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Strategies & Market Trends : Classic TA Workplace

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To: Henry J Costanzo who wrote (201300)	1/6/2013 11:59:01 AM
From: h_	Read Replies (2) of 209892

This site: tradingfives.com says that in a loose interpretation (not strictly R.N. Elliott prescribed,) an intraday bar of iv can penetrate i, but not a closing price. However, in your chart, even the closing prices overlap, and the overlap occurs in wave 3 which is strictly prohibited regardless. ELLIOTT WAVE RULES Movements in the direction of the main trend of the market occur in 5 waves (impulse waves) while corrective waves are always three wave affairs. W.2 can never retrace more than 100% of W.1. If that happens, the impulse interpretation was incorrect. W.3 is never the shortest wave in terms of price. It does not have to be the longest, but in such a case either W.1 or W.5 must be shorter. W.4 cannot overlap W.1. In recent years there has been a trend to accept an overlap on a range (bar) chart but not a closing (line) chart. The author knows of no such distinction by Mr. Elliott. Practitioners of the "modern" rules permit diagonal patterns with overlaps in W.1 and W.5 but not in W.3. The occurrences are primarily related to the various commodities and to individual stocks which are more volatile and swing independent than historical indexes such as the Dow with years of trend.

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