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Series of 1s and 2s in Progress 
This count [see Figure A-2] has been my ongoing hypothesis for most of the time since 1974, although 
the uncertainty in the 1974-1976 wave count and the severity of the second wave corrections have 
caused me a good deal of grief in dealing with the market under this interpretation. 
This wave count argues that the Cycle wave correction from 1966 ended in 1974 and that Cycle wave 
V began with the huge breadth surge in 1975-1976. The technical name for wave IV is an expanding 
triangle. The complicated subdivision so far in wave V suggests a very long bull market, perhaps 
lasting another ten years, with long corrective phases, waves (4) and [4] , interrupting its progress. 
Wave V will contain a clearly defined extension within wave [3], subdividing (1)-(2)-(3)-(4)-(5), of which 
waves
(1) and (2) have been completed. The peak would ideally occur at 2860, the original target calculated 
in 1978. [The main] disadvantage of this count is that it suggests too long a period for the entire wave 
V, as per the guideline of equality. 

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Figure A-2 
Advantages 
1) Satisfies all rules under the Wave Principle. 
2) Allows to stand A.J. Frost's 1970 forecast for an ultimate low for wave IV at 572. 
3) Accounts for the tremendous breadth surge in 1975-1976. 
4) Accounts for the breadth surge in August 1982. 
5) Keeps nearly intact the long term trendline from 1942. 
6) Fits the idea of a four year cycle bottom. 
7) Fits the idea that the fundamental background looks bleakest at the bottom of second waves, not at 
the actual market low. 
8) Fits the idea that the Kondratieff Wave plateau is partly over. Parallel with 1923. 
Disadvantages 
1) 1974-1976 is probably best counted as a "three," not a "five." 
2) Wave (2) takes six times as much time to complete as does wave (1), putting the two waves 
substantially out of proportion. 
3) The breadth of the 1980 rally was substandard for the first wave in what should be a powerful 
Intermediate third. 
4) Suggests too long a period for the entire wave V, which should be a short and simple wave 
resembling wave I from 1932 to 1937 rather than a complex wave resembling the extended wave III 
from 1942 to 1966 (see Elliott Wave Principle, page 155). 
Next Lesson: A Forecast From 1982, Part II