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Elliott Wave 5 Theory

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Elliott Wave 5 Theory

Elliott Wave (5) is the final leg before the top

Wave (5) is the final leg in the direction of the dominant trend. The news is almost universally positive and everyone is bullish. Unfortunately, this is when many average investors finally buy in, right before the top. Volume is often lower in Wave (5) than in Wave (3), and many momentum indicators start to show divergences (prices reach a new high but the indicators do not reach a new peak).

As such, Elliott Wave (5) is the final leg before the unltimate top.
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