Third-wave impulse counts wait for a dated cluster

A five-wave impulse still waits for the third swing

The case study frames crowd behavior as a repeating impulse pattern: a five-wave advance, W1 through W5, followed by a three-wave correction, A-B-C. Both types nest into lesser-degree subwaves.

Until the third swing finishes, the opening impulse is treated as wave 1/A and the first correction as wave 2/B. The pattern cannot yet be classified as impulsive or corrective. Wave 3/C is the swing the case study watches most closely, because that third swing is what distinguishes an impulse, wave 3, from a correction, wave C.

The alternation principle is used here to expect a corrective wave 2/B after the first impulse. If the required five lesser-degree subwaves are not visible on the working chart, the study drops to a shorter time frame before labeling.

Projections start only on two authorized bars

Wave extensions are Fibonacci multiples of a completed prior wave, projected from a later origin such as the end of W2 or the low of a nested fifth wave. Those projections are timed only after specified bars: the end of W2 and the end of nested w4:W3.

The EOW2 bar is the trading-time-frame bar that completes primary wave 2 and is the first authorized moment to project W3 extensions. The EOW4:W3 bar is the bar that completes the nested fourth wave inside wave 3 and is the authorized moment to project the nested fifth-wave targets.

On the illustrated five-minute DAX chart, a typical impulse is annotated with W2 equal to 0.50 of W1, W3 equal to 5.5 of W1, and W4 equal to 0.786 of W3, with W5 of the larger W1 through W5 still in progress.

Nested fifth-wave endings inside wave 3 are projected from the low of w5:W3 using 1.272 and 1.618 of primary W1, plus 1.618, 2.618, and 4.236 of primary W2.

A 12-level cluster on the five-minute DAX chart

In the worked example, independent extensions and retracements stacked into a 12-level cluster zone spanning 4139.5 to 4144.5. That five-point band is described as 0.12% of the W3 market price and 10.76% of W3 length.

Cluster members included 4.236 of W1 near 4142, 1.000 of w1:W3 near 4139.5, 0.500 of w3:W3 with 1.272 of W1 near 4140, 0.382 of w1-3:W3 near 4140.5, 4.236 of W2 near 4141, 1.272 of w1:W3 with 4.236 of w2:W3 near 4143, 0.618 of w3:W3 near 4143.5, 2.618 of w4:W3 with 1.618 of W1 near 4144, and 0.500 of w1-3:W3 near 4144.5.

The observed W3 high completed at 4142, which the write-up locates at the midpoint of that cluster.