hard · Elliott Wave Theory
In a bearish 5-wave impulse (downtrend), Wave 1 drops from 200 to 165. Wave 2 rallies to 188. Wave 3 drops to 115. Wave 4 then rallies to 140.
Is this a valid bearish impulse?
- No, Wave 3 is an extension, which is only permitted in bull markets.
- No, Wave 4 has overlapped Wave 1 territory.
- Yes, all rules are satisfied: Wave 2 does not exceed the origin, Wave 3 is not the shortest, and Wave 4 does not overlap Wave 1.
- No, Wave 2 retraced more than 61.8% of Wave 1, which is prohibited in bear markets.
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