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Question Of The Week - Archive |
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| June 5, 2006 |
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| Question: |
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Can a Terminal impulse end with a 5th wave failure?
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| Answer:
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Posed by Jacek Filutowski (location withheld), this question addresses a NEoWave pattern discovery I made more than 10 years ago. The pattern is called a 3rd Extension Terminal, which can easily (and usually does) end with a 5th wave failure.
In Trending impulsions, the only time wave-5 can fail is when wave-3 is the extended wave and wave-4 retraces 61.8% (or more) of wave-3 and wave-4 is larger than wave-2 in price. What makes Terminal impulsions different is each segment is corrective in design, plus waves-2 & 4 can retrace much more of the prior wave than is allowed in Trending impulsions. But, the same rules apply as it relates to the above question. To see wave-5 of a Terminal fail, wave-3 must be the longest leg, wave-4 must retrace at least 61.8% of wave-3 and wave-4 must be larger than wave-2.
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