

good old support/resistance and a trendline are my favourites....

Having said that..there are some EW theory rules concerning corrections I find almost 100% reliable and here they are:

1.Only motive waves are 5's. For this reason an intial 5 wave movement against the larger trend is never the end of a correction ...only part of it.....

2. In an ABC correction...wave C never extends very far beyond 161.8 of wave A.....thus if you see a 1/2/3 wave count where the 3rd extends the 1st way beyond the 161.8 you can rest assured it's a 5 waver yet to unfold.....and if it's the initial correction then it's part of a much larger correction.....

and check out the xjo!!!