Elliott Wave Theory: What is Double Wave 3? Take the Dow Jones Index DJI as an example

三马哥 · 2023-03-25T02:25:01.000Z

Double three waves generally refer to the continuous occurrence of two different forms of correction waves and become part of a larger level correction wave. Usually, different forms of correction waves can be random combinations of zigzag, flat (or expanding flat), and triangle shapes. Elliott himself called this pattern a double three wave in his original wave theory. This article will take the daily trend of the Dow Jones Index in 2022 as an example to explain how the double three-wave pattern evolves step by step. What is a double triple wave? Double three waves generally refer to the continuous occurrence of two different forms of correction waves and become part of a larger level correction wave. Usually, different forms of correction waves can be random combinations of zigzag, flat (or expanding flat), and triangle shapes. Elliott himself called this pattern a double three wave in his original wave theory.

Double three waves generally refer to two different forms of adjustment waves appearing consecutively, becoming part of a larger level of adjustment waves. Usually, different forms of adjustment waves can be a random combination of zigzag, platform (or expanding platform), and triangle shapes. Elliott himself called this pattern a double three waves in the original wave theory. This article will take the daily trend of the Dow Jones Index in 2022 as an example to illustrate how the double three wave pattern evolved step by step.
What is a Double Wave 3? 
Double three waves generally refer to two different forms of corrective waves appearing in succession, becoming part of a larger level corrective wave. Usually, different forms of corrective waves can be a random combination of zigzag, platform (or expanding platform), and triangle shapes. Elliott himself called this pattern a double three waves in the original wave theory.
 
The occurrence of double three waves usually means that prices take longer to correct. When the initial corrective wave ends, it is often difficult for us to judge whether the adjustment is completely over. This is also the difficulty in judging corrective waves. As the next "three wave" pattern continues, we gradually confirm that the adjustment is still continuing.
Double Wave 3 from the Dow Jones Daily Chart 
From the daily chart of the Dow Jones Industrial Average below, we can see that since the beginning of 2022, the stock index has ended the previous long-term impulse wave with a terminal inclined triangle. The Dow Jones Index has begun to move out of a year-long adjustment wave. This double triple wave can be clearly divided into two different stages, with mid-June 2022 as the boundary.
 
From the beginning of 2022 to mid-June, the Dow Jones Index went out of a zigzag correction wave. That is, the trend of the stock index has a clear downward trend. However, since the periodic bottom appeared on June 16, the Dow Jones Index began to rebound. At the same time, the RSI indicator also quickly rebounded from a position close to oversold. The Dow Jones Index has since started its second "three wave" pattern.
 
In the second half of 2022, the Dow Jones Index began to adjust further. While the outlook for the initial correction remains unclear, as Subwave A comes to an end, we can confirm that the Dow will continue to trade sideways. It is worth noting that on August 17, 2022 (that is, when sub-wave A has just completed), we are still unsure of the specific shape of the second half of the double three-wave. According to the "alternating" rule of the wave theory, we tend to believe that after a strong directional correction wave, there may be a "sideways" correction wave, but whether it is a platform shape or a triangle is unknown.
 
As the price further evolves, we find that the second wave of adjustment has gone out of the "expanding platform" shape. The end point of sub-wave B crosses the starting point of sub-wave A, and the end point of sub-wave C also crosses the end point of sub-wave A. It is worth noting that it is still uncertain whether there will be more corrections in the future, unless we see the iconic formation of the terminal diagonal triangle emerge.
In any case, the Dow Jones Industrial Average formed a typical double three-wave pattern in 2022, which is often found in the price trends of other assets.