The Elliot wave theory maintains that the bullish behaviour of the share market can be explained as:
A) a series of medium-term and long-term waves.
B) a series of long-term waves upwards, and short-term waves downwards.
C) a series of three major waves upwards, followed by two major waves downwards.
D) none of the given answers.

Question

Quizplus · Accepted Answer

The Elliott Wave Theory posits that markets move in repetitive cycles, which are the result of investor reactions to external influences. According to this theory, a bull market is typically divided into five waves: three waves up (1, 3, 5) which are separated by two waves down (2, 4). This pattern reflects the dominant trend of the market moving upwards in a 5-wave pattern before a significant correction occurs.

The Elliot Wave Theory Maintains That the Bullish Behaviour of the Share