Channeling Technique

selves are fourth waves, tend to register their maximum retracement within the span of travel of the previous fourth wave of one lesser degree, most commonly near the level of its terminus. Note in Figure 21, for instance, how wave 2 ends at the level of wave four of 1, and how wave 4 ends at the level of wave four of 3.

CHANNELING TECHNIQUE

Elliott noted that parallel trend channels typically mark the upper and lower boundaries of impulse waves, often with dramatic precision. Analysts should draw them in advance to assist in determining wave targets and to provide clues to the future development of trends.

Figure 21