Wave personality (PART 1)
Characteristic waves "1":
-Commonly,during the bottom start of waves "1"the accompanied news is generally bad, the period often exhibits the occurrences of recession (during intermediate wave degrees),or even depression and war(during large wave degrees).
-At this point and given that the input information on the current economic situation dos not look good,fundamental analysts continue to lower their earning estimates.
-Quite commonly, wave "1" are formed as a part of the bottoming phase or more generally, during periods of disbelief and thus, tend to demonstrate deeper corrective movement in wave "2"
-Wave"1",the rebound from a preceding bear trend, is constructive and offers a more structured rebound from undervalued price levels.this move often displays a subtle increase in volume and is relatively supported by market breadth.
-The short interest level peaks as the majorly of market participants believe that the overall trend is to the downside.investors view the rally as last chance to sell and get out.
-When waves"1" rise from either large base formed by the previous correction, or from extreme compression. They appear as dynamic and dramatic , and result is that only moderate retraced is seen in waves"2"
Characteristic waves "2":
-Waves"2"act so as interrupt the progress and the directional move of price.They tend to heavily retrace (but not extend) wave"1",especially, since they themselves occur mostly during the periods of disbelief,prior to the market-up phase.
-More often then not,news ans fundamentals tend to be worse during the end (bottom) of wave"2"when compared to the beginning(bottom) of wave"1".
-systematically,during wave"2",investors are convinced that the bear market is proceeding once more following the termination of wave"1"or what they had perceived to be another counter trend rally.
-Waves"2"are often associated with downside non-confirmations.This usually takes the shape of a wakening downside momentum and breadth.adding to this , waves "2" are often accompanied by low volume an volatility,indicating a drying up of selling pressure. It is not uncommon for waves"2"to take more time in formation compared to their preceding waves "1".
Characteristic waves "3":
-Waves"3"are strong and broad;the trend at this point is unmistakable.waves"3" occur are confirmed during the start of what the classic approach highlight as the 'mark-up' phase.
-Turnaround fundamentals stories begin to flow in the financial arena,causing an investor confidence re-build.
-Waves"3" usually generate the greatest volume and price movement,as they most often extended beyond their normal limits,with respect to both time and distance.
-During waves"3",successful classical pattern-breakouts are commonly observed;multi-continuation gaps,volume expansions,exceptional breadth(since almost all share price and market sectors participate),as well as major Dow Theory confirmations and runaway price movement,which create large gains in the market,depending on the wave degree.
-Corrections in waves"3' are usually weak and short-lived as those who bet on buying pull-backs suffer the likelihood of missing the move.
Characteristic waves "4":
-In principle,the occurrence of wave "4" implies that the best part of the growth phase which was evident in wave"3" has ended.
-More often then not, waves"4" appear as a form of a sideways interruption.they develop as part of the building of a base for the final fifth wave move.in part,wave "4"is seen as the "public participation phase" as termed by the classical approach(Dow Theory).
-Lagging stocks build their tops and begin declining during this wave,since only the strength of wave "3" is thought to have pulled them along for the upside participation.This initial deterioration in the market sets the stage for breadth divergences,non-confirmations and subtle signs of weakness during the fifth wave.
Characteristic waves "5":
-specifically,in stocks,waves"5"are always less dynamic than waves"3" in terms of breadth.With the exception fifth wave extensions,they usually display a weaker momentum as well.
-As a general feature, volumes in waves"5" tend to be less when compared to wave"3" volumes.
-during advancing waves"5",optimism runs extremely high as further public participation emerges, despite a narrowing of breadth. Nevertheless,market action dose improve relative to prior corrective wave rallies.
-Commonly,during the top (end) of waves"5",the accompanied news is positive,implying that prosperity and peace guaranteed forever as arrogant complacency becomes evident in the financial community and financial news.
Characteristic waves "A":
-During "A" waves of bear markets;the investment world is generally convinced that this reaction is just a pullback pursuant to the next leg of advance. the public surges to the buy side despite the first valid technically damaging cracks in trend patterns of individual stocks.
-The "A" waves set the tone for the waves that follow. A five-wave "A" indicates a start of a directional or trending mode,while a three-wave "A" indicates that a flat or sideways mode will likely follow.
Characteristic waves "B":
-"B" waves are phonies. They are sucker plays,bull traps , speculators paradise, orgies of oddlotter mentality or expressions of dumb institutional complacency (or both).
-They are often accompanied by an emotional advance of narrow list of stock,which would be evident through non-confirming signs of TA-breadth and momentum indications.
-"B" waves are often unconfirmed by all/broader market indices and are almost always expected to be completely retraced by the following wave "C".
Characteristic waves "C":
-"C"waves inherit most of characteristic and properties of third waves in the sense that they are persistent and broad .
-In the case of bearish "C"waves:
+They are usually devastating in their destruction .
+There is virtually no place to hide except cash
+The false impression that the bull trend is "back on track" which was held throughout its preceding waves "A" and "B" tend to fade away,as fear and occasionally multiple panic phase take over.
+Fundamentals ultimately collapse in response of the market action.
-In the case of bullish "C" waves:
+They are constructive and often render sizable gains or return in waves of large degrees.
+They usually give a fake indication that the bull trend is back to stay.
