##### Document Text Contents

Page 7

WAVE

POINT

Z

E

R

O

CONDITIONS

A coincidence of Pattern,

Price and Time has come

together to mark a major

pivot that we have

identified as the 5th of a 5th

wave. The Elliott Wave

pattern may not always be

the one that we were

expecting. When a fractal

occurs it means that a

wave has ended, ready or

not.

IMPLICATIONS

The suspected high or low

tick at a major pivot point

is the ideal entry point.

This entry has the least

capital risk because it is

closest to the initial stop

loss point - the pivot. The

trade off is that there will

be a higher percentage of

losses. The market does

not always reverse where

we want it to! The pivot

point is Point Zero.

FIBONACCI

The most common

Fibonacci

relationships between

Elliott waves of the

same degree.

W.1

Will follow either a three

wave A-B-C or a five

wave impulse pattern.

W.1 that follows an A-B-C

is an impulse wave. W.1

that follows a five wave

pattern is W.A of an A-B-

C pattern.

Modern Elliott Wave

analysis allows for five

wave triangle patterns in

the W.1 position of lesser

degree waves. That

means that W.4:1 can

overlap W.1:1 without

invalidating the pattern as

an impulse wave. The

internal structure is 3-3-3-

3-3.

W.1 triangles are never

allowed as lesser degree

waves within a larger

degree W.3.

New W.1 of the same

degree should

overbalance the

immediately prior

corrective pattern in price

range but not necessarily

in time.

PRICE

Use internal swings

of lesser degree to

project termination of

W.1

TIME

Impulse W.1 usually

overbalances in time

the prior counter

trend swing.

Page 8

W.2

Zig-Zag (ABC) most

common.

Triangles least likely in

W.2 position and most

likely in W.4.

W.2 most likely to be more

than 50% in time of W.1.

Avoid premature entry.

Patience required.

Wait for C wave

completion. The first

counterswing is likely just

the A leg of an ABC

pattern.

Must not penetrate Point

Zero or suspected change

in trend from Point Zero is

probably wrong.

PRICE

> 50% < 78.6% W.1

TIME

> 50% W.1 minimum

> 62% < 162% of

W.1 most likely

W.3

Usually the longest and

strongest trending wave of

the sequence.

W.3 cannot be the

shortest wave of a five

wave sequence. W.3 does

not have to be longest

wave but it can never be

the shortest. This is one of

the very few Rules of

Elliott Wave analysis.

W.3 always synchronizes

with an Oscillator

extreme. The Oscillator

extreme usually occurs

before the price extreme.

W.3 confirmed when the

price extreme of W.1 is

exceeded. Price should

not come back and trade

beyond the beginning of

W.2.

If suspected W.3

completes five waves of

lesser degree and is less

than 100% of W.1

considers that the

suspected W.3 is W.C of a

corrective pattern and not

an impulse wave.

Once W.3 exceeds 100%

of W.1 look for price to

reach and probably

exceed 162% of W.1

Look for termination

conditions when W.3

exceeds 262% expansion

of W.1 or 424%

retracement of W.2

PRICE

W.3 162% - 262% of

W.1

W.3 162% - 262% of

W.2

TIME

W.3 almost always

longer in time than

W.1

W.3 often equal in

time to complete W.0

through W.2

sequence.

Page 9

W.4

If W.2 was an ABC then

W.4 will probably be

complex and vica versa.

This is the principle of

alternation.

Look for minimum of three

fractals in lower time

frame and minimum price

relationship of 62% to W.2

W.4 should not penetrate

W.1. A W.4 close into W.1

invalidates the W.5 setup.

This is a Rule.

Price extreme often

occurs before the

termination of the W.4

pattern. In complex waves

Time factors should be the

primary consideration.

If Wave 4 has exceed

>50% of Wave 3, the

possibility of a 5th wave

failure is increased.

The Oscillator will cross

the zero line two times

during W.4. First against

the direction of W.3 and

then in the direction of

W.3 to signal that W.4 has

fulfilled minimum

requirements for

completion.

PRICE

< 50% of W.3

W.4 38% W.3

common

W.4:W.3 < W.2:W1

on percentage basis

W.4 62% 100%

162% W.2

W.4 > 23.6% < 50%

W.0 - W.3

TIME

W.4 most often

related to W.3 or W.0

- W.3

Often longer in time

than W.3 / W.0 - W.3

W.4 138% - 162% of

Parallel Projection of

ends of W.1 - W.3

measured from

beginning of W.2

W.5

Look for termination when

W.5 has completed at

least five fractals in lower

time frame and is in a

coincidence of Price and

Time.

W.5 has made new price

extreme and price and the

Oscillator are diverged.

When the extreme of

Wave 3 is exceeded the

maximum stop loss should

be raised to Wave 4.

When four fractals are in

place for Wave 5 trailing

stops should be moved

very close to the market.

If Wave 4 has exceed

>50% of Wave 3, the

possibility of a 5th wave

failure is increased.

