Wall Street's most trusted market prediction method!
The most complete lecture on Elliott Wave Theory

This book presents the first scientific and objective approach to market forecasting through Elliott Wave Theory.
Elliott Wave Theory views the movements of the stock market as a natural phenomenon and uses the Fibonacci sequence, which is commonly observed in natural phenomena, to explain and forecast the stock market.


In the early 1930s, Elliott introduced wave theory, defining, quantifying, and categorizing seemingly random movements of mass psychology, transforming them into visual price patterns.
Because Elliott defined psychological processes as repetitive phenomena that follow general, mathematical laws, he was able to study price movements to predict the current market position, the public's psychological state, and future economic movements.
Unfortunately, however, many of the concepts and ideas that exist in the original Elliott Wave Theory for real-time application remain a task for analysts to discover on their own.

Author Glen Neely has significantly expanded and refined the concepts first discovered by Elliott through over a decade of intense research, live trading, and teaching.
This book is based on Neely's pattern analysis of market movements using Elliott Wave Theory rather than on Elliott Wave Theory itself.
Even without necessarily borrowing the concepts of Elliott Wave Theory, the patterns commonly seen in the market are logically and systematically organized.


This book contains new techniques, principles, and market price patterns that go beyond Elliott's discoveries.
These new findings will dramatically improve the accuracy of your market predictions and give you more confidence in your trading.

By integrating the fundamental principles of Elliott Wave Theory, the Neely Method, and the new techniques introduced in this book, you will be able to comprehensively describe and interpret virtually any market movement.
This allows you to determine the current state of the market using only price information in most cases.
No more wasting time chasing countless, sometimes subjective, metrics.
It is important to remember that no matter how well a mechanical system or indicator has performed in predicting market movements over a certain period of time, it becomes useless the moment the patterns that emerged during the system's formation cease.

--- p.42

Condition 'a' - if m0 is less than 38.2% of m1
Mark “:5” at the end of m1.
If m4 does not go beyond the end of m0, m2 may be an x-wave and m1 may be the wave that ends the corrective pattern within the complex corrective process.
Write “:s5” at the end of m1 and “x:c3?” at the end of m2.
When comparing m(-1), m1, and m3, if m1 is not the shortest wave of the three, the longest wave is close to or exceeds 161.8% of the second longest wave, and m3 retraces at least 61.8%, then the market is forming an impulse wave with m1 (wave 3) at its center.
You can read the rest of this section to learn about the many more structural symbols that could be assigned to m1.

--- p.151

So far, this book has focused on the very basic concept of monowaves.
To advance to the advanced level of wave theory application, the concept of a 'group', which is a combination of monowaves, must be grasped in one's head.
‘Structure flow’ is the first step toward moving in that direction.
To continue the analysis process, it is necessary to further differentiate between impulse and corrective waves by introducing more specific rules.
Here we will present a very tricky rule called the 'bottom line rule' so that it can be applied to the standard Elliott patterns and their variations.
As you may have learned from the previous sections, each structural flow represents a specific Elliott pattern.
In the process of determining a pattern, the shape of each structural flow is one of the most important factors to consider.

--- p.240

The basic structure of the wave group created through aggregation (which is covered in Chapter 4) will be used to form larger standard or non-standard structured flows.
Let me give you an example.
The monowave groups in Figure 7-1 already have structural symbols attached.
If observed properly and verified properly, the flat pattern shown in Figure 7-1 will be judged to be valid, and if this is summarized, the basic structure called “:3” is created.
By applying the contents of Chapter 3, you can form larger patterns by combining the basic structural symbols of a pattern and the structural symbols of surrounding patterns, regardless of whether they are concentrated or not.
Before looking for a new structural flow, check that there are at least five internal waves assigned a basic structural symbol that must be analyzed.
After collapsing the flats in Figure 7-1, only three structural symbols remain.
Therefore, two additional monowaves are added to Figure 7-2.
If we go back from “:L5” at the peak of the wave group in Figure 7-2, only the concentrated values ​​of the recently discovered flat pattern should be used as part of the new structural flow.
--- p.328

It should now be clear why we discussed structure rather than progress indicators earlier in this book.
Nevertheless, it may still be unclear why structure should be the primary concern.
As mentioned in the previous section, the structural symbol is the final step, not the first step, of the wave pattern.
What's not mentioned is that 'after the progress symbols have served their purpose of clarifying the pattern, they don't do much to clarify the bigger picture.'
Once the pattern is complete, it is necessary to reduce the larger waves to their basic structure through a process called consolidation (Chapter 7).
This basic structure is necessary to integrate the pattern into larger waves with other concentrated waves.
In an already concentrated pattern, information about the progression sign for each subwave is no longer valuable.
To see how sub-waves that are concentrated on a longer-term chart become part of a larger wave pattern, you need to use the basic structure of the concentrated pattern.
--- p.409

Shock pattern
If wave 1 is extended
When wave 1 is the longest impulse wave, wave 3 should not exceed 61.8% of wave 1.
If wave 3 is 61.8% of wave 1 (the law of wave change applies), then wave 5 will generally be 38.2% of wave 3.
If wave 3 is 38.2% of wave 1, then wave 5 would generally be 61.8% of wave 3.
These are all the internal relationships that can appear when wave 1 is extended (Figure 12-26).

--- p.520