Source IFTA
-Commonly,during the bottom start of waves "1"the accompanied news is generally bad, the period often exhibits the occurrences of recession (during intermediate wave degrees),or even depression and war(during large wave degrees).
-At this point and given that the input information on the current economic situation dos not look good,fundamental analysts continue to lower their earning estimates.
-Quite commonly, wave "1" are formed as a part of the bottoming phase or more generally, during periods of disbelief and thus, tend to demonstrate deeper corrective movement in wave "2"
-Wave"1",the rebound from a preceding bear trend, is constructive and offers a more structured rebound from undervalued price levels.this move often displays a subtle increase in volume and is relatively supported by market breadth.
-The short interest level peaks as the majorly of market participants believe that the overall trend is to the downside.investors view the rally as last chance to sell and get out.
-When waves"1" rise from either large base formed by the previous correction, or from extreme compression. They appear as dynamic and dramatic , and result is that only moderate retraced is seen in waves"2"
Characteristic waves "2":
-Waves"2"act so as interrupt the progress and the directional move of price.They tend to heavily retrace (but not extend) wave"1",especially, since they themselves occur mostly during the periods of disbelief,prior to the market-up phase.
-More often then not,news ans fundamentals tend to be worse during the end (bottom) of wave"2"when compared to the beginning(bottom) of wave"1".
-systematically,during wave"2",investors are convinced that the bear market is proceeding once more following the termination of wave"1"or what they had perceived to be another counter trend rally.
-Waves"2"are often associated with downside non-confirmations.This usually takes the shape of a wakening downside momentum and breadth.adding to this , waves "2" are often accompanied by low volume an volatility,indicating a drying up of selling pressure. It is not uncommon for waves"2"to take more time in formation compared to their preceding waves "1".
Characteristic waves "3":
-Waves"3"are strong and broad;the trend at this point is unmistakable.waves"3" occur are confirmed during the start of what the classic approach highlight as the 'mark-up' phase.
-Turnaround fundamentals stories begin to flow in the financial arena,causing an investor confidence re-build.
-Waves"3" usually generate the greatest volume and price movement,as they most often extended beyond their normal limits,with respect to both time and distance.
-During waves"3",successful classical pattern-breakouts are commonly observed;multi-continuation gaps,volume expansions,exceptional breadth(since almost all share price and market sectors participate),as well as major Dow Theory confirmations and runaway price movement,which create large gains in the market,depending on the wave degree.
-Corrections in waves"3' are usually weak and short-lived as those who bet on buying pull-backs suffer the likelihood of missing the move.
Characteristic waves "4":
-In principle,the occurrence of wave "4" implies that the best part of the growth phase which was evident in wave"3" has ended.
-More often then not, waves"4" appear as a form of a sideways interruption.they develop as part of the building of a base for the final fifth wave move.in part,wave "4"is seen as the "public participation phase" as termed by the classical approach(Dow Theory).
-Lagging stocks build their tops and begin declining during this wave,since only the strength of wave "3" is thought to have pulled them along for the upside participation.This initial deterioration in the market sets the stage for breadth divergences,non-confirmations and subtle signs of weakness during the fifth wave.
Characteristic waves "5":
-specifically,in stocks,waves"5"are always less dynamic than waves"3" in terms of breadth.With the exception fifth wave extensions,they usually display a weaker momentum as well.
-As a general feature, volumes in waves"5" tend to be less when compared to wave"3" volumes.
-during advancing waves"5",optimism runs extremely high as further public participation emerges, despite a narrowing of breadth. Nevertheless,market action dose improve relative to prior corrective wave rallies.
-Commonly,during the top (end) of waves"5",the accompanied news is positive,implying that prosperity and peace guaranteed forever as arrogant complacency becomes evident in the financial community and financial news.
Characteristic waves "A":
-During "A" waves of bear markets;the investment world is generally convinced that this reaction is just a pullback pursuant to the next leg of advance. the public surges to the buy side despite the first valid technically damaging cracks in trend patterns of individual stocks.
-The "A" waves set the tone for the waves that follow. A five-wave "A" indicates a start of a directional or trending mode,while a three-wave "A" indicates that a flat or sideways mode will likely follow.
Characteristic waves "B":
-"B" waves are phonies. They are sucker plays,bull traps , speculators paradise, orgies of oddlotter mentality or expressions of dumb institutional complacency (or both).
-They are often accompanied by an emotional advance of narrow list of stock,which would be evident through non-confirming signs of TA-breadth and momentum indications.
-"B" waves are often unconfirmed by all/broader market indices and are almost always expected to be completely retraced by the following wave "C".
Characteristic waves "C":
-"C"waves inherit most of characteristic and properties of third waves in the sense that they are persistent and broad .
-In the case of bearish "C"waves:
+They are usually devastating in their destruction .
+There is virtually no place to hide except cash
+The false impression that the bull trend is "back on track" which was held throughout its preceding waves "A" and "B" tend to fade away,as fear and occasionally multiple panic phase take over.
+Fundamentals ultimately collapse in response of the market action.
-In the case of bullish "C" waves:
+They are constructive and often render sizable gains or return in waves of large degrees.
+They usually give a fake indication that the bull trend is back to stay.
Source IFTA
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