Eliot's wave theory holds that whether it is a bull market or a short market, there will be several bands in each complete cycle. In a bull market cycle, the first five bands are driving and the last three bands are adjusting. In the first five bands, the first, third and fifth, that is, odd numbers push up, and the second and fourth, that is, even numbers, belong to adjustment and decline.
In the stock market, bull market or bear market, the third wave may be the longest, that is, the biggest increase when it rises and the biggest decline when it falls.
General characteristics
(1) The stock price index rises and falls alternately;
(2) Push wave and adjustment wave are the two most basic forms of price fluctuation. Push wave (that is, wave in line with market trend) can be further divided into five wavelets, generally represented by 1 wave, 2 wave, 3 wave, 4 wave and 5 wave, and adjustment wave can also be divided into three wavelets, usually represented by A wave, B wave and C wave.
(3) After the above eight waves (five ups and three downs) are completed, one cycle is completed and the trend enters the next eight wave cycle;
(4) The length of time will not change the wave form, because the market will still develop according to its basic form. Waves can be elongated or narrowed, but their basic form remains the same.
In a word, wave theory can be summed up in one sentence: "eight-wave period"