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Bulkowski's Truncation Wave

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As of 06/14/2019
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  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow2,950 or 2,800 by 07/01/2019
As of 06/14/2019
  Industrials: 26,090 -17.16 -0.1%  
  Transports: 10,305 -42.06 -0.4%  
  Utilities: 816 +7.97 +1.0%  
  Nasdaq: 7,797 -40.47 -0.5%  
  S&P 500: 2,887 -4.66 -0.2%  
YTD
 +11.8%  
 +12.4%  
 +14.4%  
 +17.5%  
 +15.2%  
  Tom's Targets    Overview: 06/13/2019  
  Up arrow26,800 or 25,400 by 07/01/2019
  Up arrow10,700 or 9,900 by 07/01/2019
  Up arrow830 or 780 by 07/01/2019
  Up arrow8,150 or 7,575 by 07/01/2019
  Up arrow2,950 or 2,800 by 07/01/2019

Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.

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

The truncation wave in a bull market. The figure to the right shows what a truncation wave looks like in a bull market. Truncation occurs when wave five fails to move beyond the end of wave three. For this reason, truncation is sometimes called a truncated fifth (or even a 2B). The red line illustrates how wave five fails to meet or exceed the end of wave three.

 

 

The subwave configuration for a truncation. The figure to the right show the subwave configuration of an ideal truncation in a bull market. Waves one, three, and five, are composed of five sub waves. Waves two and four have three subwaves each. Thus the configuration of the subwaves is 5-3-5-3-5.

 

 

 

The truncation in a bear market. This chart is the same as the prior one but the wave occurs in a bear market. Wave five fails to reach the end of wave three as the red line shows.

According to Frost and Prechter, you will see a truncated fifth often after an unusually strong wave 3 thrust.

Truncation Wave Rules

The truncation has rules that govern its shape. They are listed here.

  • The truncation is a motive wave that fails to complete the trend.
  • Subwave five falls to move beyond the end of wave three.
  • The pattern has a 5-3-5-3-5 subwave structure.

-- Thomas Bulkowski

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Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners. Bumper sticker: Watch out for the idiot behind me.