'JJ.'J 1 V2_.2'J22 10W2002 IJJIUVJJ.L IQfljemE 1U.2 '22.1/2 _I.'1.IJ'2U2_ 06*B£SCG J.2 ■ J'2U2_ L22 22LU2 L^'1221.U2Īs you can see from the chart above, in this example the market has now reached the area of the typical wave C WPT. In this example, as you are looking for the end of the wave C (of an ABC correction) you will be using the typical wave C WPT.įile: (SPY) Standard & Poors Dep R Day Date: 0:95.60 H: 97.15 L: 95.07 C: 96.68 ieFile: (SPY) Standard & Poors Dep R Day Date: 0:95.60 H: 97.15 L: 95.07 C: 96.68 ie. The first question I hear you asking is: Okay, the market is making a rally off the July low and this rally appears to be unfolding in three swings but how do we know how far this rally will go before it ends? The simple answer is that you don't for sure, however the MTPredictor software program has routines that can project the most likely areas where all of the Elliott waves will end.
As can be seen, this ABC rally is against the main trend, which was clearly down, therefore this rally would be viewed as corrective. The market then made a rally, which unfolded as three separate swings, which I have labelled A, B and C on the chart on the previous page. Here you can see in this example on the SPY, the US stock that tracks the S&P stock index, the market was in a clear downtrend going into the low in July. Let's take a look at an example to show you what I mean. As such, the end of the simple ABC correction is a great place to look to enter a new trade, to take advantage as the main trend resumes. This a very important set-up because once the ABC correction is complete, the market normally continues in the original trend direction. In this chapter I would like to introduce these three set-ups and look at them one by one in more detail, starting with the simple ABC correction or TS3 set-up.Ī simple ABC is where the market makes a correction that subdivides into a lesser-degree ABC, where the minor Wave C exceeds the price extreme of the minor Wave A. The TS3 trade set-up - The simple ABC correction by itself
Minor abc correction within a Wave (4) swing.ģ. The TS1 trade set-up - Minor abc correction within a Wave (2orB) swing.Ģ. The MTPredictor software program uses this simple pattern in the three specific set-ups that the software can automatically identify for you. As you have seen over the last few chapters, I believe that the best way to use the Elliott wave theory is to look at each individual pattern in isolation, (the unique MTPredictor isolation approach), and in particular, use the simple ABC correction as a way to identify a high probability, low risk trade set-up.
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