Main Page | See live article | Alphabetical index The Elliott wave theory is the basis of a widely-used technical analysis technique invented by R. N. Elliott in 1939. It is based on the observation that markets exhibit well-defined wave patterns that can be used to predict market direction. The Elliott wave theory states that stock prices are governed by cycles which adhere to the Fibonacci series [0,1,2,3,5,8,13,21,...]. According to the Elliott wave theory, markets move in a predetermined number of waves up and down. Specifically, markets move in five waves up and three waves down and price charts have a self-similar fractal geometry. This article is from Wikipedia. All text is available under the terms of the GNU Free Documentation License.