Question of the Week: 10/25/2006

Since triangles occur frequently, but are often misinterpreted, what clues exist to tell you a pattern that looks like a triangle is not a triangle?


Based on the complex and detailed guidelines of NEoWave theory, the early determination of whether a Flat, Triangle, Diametric or Symmetrical is forming is based on the relationship between waves-A and B from a price, time and complexity standpoint.

Under NEoWave theory, in all Triangles variations where wave-B is at least 61.8% of wave-A in price, wave-A should be the most violent (i.e., it should cover the most price in the least time. This does not mean it is the largest wave, just that it is the fastest from high to low (or low to high). As a result, in any A, B sequence where B is at least 61.8% of the price of wave-A, but wave-B take less time than wave-A, a FLAT is NOT forming.

In unorthodox, non-Elliott (i.e., NEoWave) Triangle variations where wave-B is around 38.2% of wave-A, wave-B will take LESS time than A. As a result, in any A, B sequence, where wave-B is around 38.2% of wave-A in price, but wave-B takes more time than wave-A, a Triangle is NOT forming. The time differential fades as wave-B approaches 61.8% of the price coverage of wave-A. As it does, wave-B may equal the time of wave-A. As wave-B exceeds 61.8% of wave-A, it should begin to take more time than wave-A.

In general, NEoWave theory tells us the more SIMILARITY there is in price, time and complexity between adjacent waves of the same pattern, the greater the odds a NEoWave Diametric or Symmetrical is forming. The more DIFFERENCE there is between price, time and complexity of adjacent waves of the same pattern, the greater the chances a Flat, Zigzag or Triangle is forming.

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