Читать книгу Supertiming: The Unique Elliott Wave System - Robert C. Beckman - Страница 22

Now we can begin to establish a few characteristic rules which will help when using the Wave Principle as a forecasting tool. But first observe that the impulse waves are parallel to each other, and the corrective waves are parallel to each other also. These characteristics will later prove to be very valuable when applying the Wave Principle in the context of “channelling”, the subject of a subsequent chapter.

Probably more important at this stage are the bottom levels of Wave 2 and Wave 4. It should be observed that in most stock market cycles Wave 2 will not retrace all of the ground gained by Wave 1 but only a proportion of it. When dealing with the subject of cycle amplitude we will be able to establish approximately what proportion.

Likewise Wave 4 will not retrace the total ground covered by Waves 1, 2 and 3, nor is it likely to retrace the ground covered by 3. In fact, we will find the depth of Wave 4 is usually related to the depth of Wave 2.

We can now establish the general rule: during an upward progression of five normal waves, Wave 2 of the formation will have an amplitude less than Wave 1 and Wave 2 will have an amplitude less than Wave 3, such is the nature of the corrective process. Furthermore, Wave 4 will usually terminate above the bottom of Wave 2.

For the sake of clarification, referring to the diagram, on the assumption that Wave 1 is say, 10 points in amplitude, when the downwave comes we act on the assumption that such a downwave will be less than 10 points. Likewise, if Wave 3 is 15 points we act on the assumption that Wave 4 will be less than 15 points. Generally, our Wave 4 will be closer to whatever the amplitude of Wave 2 happens to be. With these few simple concepts we are able to establish probable and maximum extents of the “corrective waves”. It doesn’t really take a genius to understand, does it? Let’s continue by studying Figure 5.

Figure 5

The five-wave pattern which has been illustrated in Figure 4 represents one complete upward phase of a cycle. To complete the cycle, what is expected to follow would be a correction of the entire move which began at the inception of Wave 1. A further rule we can establish is that when five waves are completed, the next corrective wave will be larger than any of the previous corrective waves, since the correction following a “Wave 5” acts to correct a cycle of greater magnitude. In Figure 4, Wave 2 corrects Wave 1 and Wave 4 corrects Wave 3. The correction that follows Wave 5 acts in correction of the sum total of Waves 1, 3 and 5 rather than just Wave 5.

In Figure 5 the corrective wave of the entire up move has been added, labelled ABC. As previously mentioned, the cyclical bear wave consists of three movements, two downward thrusts and one upward thrust. The upward thrust (Wave B) acts in correction of the first downward thrust (Wave A). The second downward thrust (Wave C) acts to complete the entire previously established five wave upward cycle. As the termination of Wave C, we then begin all over again with a new upward cycle, starting with Wave 1 and progressing through four subsequent waves of the next higher cycle. Before we introduce any further ground rules, I will demonstrate how to apply the principles outlined thus far.