As of 04/22/2024   Indus: 38,240 +253.58 +0.7%     Trans: 15,224 +140.68 +0.9%     Utils: 883 +7.72 +0.9%     Nasdaq: 15,451 +169.30 +1.1%     S&P 500: 5,011 +43.37 +0.9%	YTD  +1.5%   -4.2%    +0.2%    +2.9%    +5.0%	Targets    Overview: 04/12/2024     39,800 or 37,150 by 05/01/2024   16,200 or 15,000 by 05/01/2024   885 or 850 by 05/01/2024   16,700 or 15,800 by 05/01/2024   5,250 or 5,025 by 05/01/2024
Chart Pattern Indicator: on 4/1/24

As of 04/22/2024   Indus: 38,240 +253.58 +0.7%     Trans: 15,224 +140.68 +0.9%     Utils: 883 +7.72 +0.9%     Nasdaq: 15,451 +169.30 +1.1%     S&P 500: 5,011 +43.37 +0.9%	YTD  +1.5%   -4.2%    +0.2%    +2.9%    +5.0%
Targets    Overview: 04/12/2024     39,800 or 37,150 by 05/01/2024   16,200 or 15,000 by 05/01/2024   885 or 850 by 05/01/2024   16,700 or 15,800 by 05/01/2024   5,250 or 5,025 by 05/01/2024
Chart Pattern Indicator: on 4/1/24

Bulkowski on the Truncation Elliott Wave Pattern

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 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 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.

This chart is the same as the first 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

See Also

• Here is the main resource for Elliott wave information.
• Support and resistance. Learn the various types.
• Market direction. 7 tips to determining.
• Trading cycles help time your entries and exits.
• Trend change detection using a triangle apex.
• Swing rule. A reliable way to predict price targets.

 

Support this site! Clicking any of the books (below) takes you to Amazon.com If you buy ANYTHING while there, they pay for the referral.
Legal notice for paid links: "As an Amazon Associate I earn from qualifying purchases."

My Stock Market Books Invest for Two-Comma Wealth   Chart Patterns: After the Buy Encyclopedia of Chart Pattern, 3rd Edition Fundamental Analysis and Position Trading Getting Started in Chart Patterns, 2nd Edition Swing and Day Trading Trading Basics

My Novels Training Miles   Bumper's Story Head's Law Remember Me

Copyright © 2005-2024 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 registered trademarks of their respective owners.

Home Advertise Contact Donate Privacy/Disclaimer ☰

Bumper sticker: Watch out for the idiot behind me.