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Elliott refered to it as failure and only in the third wave.
Pretcher changed it to truncation of the fifth wave. He spend one page on the subject and half of it was an illustration.
He claimed on long term charts there was only two illustrations of an truncation of the fifth. I have seen them quite often on smaller charts as they describe them.
Most analysts I know referr to truncation as an fifth in any spot with failure of new highs.
All the analysts I know say the fifth must not make new highs to be an truncation or failure wave.
Truthfully I venture to say that for the market to change direction. It has to have an failure wave or truncation. And since all patterns end in an fifth wave. Failure would be in an fifth wave at some level that starts the pattern in another direction.
The very definition of failure or truncation is an wave that is not complete or finished.
I personally see them in market tops quite often. They appear as a small fourth wave and then an -1- wave. Then market returns. This is not an complete or finished wave fifth as it is not proportional to the other fifth waves. Not even close. Yet, it has made new highs.
I know when I see this pattern the market is finished in that direction and going the other way.
Truncation or failure and how one defines it is their choice. But any pattern that ends the market going into that direction is truncation or failure or finished to me. I have studied markets for many years now with most of them looking at turn points of wave patterns and what they look like. This one will get me to say truncation, or failure fifth every time.
sillywave
charleydan
