As of 08/11/2020
  Indus: 27,687 -104.53 -0.4%  
  Trans: 10,890 +24.59 +0.2%  
  Utils: 822 -19.04 -2.3%  
  Nasdaq: 10,783 -185.54 -1.7%  
  S&P 500: 3,334 -26.78 -0.8%  
YTD
-3.0%  
-0.1%  
-6.5%  
 +20.2%  
 +3.2%  
  Targets    Overview: 07/31/2020  
  Up arrow28,150 or 25,000 by 08/15/2020
  Up arrow11,100 or 10,050 by 09/01/2020
  Up arrow870 or 800 by 08/15/2020
  Up arrow11,300 or 10,200 by 08/15/2020
  Up arrow3,500 or 3,250 by 09/01/2020
CPI (updated daily): Arrows on 6/29/20
As of 08/11/2020
  Indus: 27,687 -104.53 -0.4%  
  Trans: 10,890 +24.59 +0.2%  
  Utils: 822 -19.04 -2.3%  
  Nasdaq: 10,783 -185.54 -1.7%  
  S&P 500: 3,334 -26.78 -0.8%  
YTD
-3.0%  
-0.1%  
-6.5%  
 +20.2%  
 +3.2%  
  Targets    Overview: 07/31/2020  
  Up arrow28,150 or 25,000 by 08/15/2020
  Up arrow11,100 or 10,050 by 09/01/2020
  Up arrow870 or 800 by 08/15/2020
  Up arrow11,300 or 10,200 by 08/15/2020
  Up arrow3,500 or 3,250 by 09/01/2020
CPI (updated daily): Arrows on 6/29/20

Bulkowski on Corrective Elliott Wave Pattern

 

This page describes the corrective phase of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements.

 

The 3 wave corrective cycle. Shown is the three wave corrective phase (as opposed to the five wave motive phase) of the Elliott wave principle. Price moves in a rise-retrace pattern that is similar to an incoming tide. The corrective phase retraces a portion of the prior up move that was powered by the motive phase.

The chart shows a corrective wave when the trend of higher degree is bullish.

A corrective phase can come in a variety of flavors. General categories are: zigzag, flat, triangle, or combination, and all of these can come in two styles: sharp or sideways corrections. A sharp correction is just like it sounds, moving quickly against the larger trend. A sideways correction is more sedate. It is a correction, but price tends to move horizontally over time whereas a sharp correction is more vertical.

 

The 3 wave cycle when the trend is upward. The trend of the corrective phase need not be downward as the accompanying chart shows. This one occurs when the trend of higher degree is bearish. Price corrects the downward move in three segments, upward moves A and C with a correction between, B.

 

 

The 8 wave cycle. Each segment of the corrective phase can be composed of smaller waves. The figure to the right shows an example. Notice how the ABC correction has many sub waves. Think of a sub wave as a line segment. Wave A is composed of the 5-3-5-3-5 sequence of sub waves (line segments). Wave B shows 5-3-5. Thus, the ABC correction can be deceptive and difficult to identify especially when additional combinations of corrective waves appear.

 

Corrective Elliott Wave Rules

The three wave corrective phase has rules that govern its shape. They are listed here.

-- Thomas Bulkowski

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See Also

 

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Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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