This screen finds five downward Elliott impulse waves: three declining waves separated by two rebounds. Elliott Wave theory, developed by Ralph Nelson Elliott, holds that trends move in five impulse waves in the direction of the trend, followed by three corrective waves, labeled A, B and C. Here the waves are taken from ZigZag swings, which filter out minor price moves. A completed fifth wave often marks the end of the decline, so traders watch for an A-B-C corrective rally to follow.