PRICE

W.5 = 62% 100%

162% W.1

If W.3 extended W.5=

62% or 38% of W. 0-

3

W.5=127%, 162%,

200%, 262% W.4

TIME

W.5 > W.4 if W.4 is a

simple ABC

W.5 < W.4 if W.4 is

complex

WAVE

POINT

Z

E

R

O

CONDITIONS

A coincidence of Pattern,

Price and Time has come

together to mark a major

pivot that we have

identified as the 5th of a 5th

wave. The Elliott Wave

pattern may not always be

the one that we were

expecting. When a fractal

occurs it means that a

wave has ended, ready or

not.

IMPLICATIONS

The suspected high or low

tick at a major pivot point

is the ideal entry point.

This entry has the least

capital risk because it is

closest to the initial stop

loss point - the pivot. The

trade off is that there will

be a higher percentage of

losses. The market does

not always reverse where

we want it to! The pivot

point is Point Zero.

FIBONACCI

The most common

Fibonacci

relationships between

Elliott waves of the

same degree.

W.1

Will follow either a three

wave A-B-C or a five

wave impulse pattern.

W.1 that follows an A-B-C

is an impulse wave. W.1

that follows a five wave

pattern is W.A of an A-B-

C pattern.

Modern Elliott Wave

analysis allows for five

wave triangle patterns in

the W.1 position of lesser

degree waves. That

means that W.4:1 can

overlap W.1:1 without

invalidating the pattern as

an impulse wave. The

internal structure is 3-3-3-

3-3.

W.1 triangles are never

allowed as lesser degree

waves within a larger

degree W.3.

New W.1 of the same

degree should

overbalance the

immediately prior

corrective pattern in price

range but not necessarily

in time.

PRICE

Use internal swings

of lesser degree to

project termination of

W.1

TIME

Impulse W.1 usually

overbalances in time

the prior counter

trend swing.

Page 8

W.2

Zig-Zag (ABC) most

common.

Triangles least likely in

W.2 position and most

likely in W.4.

W.2 most likely to be more

than 50% in time of W.1.

Avoid premature entry.

Patience required.

Wait for C wave

completion. The first

counterswing is likely just

the A leg of an ABC

pattern.

Must not penetrate Point

Zero or suspected change

in trend from Point Zero is

probably wrong.

PRICE

> 50% < 78.6% W.1

TIME

> 50% W.1 minimum

> 62% < 162% of

W.1 most likely

W.3

Usually the longest and

strongest trending wave of

the sequence.

W.3 cannot be the

shortest wave of a five

wave sequence. W.3 does

not have to be longest

wave but it can never be

the shortest. This is one of

the very few Rules of

Elliott Wave analysis.

W.3 always synchronizes

with an Oscillator

extreme. The Oscillator

extreme usually occurs

before the price extreme.

W.3 confirmed when the

price extreme of W.1 is

exceeded. Price should

not come back and trade

beyond the beginning of

W.2.

If suspected W.3

completes five waves of

lesser degree and is less

than 100% of W.1

considers that the

suspected W.3 is W.C of a

corrective pattern and not

an impulse wave.

Once W.3 exceeds 100%

of W.1 look for price to

reach and probably

exceed 162% of W.1

Look for termination

conditions when W.3

exceeds 262% expansion

of W.1 or 424%

retracement of W.2

PRICE

W.3 162% - 262% of

W.1

W.3 162% - 262% of

W.2

TIME

W.3 almost always

longer in time than

W.1

W.3 often equal in

time to complete W.0

through W.2

sequence.

Page 9

W.4

If W.2 was an ABC then

W.4 will probably be

complex and vica versa.

This is the principle of

alternation.

Look for minimum of three

fractals in lower time

frame and minimum price

relationship of 62% to W.2

W.4 should not penetrate

W.1. A W.4 close into W.1

invalidates the W.5 setup.

This is a Rule.

Price extreme often

occurs before the

termination of the W.4

pattern. In complex waves

Time factors should be the

primary consideration.

If Wave 4 has exceed

>50% of Wave 3, the

possibility of a 5th wave

failure is increased.

The Oscillator will cross

the zero line two times

during W.4. First against

the direction of W.3 and

then in the direction of

W.3 to signal that W.4 has

fulfilled minimum

requirements for

completion.

PRICE

< 50% of W.3

W.4 38% W.3

common

W.4:W.3 < W.2:W1

on percentage basis

W.4 62% 100%

162% W.2

W.4 > 23.6% < 50%

W.0 - W.3

TIME

W.4 most often

related to W.3 or W.0

- W.3

Often longer in time

than W.3 / W.0 - W.3

W.4 138% - 162% of

Parallel Projection of

ends of W.1 - W.3

measured from

beginning of W.2

W.5

Look for termination when

W.5 has completed at

least five fractals in lower

time frame and is in a

coincidence of Price and

Time.

W.5 has made new price

extreme and price and the

Oscillator are diverged.

When the extreme of

Wave 3 is exceeded the

maximum stop loss should

be raised to Wave 4.

When four fractals are in

place for Wave 5 trailing

stops should be moved

very close to the market.

If Wave 4 has exceed

>50% of Wave 3, the

possibility of a 5th wave

failure is increased.

PRICE

W.5 = 62% 100%

162% W.1

If W.3 extended W.5=

62% or 38% of W. 0-

3

W.5=127%, 162%,

200%, 262% W.4

TIME

W.5 > W.4 if W.4 is a

simple ABC

W.5 < W.4 if W.4 is

complex