medium · Elliott Wave Theory
In a developing bull impulse, Wave 2 is identified as a sharp zigzag that retraces 61.8% of Wave 1 over a period of 10 days.
According to the Guideline of Alternation, which of the following best describes the expected character of Wave 4?
- An impulsive five-wave decline that overlaps into the price zone occupied by the peak of Wave 1.
- A simple zigzag correction retracing 50% of Wave 3's advance over about 10 days.
- A sharp double zigzag retracing 78.6% of Wave 3 over just 5 days, echoing Wave 2.
- A sideways correction such as a flat or triangle retracing 38.2% of Wave 3 over 20 days.
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