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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 Running Flat Elliott Wave

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Busted
Patterns
Candles Chart
Patterns
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Patterns
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Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 03/23/2017
20,657 -4.72 0.0%
8,936 -51.04 -0.6%
703 -1.87 -0.3%
5,818 -3.95 -0.1%
2,346 -2.49 -0.1%
YTD
4.5%
-1.2%
6.5%
8.1%
4.8%
Tom's Targets    Overview: 03/14/2017
21,250 or 20,600 by 04/15/2017
9,500 or 8,700 by 04/15/2017
675 or 715 by 04/01/2017
5,950 or 5,650 by 04/15/2017
2,425 or 2,325 by 04/15/2017
Mutt Losers: None YTD
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 running flat corrective wave of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements.

 

The running flat wave correction, bull market and bear market variety. Flats come in three types, regular, expanded, and running. This page concerns itself with the running, 3-3-5 flat wave. The chart to the right shows a running flat in a bull market (left figure) and bear market (right figure), a variety of the ABC corrective wave that follows a motive wave.

In a running flat, wave B stops beyond the start of wave A, and wave C falls short of stopping near the end of wave A. The difference between an expanded flat and a running flat is where wave C ends. In an expanded flat, wave C terminates beyond the end of wave A. The appearance of a running flat is considered rare.

The running flat wave correction in a bull market. The chart to the right has the same general shape as the preceding chart (bull market) but with more detail. It shows the subwaves within the running flat correction. The red numbers 1-5 describe the line segments or subwaves within the ABC correction. Wave A is composed of three subwaves as is wave B, but wave C has five subwaves. That's where the flat 3-3-5 term comes from. A flat is a term used for any ABC correction that has 3-3-5 subwaves. A running flat (or any flat for that matter) must have the 3-3-5 configuration.

 

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The running flat wave correction in a bear market. This chart shows the same running flat 3-3-5 corrective wave but in a bear market. Waves A and B are threes and wave C is a five. Wave B ends beyond where wave A starts but wave C terminates before the end of wave A.

Since a running flat is so rare, check for the 3-3-5 subwave configuration. If a different combination appears, such as 3-3-3, then you may be looking at the start of a triangle. If wave B shows five subwaves instead of three, then it may be the motive phase of a wave of one higher degree.

Running Flat Elliott Wave Rules

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

  • Corrective waves can trend up or down.
  • The corrective phase aligns against the trend of one higher degree (a counter trend move).
  • Wave B terminates beyond the start of wave A.
  • Wave C terminates before the end of wave A.
  • A running flat is rare so look for the 3-3-5 subwave combination.

-- 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. I'm a vegetarian -- I eat anything that eats greens.