Corrective Waves

The down up market action our indicators warned us could occur in Figure 10.6 is what has developed in the DJIA and S&P 500 futures market. But to discuss these down up patterns in terms more useful than letter shapes and direction, we need to build our Elliott wave vocabulary to include the corrective patterns that serve to bind five-wave cycles together.

While most people will develop an ability to see a five-wave structure within price data fairly rapidly, some people may find it difficult to see the patterns that correct a completed five-wave cycle. It is clear what a textbook line drawing representation of these patterns should look like, but it is not as clear what the patterns should look like in a real market environment. In addition, more than one individual building block is generally required to complete a market correction, and there is some confusion about the connector between these individual patterns, the dreaded X wave. I can understand why the confusion exists because I too had to struggle with corrections until Dave Allman taught me how to feel the pattern for an individual structure. Feel a pattern? Yes. Allman walks you through hundreds of sequential charts to help you gain a feel of a particular pattern in his Advanced Workshops. Although I cannot do that here, I can provide some analogies that may help you.