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Steps Elliott Wave theory could be considered under this topic, but Edson Gould said it best because of its simplicity: "Always expect a third step, but be prepared for a fourth." When it comes to the 3 step pattern, there are countless variations. Price and/or time symmetry are not uncommon features to this pattern. The recent low on April 4 2001 in the Nasdaq cash market is a good illustration of a 3 step pattern with both time and price symmetry. Symmetrical moves are a very important dynamic in the analysis here at Structural Logic and are mentioned frequently as APP's (alternate price projections) or ATP's (alternate time projections). Robert Miner introduced these concepts in his book "Dynamic Trading." Robert Miner's application of these terms are much more broad in ratio scope than here. Structural Logic's ratio applications of APP's and ATP's strictly adhere to100% time and price symmetries. Sometimes, markets do experience 4th steps up or down, and we do need to be prepared for them. Markets do love the number three in all its myriad forms, but sometimes there are more powerful forces at work that need to accounted for. This was a very common theme during the 1966-1974 bear markets on the Dow weekly charts. 3 step bear market of 1966-1974. |