medium · Elliott Wave Theory
An analyst observes a rally starting at P₀ = 52.00 reaching P₁ = 61.00, correcting to P₂ = 55.50, and then surging to P₃ = 74.00.
If a subsequent pullback P₄ reaches 60.50, why is this structure no longer a valid standard impulse wave?
- The second wave retraced more than 61.8% of the first wave.
- The third wave is shorter than the first wave in total price distance.
- The slope of the second wave is steeper than the slope of the fourth wave.
- The fourth wave has entered the price territory of the first wave.
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