Glossary
A-B-C correction Alphabetical labeling for a three-wave structure in a correction pattern. Wave A is the first wave moving against the prevailing trend of the five-wave structure. Wave B is a corrective wave to Wave A. Wave C is the final wave to complete the three-wave structure movement. In a zigzag, Wave C exceeds the extreme of Wave A, but not in an irregular A-B-C correction.
alternate count An alternate interpretation of wave counts that is equally applicable to a given market situation.
Alternation, Rule of The alternation of patterns between Wave 2 and Wave 4 in a five-wave structure. If Wave 2 is a simple pattern, then Wave 4 is expected to be a complex pattern. In a complex correction, if the preceding corrective pattern is a flat, then the pattern following will be of another formation.
confirmation Refers to two different factors agreeing with one another. Volume is said to confirm the price action if volume is rising together with the price.
continuation pattern Refers generally to a corrective pattern such as a triangle, wedge, pennant, or flag. Indicates a pause in the prevailing trend.
divergence Divergence occurs when the directional movement of the price disagrees with that of the oscillator. Divergence generally indicates trend reversal.
dividend yield Dividend per share divided by the current price per share expressed as a percentage.
double top/bottom Refers to a price pattern in an uptrend showing two conspicuous peaks. In a downtrend, the price pattern ...
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