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Scope of wave C4 - is it a FAILED 4th wave?
04-06-2012, 09:57 AM
Post: #1
Scope of wave C4 - is it a FAILED 4th wave?
Hello Tom and members.

Before I start practicing wave counting, which is what this is all about, I need to clarify the ruleset I will be using. Theoryman's thread on "Inside the RTB 4th" clarified the RTB's C wave nicely, the next wave that follows is the C of the 4th wave which heads back towards wave 3. In some of the example charts this wave sometimes does not make it back to the 3rd wave terminus. In that case should this not mean that the 4th wave FAILED to correct, since it's net movement is now in the same direction as the main trend (wave 3)and according to the standard understanding waves 2 and 4 should be corrective COUNTER trend waves.

Technically it can be argued that it is making a +ve correction to a shortfall in wave 3 however the standard EW requirement was that waves 2 and 4 should be counter trend. The NEWR rule does not cover this wave and so the standard rules should expect it to always return to the price territory of wave 3.

Alternatively an exception may be required for the 4th wave of wave C and 5. My main goal is to use this NEWR to evaluate profitable trading opportunities. and I just need a clear set of rules to begin establishing a methodical counting process.

Can anyone clarify this point for me?

I hope someone is out their the forum looks a bit quiet.

Many Thanks
peter (coolnz)
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04-07-2012, 11:24 AM
Post: #2
RE: Scope of wave C4 - is it a FAILED 4th wave?
It’s my understanding that under NEWR rules while wave 4 will “correct” wave 3, there is no requirement that the end of wave 4 will be prior to the end of wave 3. And, as you’ve noted, wave 4 not finishing prior to the end of wave 3 is fairly common.
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04-07-2012, 04:30 PM
Post: #3
RE: Scope of wave C4 - is it a FAILED 4th wave?
Thank you for commenting Perry.

I would like to add that the entire premise upon which EW rests is
wave formation and the counting of all degrees within and without
the current degree and done correctly this will yield the 5 motive
and 3 corrective pattern.

I will posit that it also yields another phenomenon - double moves.
3's and 5's make 2's. These are a good thing of which to be aware.
So much so that my trading system is supported by 4 pillars, Double
Moves, Matching up to Speed Changes, Key to Waves, and Balancing
Old Trend Speed with New Trend Speed. Without the support for
double moves by the market, the rest might not be possible.

Wave 4 MUST always correct wave 3. There is no exception to this
in the NEWR. RN Elliott observed RTB waves but just had not been
able to recognize their regularity while recognizing the illusion of
what he termed 'extensions' and so he named RTB's as 'irregular'
corrections. Notice that extensions were irregular as well.

This is far too much irregularity and I am glad that these two things
are able to be reckoned as 1 single repeatable and very regular feature.

Despite the NEWR's realization that extensions were actually effects
of the consistently regular nested RTB 4th waves and the benefits this
brings to EW there is still the entire nature of a correction at work.
The market is at war with itself over wishing to continue an
established trend yet becoming less convinced as exhaustion begins
to enter the thoughts of the participants and protection of profit
appears at the weigh-in.

Remember that markets like confirmations and so any time a double
movement is present there is often some better support in the
second portion. This is primarily why wave 3 is not the shortest and
often the longest. A new trend is confirmed after the wave 2
correction has failed to evaporate the reversal which was wave 1
after wave 1 is exceeded.

Our NEWR takes place in this confirmed environment. That "Irrational
Exuberance" of the 2nd portion of a double move has its effects, even
on corrections. So it shows itself in wave C and 5.

Wave 3 gets corrected by an RTB 4th. It may be only by A and that is
not a failure, or it may get only slight treatment by C as well. Then
there is the other possibility. The RT-B portion carries things too far
and the corrective forces bring an equally excessive wave C that is
able to extend to near the origin of wave 1.

Nobody said better counting rules make markets anything less than
what they are, popular sentiment, subject to change. I am familiar
with that.

Smile

TS Hennessy
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04-10-2012, 08:54 AM
Post: #4
RE: Scope of wave C4 - is it a FAILED 4th wave?
Thank you Tom and Perry,

I'm still a bit skeptical about Wave 4 of 5 (and of C) having its end forward of its origin, obviously a pullback is required for wave 3 terminus to EXIST. but as Tom alluded what counts is the count and what results represents what IS.

Certainly it is sentiment that is carving out these waves and waves 5 and C are at the extremes of the full cycle and so it is reasonable to expect sentiment to have unique properties here compared to anywhere else in the cycle.

You guys have been counting these waves far longer than me so it would be wise for me to take it as said and see where it goes.

A lot of these rules were empirically based by Elliott where the rules were formed from the count and the count was based on the rules. (not an easy task) this means any change in one brings into question everything else, for example the rules of extension would place the wave 3 terminus forward to encompass the extension wear as with the NEWR approach Wave 3 would end and wave 4 would be responsible for the next peak/trough. This does strictly speaking require that the statements about wave 3 need to be re-evaluated with the NEW count to see if they still hold true.

This brings me to my next question and that is about WAVE 5, now to be successful wave 5 needed to exceed wave 3. Now we have the RTB making a new High/Low so how do we define a successful wave 5? ie should it travel passed wave 3 or the RTB. This is quite significant because if the original rule still holds then the price high of the 5 wave advance might be the RTB with wave 5 successfully terminating passed 3 but short of the RTB. ie the full 5 wave cycle might not end on the price high but on a subsequent lower high ( I'm talking "BULL" here of course Smile) This would be a failed 5th on the old count because of where wave 3 was placed.

nb. This conjures up the image of a head and shoulder pattern, maybe there is a connection, then again maybe not. What I do know is that COUNTING WAVES correctly gives a trading edge like nothing else out there.

Your thoughts on WAVE 5 would be appreciated also I haven't quite clicked on the
"double move" I know 5-3 = 2 but I'm certain that's NOT what you mean.

Many Thanks
Peter
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04-10-2012, 05:41 PM
Post: #5
RE: Scope of wave C4 - is it a FAILED 4th wave?
Of course it is true that whenever you open a sealed document you
render the validity of the seal useless, yet not necessarily does that
mean the contents of the document itself need all be negated.

I only ventured where necessary and gave the underlying reasons
why EW could not likely have been developed properly without
sufficient detail. The foundation is rock solid, even if we have now
made some new etchings in the tablets.

Indeed I would not argue dogmatically, just tell you what you will
find in the waves.

You are correct about wave 5 needing to exactly match OR exceed
any RT-B wave present. It cannot fail but this would be the minimum
requirement for a 5th wave truncation in a C or 5 of the next higher
degree.

The Double Moves is more easily described with a picture. I had this
on my other forum:

   

Double Moves are extremely pervasive.

Smile

TS Hennessy
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