Elliottician and TA Thread

Hi chestnuts >>>

I always believed the rule of Alternation applied to waves 2 and 4 on the basis of whether it was a Flat or a Zigzag, and not to do with the actual price movement. Here is an extract from one of my training guides about the actual movement of waves 2 and 4:

Targets for wave 2:

Wave 2 retraces at least 38.2% but mostly 61.8% or more of wave 1.
A retracement of more than 76% is highly suspicious, although it doesn’t break any rules yet.

Targets for wave 4:

Wave 4 retraces at least 23% of wave 3 but more often reaches a 38.2% retracement.
In very strong markets wave 4 should only retrace 14% of wave 3.

According to my charting the 61.8% retracement level is 80p and it appears to have touched this 4 times in the last 5 days so I would say a definite wave 2.

If you were a brave risk-taking trader you could be inclined to say something like "That's it, its hit the 61.8% retracement line, lets jump in". However, you would have said that 5 days ago! Still where it was. No buy signal.

Could fall to 74p, however, can't see it going below that - we would be in the 'greater than' 76% scenario. 42p is very near the start of wave 1 - unlikely.