medium · Elliott Wave Theory motive
An analyst is choosing between Count A (the high is Wave 3) and Count B (the high is Wave 5). The current price new high is accompanied by volume that is 35% lower than the volume at the previous major high.
Which count is favored?
- Lower volume simply makes this impulse look cleaner on the chart itself.
- Volume readings carry no real diagnostic weight at all in equity index wave counting.
- Count B is favored because volume should peak during Wave 3 and decline during Wave 5.
- Count A is favored since volume spikes are typical of major breakout points in any trending market.
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