A second Elliott wave version of “where’s Waldo”. A fun exercise (for the geeks amongst us).
Test your knowledge of Elliott wave rules. Review this chart and find five deliberate mistakes:
Click chart to enlarge.
Two mistakes break core rules, but one involves some subjectivity and may need to be verified on lower time frames (an issue of subdivisions). But both look fairly obvious at this time frame.
Only one mistake is something that Motive Wave will alert you to, so the other four would be something you’d have to be aware of to avoid.
Price points are provided where you may or may not need them, so that provision of price points doesn’t alert you to where the mistakes are.
If anyone wants to have a go at their own (correct) wave count for Palladium, feel free to post in comments.
I’ll post answers to the mistakes, and my version of a correct wave count, after 24 hours.
Play in comments below.
Published @ 06:00 p.m. EST.
Here are the answers to the quiz.
Between Eli and Dreamer you got most of the mistakes.
I think this was too hard because no one got all of them. I’ll do another in a week or so and this time make less mistakes and make them core rules, lets see if anyone can get them all.
Here is a valid wave count for Palladium.
Why is this important?
When a wave count breaks EW rules it leeds to an invalid conclusion. When the wave count meets all EW rules and as many guidelines as possible, the conclusion is more likely to be right. And quite different.
Wave “0” doesn’t exist.
Circle 5 isn’t below circle 3
(E) isn’t below (C)
1. True, but that’s just how Motive Wave starts off a structure if it’s not joined to anything else. That wasn’t an intended mistake.
2. Yes. A leading diagonal may not have a truncated fifth wave.
3. No. For a contracting triangle E may not move beyond the end of C. This triangle for primary B (circle) is correct.
Nice try guys.
A couple of tips for anyone else who wants to have a go over the next few hours:
Cycle a is intended to be a leading diagonal. The convention within EW is to always draw the trend lines for diagonals to indicate a diagonal as opposed to an impulse.
The rule broken here (which Dreamer got) is a leading diagonal may not have a truncated fifth wave.
There is one other rule broken within this structure.
Cycle b itself breaks a rule, Eli got this one but he’s correctly identified another way to see the rule breach. That’s not how I intended it, but he’s absolutely right. So there’s still one more way to see it.
Within cycle b there’s a rule breach as well.
There’s one rule breach within cycle c. It’s to do with the look, or subdivisions, of a wave. This is the subjective one. IRL it should be carefully checked on the daily time frame, but let us assume for this exercise it is as it looks at the monthly chart level.
If anyone finds the finding of mistakes too hard, maybe have a go at your own wave count for Palladium? Maybe that’s easier?
Have I made this exercise too hard?
Ideas
You’ve clearly seen the right wave count Dreamer.
Yes, an expanded flat for the whole thing. Yes, a double zigzag for cycle b fits perfectly.
You’ve correctly identified one deliberate mistake; cycle a ends with a truncated fifth wave, and I’ve intended that is a diagonal (hence the trend lines). But leading diagonals may not have truncated fifth waves.
That’s not a very well known EW rule.
I’ll give it a shot:
1. Cycle wave a, b and c is shown as an expanded flat, but primary wave a is shown as a 5 and the structure is counted as a 5,3,5. It should be a 3 because expanded flats are 3,3,5.
2. (a) In cycle wave a, if it is not a leading diagonal, primary wave 4 moves into primary 1 territory and that would be incorrect.
(b) In cycle wave a, even assuming it is a leading diagonal, primary wave 5 does not end below primary wave 3, so cycle wave a is incorrectly counted as a 5 wave structure.
3. Intermediate wave (c) of the triangle for primary wave b looks incorrect because it is not a completed zigzag
4. in Cycle wave b, primary wave a is counted as a 3, but Cycle wave b is labeled as an a,b,c structure. If it were a double zigzag, it should be x, w, z. If it were a single zig zag, then primary wave a should be a 5 wave structure (5,3,5).
5. Primary wave 1 of cycle wave c does not look like a 5 wave impulse (and it’s not part of an ending diagonal so it needs to be a 5 wave structure).
In #1, i meant cycle wave a not primary wave a 🙂
1. Correct. That’s not how I saw the rule breach, but you are absolutely correct, it’s another way to say it. So really, I’ve made six mistakes!
2. Cycle a is a leading diagonal, identified as such because it’s got trend lines drawn across it (a convention within EW to tell others what structure is intended). Correct, P5 is truncated. But what rule is broken? (I’ve answered this for Dreamer too).
3. It may be a double zigzag or combination, and the second zigzag ends before the first. I’ve no problem with this within a triangle, and there’s no rule broken.
4. Correct. But what rule is broken here? When A waves subdivide as threes and not fives, what structure is the larger correction? Or, in other words, what corrective structures subdivide 3-3-5? And when you get that bit, the next question is if you have a 3-3-5 structure, what are some core rules about it? I’ve broken one here, very VERY clearly broken it.
5. I’ve no problem with primary 1. It looks like a quick sharp impulse, that was quickly reversed into P2.
Thanks Lara. Okay i think i see what you mean for number 4. Because it is labeled ABC, and A is labeled as a 3, you mean it to be a flat. It’s not an expanded flat because B does not move beyond the start of A. But it is not a regular flat either because B is not at least 90% of A?
If that’s right, i think i didn’t see it because it was indeed way too far away for that so i thought the mistake was mislabeling as a single zigzag rather than a double zigzag.
Understood re: 3 and 5 🙂
Excellent. You’ve got my next intended mistake, B is < 0.9 X A.