Today i'm gonna describe the Elliot Triangle. From Elliott Wave Theory, we know that Triangles are corrective structures, and usually happen just prior to the final wave of a sequence. Typically they are found at: wave 4 of an impulse or wave B (or X) of a correction. So this implies that they do warn of an impending REVERSAL of direction at one degree above.
Here's what they look like in idealized form: (Image courtesy of elliotwave.com)
Here's what they look like in idealized form: (Image courtesy of elliotwave.com)
Features
1. It's a continuation pattern in the short-term, meaning the subsequent wave(the thrust) takes the same direction as the wave before the triangle.
2. After the thrust, there is usually an equally quick reversal.
3. Each small wave A-B-C-D-E subdivides into three smaller waves.
4. The target of the triangle(starting from end of E) is typically equal to the height of the widest part of the triangle.
5. Wave E is sometimes known to do a head-fake before reversing.
Thursday's Triangle
Here's another look at Thurday's triangle - a real life example identified in real-time.
Notice the whole B wave was a triangle, and C was an upthrust whose target was only slightly short of the ideal height. And we all know what happened on Friday - quick reversal!
So what's ahead?
As mentioned above, Triangles typically indicate an impending reversal in the trend. So we should be heading down in some kind of wave iii down, right? Highly likely.
So why is the 'C?' label up there? Something else also happened on Thursday - we broke through the downtrendline from January. And on Friday, we managed to stay above it end of the day. This might have some implications. I will be posting an update tomorrow with the different scenarios and trendlines.
Stay tuned!
Posts
2 comments:
Sorry, I don't see this pattern qualifying as a triangle. I see it as perhaps a double zig zag. But, this is an academic difference since both interpretations point to lower lows in the short-term.
Thanks for your comments Anonymous. You may be right about the lower lows ahead. I see a possible complex correction too - might be a double three or even a triple three. But gotta take it one step at a time as it unfolds. And a triangle in the W part of the complex correction is absolutely possible!
Post a Comment