medium · Elliott Wave Theory motive
A stock completes an ending diagonal that spans from 100 to 150 over 12 weeks. In a professional 'Right-Edge' scenario, the market has just dropped from 150 to 135 in 1 week.
What does the structural 'retrace-to-origin' rule imply about the current price action?
- The market is entering a Wave 2 correction and will soon rally to new highs
- The move is likely the start of a swift return to 100
- The move is too fast and indicates the diagonal count was incorrect
- The 135 level represents a confluence zone where the reversal should terminate
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