As of 09/29/2023   Indus: 33,508 -158.84 -0.5%     Trans: 14,969 -17.13 -0.1%     Utils: 817 +1.02 +0.1%     Nasdaq: 13,219 +18.04 +0.1%     S&P 500: 4,288 -11.65 -0.3%	YTD  +1.1%    +11.8%   -15.6%    +26.3%    +11.7%	Targets    Overview: 09/15/2023     34,500 or 33,150 by 10/15/2023   15,500 or 14,200 by 10/15/2023   880 or 800 by 10/15/2023   13,750 or 12,700 by 10/15/2023   4,425 or 4,175 by 10/15/2023
Chart Pattern Indicator: on 9/29/23

As of 09/29/2023   Indus: 33,508 -158.84 -0.5%     Trans: 14,969 -17.13 -0.1%     Utils: 817 +1.02 +0.1%     Nasdaq: 13,219 +18.04 +0.1%     S&P 500: 4,288 -11.65 -0.3%	YTD  +1.1%    +11.8%   -15.6%    +26.3%    +11.7%
Targets    Overview: 09/15/2023     34,500 or 33,150 by 10/15/2023   15,500 or 14,200 by 10/15/2023   880 or 800 by 10/15/2023   13,750 or 12,700 by 10/15/2023   4,425 or 4,175 by 10/15/2023
Chart Pattern Indicator: on 9/29/23

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.

 

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