According to Elliot Wave by Frost and Pretcher.
- Wave 1 – Up – Rebound from recent Bottom. Mass pessimism ebbs here.
- Wave 2 – Down – Test of Lows. But previous lows not hit.
- Wave 3 – Up – Powerful Wave.Strength, Breadth, Easy-Credit , Real prosperity
- Wave 4 – Down – Surprising disappointment. Signals that best part of growth over.
- Wave 5 – Up – Final Advance.Psychology creates overvaluation. Leverage at highest.
- Wave 5A – Down – Breakdown. Inexplicable fall. Viewed as buying opportunity [This is Probably the Jan-08 Fall ?]
- Wave 5B – Up – Narrow, Emotional Advance. Aggressive euphoria+ denial
- Wave 5C – Down. Worst of Bear market. Strength, Breadth, Fundamentals collapse
We are almost in 5C.