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Motive Wave Multiples
Retracements are where most analysts place their focus. Far more reliable, however, are relationships between alternate waves, or lengths unfolding in the same direction, as explained in the next section.
Motive Wave Multiples
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When wave 3 is extended, waves 1 and 5 tend towards equality or a .618 relationship, as illustrated in Figure 26. Actually, all three motive waves tend to be related by Fibonacci mathematics, whether by equality, 1.618 or 2.618 (whose inverses are .618 and .382). These impulse wave relationships usually occur in percentage terms. For instance, wave I in the Dow Jones Industrials from 1932 to 1937 gained 371.6%, while wave III from 1942 to 1966 gained 971.7%, or 2.618 times as much.
Figure 26 Figure 28 Figure 27
