1. ELLIOTT WAVE THEORY

2. THE DOW THEORY SAYS THAT MARKET TIMING IS
THE KEY TO SUCCESSFUL INVESTING AND THAT
WHEN TO BUY WAS FAR MORE IMPORTANT THAN
WHAT TO BUY.
ELLIOTT CONCENTRATED ON MARKET SWINGS (WAVES)
RATHER THAN CHART FORMATIONS.
ELLIOTT OBSERVED THAT THESE WAVES HAD A CYCLICAL
BEHAVIOR THAT COULD BE PREDICTED.

3. 5
BASIC WAVES 3 1 4
IMPULSIVE 2
CORRECTIVE

4. CORRECTING WAVES ZIG ZAGS (simple correction)
FLATS (simple corrections)
TRIANGLES (complex corrections)

5. FLAT

6. C A B

7. THE DEGREE OF THE CORRECTIVE WAVE USUALLY
INDICATES THE STRENGTH OF THE NEXT WAVE
IF VOLUME IS HEAVY ON THE 5TH WAVE, IT IS LIKELY THAT
AN EXTENSION OF THE WAVE WILLL TAKE PLACE.
CORRECTIVE WAVES CAN NEVER END THEIR RETRACEMENT
BEYOND THE START OF THE IMPULSIVE WAVES

8. IMPULSIVE WAVES WAVE 3 IS OFTEN THE LONGEST, NEVER THE SHORTEST
USUALLY, 2 OF THE IMPULSIVE WAVES WILL HAVE
EQUAL LENGTH.

9. WAVE 1 LIGHT VOLUME AND LOW VOLATILITY
FIRST SIGN OF STRENGTH OR WEAKNESS
BEGINNING OF A NEW TREND

10. WAVE 2
USUALLY A SIMPLE CORRECTION
LIGHT VOLUME
FIRST RETRACEMENT

11. WAVE 3
MOST VIOLENT
HEAVIEST VOLUME
LONGEST WAVE
TREND FOLLOWING WAVE

12. WAVE 4 MOST COMPLEX WAVE TRIANGLE RECTANGLE FORMATION
SHOULD NEVER GO BELOW TOP WAVE 1
VOLUME USUALLY DRIES UP

13. WAVE 5 LIGHTEST VOLUME OF THE IMPULSIVE WAVES
CAN END AT THE BOTTOM OF WAVE 3 (in a downmove)
EXTENDED SELLING/BUYING CLIMAX AND HIGH VOLUME

14. FIBONACCI NUMBERS