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Figure 26 
Figure 27 
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
When wave 3 is extended, waves 1 and 5 tend towards equality or a .618 relationship, as illustrated in Figure 28. Actually, all three impulsive 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 from 1932 to 1937 gained 371.6%, while wave III from 1942 to 1966 gained 971.7%, or 2.618 times as much.
Wave 5's length is sometimes related by the Fibonacci ratio to the length of wave 1 through wave 3, as illustrated in Figure 29. In those rare cases when wave 1 is extended, it is wave 2 that often subdivides the entire impulse wave into the Golden Section, as shown in Figure 30.
Figure 28 Figure 29 Figure 30
In a related observation, unless wave 1 is extended, wave 4 often divides the price range of an impulse wave into the Golden Section. In such cases, the latter portion is .382 of the total distance when wave 5 is not extended, as shown in Figure 31, and .618 when it is, as shown in Figure 32. This guideline explains why a retracement following a fifth wave often has double resistance at the same level: the end of the preceding fourth wave and the .382 retracement point.
Figure 31
Figure 32
Corrective Wave Multiples
In a zigzag, the length of wave C is usually equal to that of wave A, as shown in Figure 33, although it is not uncommonly 1.618 or .618 times the length of wave A. This same relationship applies to a second zigzag (labeled Y) relative to the first (labeled W) in a double zigzag pattern, as shown in Figure 34.
Figure 33 Figure 34
In a regular flat correction, waves A, B and C are, of course, approximately equal. In an expanded flat correction, wave C is usually 1.618 times the length of wave A. Often wave C will terminate beyond the end of wave A by .618 times the length of wave A. Each of these tendencies are illustrated in Figure 35. In rare cases, wave C is 2.618 times the length of wave A. Wave B in an expanded flat is sometimes 1.236 or 1.382 times the length of wave A.
Figure 35
In a triangle, we have found that at least two of the alternate waves are typically related to each other by .618. I.e., in a contracting, ascending or descending triangle, wave e = .618c, wave c = .618a, or wave d = .618b. In an expanding triangle, the multiple is 1.618.
In double and triple corrections, the net travel of one simple pattern is sometimes related to another by equality or, particularly if one of the threes is a triangle, by .618. Finally, wave 4 quite commonly spans a gross or net price range that has an equality or Fibonacci relationship to its corresponding wave 2. As with impulse waves, these relationships usually occur in percentage terms.
These guidelines increase dramatically in utility when used together, as several are simultaneously applicable in almost every situation at the various degrees of trend.
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