|Proven Flat-X-Zigzag in the US Dollar Index|
So, we had showed you this chart back when we had labeled the c:5 wave, and called it a Flat wave, ruling out a triangle, and said that it is more typical for the c:5 wave in a Flat to break the a:3 wave. But that did not happen, with a fifth-wave-up still expected soon.
Well, because of the light volume across the holiday, the wave formed another three waves up to (x), and then another three waves down to (y) to deepen the correction. So, that pesky a:3 wave, was, in fact, exceeded lower.
Such a wave structure is known as a Flat-X-Zigzag, or a Double Flat since the (x) wave upward did make another 90% retracement of the of the (w) wave.
I wanted to show you this example when the 5th wave, upward, was confirmed today to show what some fourth waves can look like. First, notice that wave 4 did not overlap wave 1. That is critical! Second, notice how much time the fourth wave took versus the second wave. The fourth wave not only attacked the lower trend channel boundary, it took over a lot of enemy territory, too! In practice, we would again lower the parallel channel to try to help find the end of wave 5, but I didn't want to confuse things for this example. But wave 5 is clearly shown to have made a new high, and formed a valid impulse upward under The Eight Fold Path methodology.
Third, I printed out the values of the Elliott Wave Oscillator for this example. Notice the peak of Wave 3 was 1.61, and the new trough of wave 4 is -0.69; so doing the math, that means that EWO was -42% on the other side of zero line compared to a guideline of +10% to -40%. How's that for the accuracy of a guideline?!
Fourth, notice that little ending diagonal to end the c wave of wave (y)? Perfect in every detail. Wave (v) is shorter than wave (iii), wave (iii) shorter than wave (i), wave (iv) shorter than wave (ii), wave (iv) overlapping wave (i), and all three-wave zigzag sequences. We pointed out that little guy in the live chat room on Friday.
And Fibonacci fifth, I think it is important to note that to do this work, with you must be comfortable with some sloppiness. Not a lot, but some. This is particularly true in fourth waves. It is, in fact, why I have titled this phenomenon of uncertainty in fourth waves, The Fourth Wave Conundrum.
Anybody who can tell you if you will get a regular flat, versus a triangle, versus a double flat, versus a flat-x-zigzag, versus an expanded flat, versus a running triangle, versus a triple-flat, versus a barrier triangle, versus a truncated flat, versus an expanding triangle .. either has much better tools than I can find, or, they quite simply don't know the nature of this task. (But, if you know what to expect, at least, it can help you dial up your patience for the wave.)
This issue of fourth waves is what causes a lot of novices to give up on Elliott Wave, or to go short when the wave is just about to go long causing them big losses. Is that going to be you? Are you going to give up on Elliott Wave? Or are you going to understand it's true nature and see how it can help you?
Oh, and how about that S&P, today?!