Microsoft Word io elliott Wave Theory doc

Advantages 
1) Satisfies all rules and guidelines under the Wave Principle. 
2) Keeps nearly intact the long term trendline from 1942. 
3) A break of triangle boundaries on wave E is a normal occurrence [see Lesson 1]. 
4) Allows for a simple bull market structure as originally expected. 
5) Coincides with an interpretation for the constant dollar (deflated) Dow and with its corresponding 
break of its lower trendline. 
6) Takes into account the sudden and dramatic rally beginning in August 1982, since triangles 
produce "thrust" [Lesson 1]. 
7) Final bottom occurs during a depressionary economy. 
8) Fits the idea of a four year cycle bottom. 
9) Fits the idea that the Kondratieff Wave plateau has just begun, a period of economic stability and 
soaring stock prices. Parallel with late 1921. 
10) Celebrates the end of the inflationary era or accompanies a "stable reflation." 
Disadvantages 
1) A double three with this construction, while perfectly acceptable, is so rare that no example in any 
degree exists in recent history. 
2) A major bottom would be occurring with broad recognition by the popular press. 
Outlook 
Triangles portend "thrust," or swift moves in the opposite direction traveling approximately the distance 
of the widest part of the triangle. This guideline would indicate a minimum move of 495 points (1067-
572) from Dow 777, or 1272. Since the triangle boundary extended below January 1973 would add 
about 70 more points to the "width of the triangle," a thrust could carry as far as 1350. Even this target 
would only be a first stop, since the extent of the fifth wave would be determined not merely by the 
triangle, but by the entire wave IV pattern, of which the triangle is only part. Therefore, one must 
conclude that a bull market beginning in August 1982 would ultimately carry out its full potential of five 
times its starting point, making it the percentage equivalent of the 1932-1937 market, thus targeting 
3873-3885. The target should be reached either in 1987 or 1990, since the fifth wave would be of 
simple construction. An interesting observation regarding this target is that it parallels the 1920s, when 
after 17 years of sideways action under the 100 level (similar to the recent experience under the 1000 
level), the market soared almost nonstop to an intraday peak at 383.00. As with this fifth wave, such a 
move would finish off not only a Cycle, but a Supercycle advance.