Bear & Bull Market Third Waves

“C” waves

Declining “C” waves are usually devastating in their destruction. They are third waves and have most of the properties of third waves. It is during this decline that there is virtually no place to hide except cash. The illusions of the previous bull move tend to evaporate as fear takes over. “C” waves are persistent and broad. 1930-1932 was a “C” wave.” On June 20, 2007 we are just beginning another such “C” wave, how long it goes is anyone’s guess.

Third waves

“Third waves are wonders to behold. They are strong and broad, and the trend at this point is unmistakable, increasingly favorable fundamentals enter the picture as confidence returns. Third waves usually generate the greatest volume and price movement and are often the extended waves in a series. It follows that the 3^rd of the 3^rd and 3^rd of the 5^th will be the most volatile points of strength in any sequence. Such points invariably produce breakouts, continuation gaps, volume expansions, exponential breadth, major Dow Theory trend confirmations and runaway price movement, creating large hourly, daily, weekly and monthly or yearly gains depending on the degree of the wave. Virtually all stocks participate in third waves. The third wave produces the most valuable clues to the wave count as it unfolds”. The Elliott Wave Principle by Frost & Prechter.