Microsoft Word io elliott Wave Theory doc

The Supercycle Wave from 1932 
Supercycle wave (V) has been in progress since 1932 and is still unfolding (see Figure 5-3). If there 
were such a thing as a perfect wave formation under the Wave Principle, this long term sequence of 
Elliott waves would be a prime candidate. The breakdown of Cycle waves is as follows: 
Wave I: 1932 to 1937 — This wave is a clear cut five-wave sequence according to the rules 
established by Elliott. It retraces .618 of the market decline from the 1928 and 1930 highs and, within 
it, the extended fifth wave travels 1.618 times the distance of the first through third waves. 
Wave II: 1937 to 1942 — Within wave II, subwave [A] is a five, and wave [C] is a five, so the entire 
formation is a zigzag. Most of the price damage occurs in wave [A]. Thus, there is great strength in the 
structure of the entire corrective wave, much beyond what we would normally expect, as wave [C] 
travels only slightly into new low ground for the correction. Most of the damage of wave [C] was time 
based or erosive, as continued deflation pushed stock prices to price/earnings levels which were 
below those even in 1932. A wave of this construction can have the power of a flat. 
Wave III: 1942 to 1965(6) — This wave is an extension, by which the Dow rose nearly 1000% in 
twenty-four years. Its principal features are as follows: 
1) Wave [4] is a flat, alternating with a zigzag, wave [2]. 
2) Wave [3] is the longest Primary wave and an extension. 

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3) Wave [4] corrects to near the top of the preceding fourth wave of one lesser degree and holds well 
above the peak of wave [1]. 
4) The length of subwaves [1] and [5] are related by the Fibonacci ratio in terms of percentage 
advance (129% and 80% respectively, where 80 = 129 x .618), as is often the case between two non-
extended waves.