Question Of The Week - 10/18/2006

This question was sent in by Nitin Bagde (location, unknown). Under orthodox Elliott Wave, there are few, if any, limits on the complexity allowed between waves. Under NEoWave theory, there are not only specific complexity limits between patterns, but specific price and time limits, also.

Addressing Nitin's question first, the complexity of wave-X should be no less than that of the least complex wave of the previous, same degree, correction. It should also be no more complex than the entire, previous correction (i.e., the entire, previous Flat, Zigzag, Triangle or Diametric before it).

From a time perspective, wave-X must take at least as much time as the least, time-consuming leg of the prvious correction and at least as much price as the smallest price-leg of the previous correction.

The above rules refer to the absolute minimum requirements for an X-wave. Most often you can expect wave-X to take no less than 1/3 the price, time and complexity of the previous correction and no more than 100% of the time and complexity of the previous correction. Finally, after a Flat, wave-X can be as much as 161.8% of the PRICE coverage of the previous, same degree Flat.