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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Basic Motive Wave Pattern

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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 04/28/2017
20,941 -40.82 -0.2%
9,098 -96.36 -1.0%
704 -3.23 -0.5%
6,048 -1.33 0.0%
2,384 -4.57 -0.2%
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6.0%
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6.8%
12.3%
6.5%
Tom's Targets    Overview: 04/17/2017
20,100 or 21,150 by 05/01/2017
8,500 or 9,500 by 05/01/2017
725 or 685 by 05/01/2017
6,150 or 5,900 by 05/15/2017
2,275 or 2,425 by 05/01/2017
Mutt Winners: None YTD

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

This page describes the basic motive pattern of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements.

 

The 5 wave motive cycle. Shown is the basic five wave motive phase (as opposed to the three wave corrective phase) of the Elliott wave principle. Price moves in a rise-retrace pattern that is similar to an incoming tide. Notice in the chart to the right that the impulse waves, 1, 3, and 5 travel farther than the corrective waves 2 and 4. This behavior leads to a rising price trend in this example.

 

 

 

The 8 wave cycle. Reference the figure to the left Three of the waves, 1, 3, and 5, move in the direction of the trend of one higher degree (the blue numbers 1 through 5). This is similar to an ocean's tide. If you are looking at a ripple, one higher degree would be the wave. One higher degree from a wave would be the tide.

Counter trend moves 2 and 4 interrupt the movement of the main thrust.

 

 

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The 5 wave cycle when the trend is downward. The orientation of the basic 5 wave cycle need not be one of a rising price trend. The chart to the right shows a 5 wave pattern in a falling price trend. As described above, the 5 wave cycle obeys the direction of the trend of one higher degree. In the middle chart of the three on this page, each segment of the A wave is composed of 5 smaller segments, not 3 as in an ABC correction.

 

 

Basic Motive Wave Pattern Rules

The five wave motive phase has rules that govern its shape. They are listed here.

  • The motive phase is composed of five waves, three advancing (1, 3, 5) and two counter trend waves, 2 and 4.
  • Motive waves can head up or down.
  • The motive phase aligns with the trend of one higher degree.
  • Wave 2 never moves beyond the start of wave 1.
  • Wave 3 is never the shortest wave.
  • Wave 4 never overlaps the end of wave 1.
  • Waves 2 and 4 tend to alternate in form. If wave 2 is a zigzag, wave 4 will be a flat, for example.
  • One of the waves, 1, 3, or 5, will often (but not always) be much longer (extended) than the other two.

-- Thomas Bulkowski

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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Excess is never too much in moderation.