Fortunately for traders, the Wave Principle and its catalogue of patterns
are most consistently evident in short to intermediate term degrees, a few
days to a few months. This is particularly true of commodity markets. If
you have ever seen an attempted wave count of a 20-30 year or longer
monthly chart of soybeans for instance, you have probably seen a great
lesson in futility and imagination!
Yet, the individual bull and bear trends that typically last one to three
years in agricultural markets usually unfold in the basic fives and threes,
trend and counter-trend even in the panic, weather markets. The intermediate
term trends often unfold in text book Elliott wave pattern and price
projections! Just don’t try to explain how the five-wave, two year bull
trend fits into the fifty year cycle from an Elliott wave perspective. It
doesn’t.
Closing Price versus Daily Price Range
While most of our work is done using the time and price of swing
extremes of the daily range of data, daily closing prices should be carefully
considered for wave counts. This will become evident when the
rules come into play. If there is no other evidence related to pattern to
contradict a five wave impulse count other than Wave-4 trade during the
day into the range of Wave-1, check closing prices and only consider the
count to be invalidated if Wave-4 makes a daily close within the closing
range of Wave-1.
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