Elliott Wave Theory

From Reuters Financial Glossary

A technical analysis theory which states that the market follows a repetitive pattern, with each cycle made up of a five-wave rise followed by a three-wave fall. There are many different degrees of trend, but the Elliott Wave theory categorizes nine different trends (or magnitudes) ranging from a grand supercycle covering 200 years to a subminuette of only a couple of hours. The eight-wave cycle is constant, regardless of what degree of trend is being considered.

See also: Technical Analysis