method of analyzing the stock market in waves of threes and twos

A technical discipline used to predict market movements that was discovered by R.N. Elliott in the 1930's, the theory states that markets move in a series of waves. Impulse waves subdivide into five waves (labeled 1,2,3,4,5) and corrective waves subdivide into three waves (labeled A,B,C)

Named after Ralph Elliott, who believed that financial market price valuations follow the same cyclical patterns found in nature. For example, the Elliott Wave Theory advances the belief that charts can identify discernable price movements according to a pattern of waves: five waves advancing and three waves declining.