As of 04/02/2020
  Indus: 21,413 +469.93 +2.2%  
  Trans: 7,446 +93.13 +1.3%  
  Utils: 729 +21.32 +3.0%  
  Nasdaq: 7,487 +126.73 +1.7%  
  S&P 500: 2,527 +46.40 +1.9%  
YTD
-25.0%  
-31.7%  
-17.0%  
-16.6%  
-21.8%  
  Targets    Overview: 03/15/2020  
  Down arrow19,000 or 25,600 by 04/15/2020
  Down arrow6,700 or 9,000 by 04/15/2020
  Down arrow600 or 800 by 04/15/2020
  Down arrow7,000 or 8,400 by 04/15/2020
  Down arrow2,300 or 2,900 by 04/15/2020
CPI (updated daily): Arrows on 4/1/20
As of 04/02/2020
  Indus: 21,413 +469.93 +2.2%  
  Trans: 7,446 +93.13 +1.3%  
  Utils: 729 +21.32 +3.0%  
  Nasdaq: 7,487 +126.73 +1.7%  
  S&P 500: 2,527 +46.40 +1.9%  
YTD
-25.0%  
-31.7%  
-17.0%  
-16.6%  
-21.8%  
  Targets    Overview: 03/15/2020  
  Down arrow19,000 or 25,600 by 04/15/2020
  Down arrow6,700 or 9,000 by 04/15/2020
  Down arrow600 or 800 by 04/15/2020
  Down arrow7,000 or 8,400 by 04/15/2020
  Down arrow2,300 or 2,900 by 04/15/2020
CPI (updated daily): Arrows on 4/1/20

Bulkowski on Wave Three Extension Elliott Wave Pattern

 

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

 

The wave three extension in a bull market. The figure to the right shows what a wave three (third wave) extension looks like in a bull market. An extension is an unusually long impulse wave with exaggerated subwaves, according to Frost and Prechter. Many impulses contain only one extension in their actionary subwaves. That is, only one of the waves one, three, or five, will be extended. When an extension occurs, it will likely occur during wave three. The subwaves within an extension have nearly the same duration and amplitude as the ones in the rest of the wave. That means if wave three is extended, then the subwaves in wave three will resemble the subwaves in waves one and five.

Four subwaves join wave three to total five subwaves and complete the extension. I show wave three of higher degree as a red line and subwaves in black. Knowing that wave three extends suggests waves one and five will be normal length.

 

The wave three extension in a bear market. The chart on the right is the same as the prior one, but the wave occurs in a bear market. The extended wave three appears in red (shown this way to highlight the wave length), but it really is composed of the black subwaves.

An extension can occur within an extension. For example, if wave three is extended, then subwave three within wave three can be extended. Thus, wave three will have nine subwaves instead of five.

 

Wave Three Extension Rules

The wave three extension has rules that govern its shape. They are listed here.

-- Thomas Bulkowski

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See Also

 

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Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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