Please note the odd sequence in counting, as you will see, it is necessary for the inductive analysis. By starting with a top we are assured of beginning our count on a new wave. (The reverse would apply for a bearish wave.)
- The 2 point is a top.
- The 3 point is the bottom of the first decline.
- The 1 point is the bottom prior to point 2 (top), that 3 has surpassed.
- The 4 point is the top of the rally after point 3.
- The 5 point is the bottom after point 4 and is likely to exceed the extended trend line of 1 to 3. This is the entry point for a ride to the EPA line (1 to 4).
- Estimated Price at Arrival (EPA) is trend line of 1 to 4 at apex of extended trend line of 1 to 3 and extended trend line of 2 to 4.
- Estimated Time of Arrival (ETA) is apex of extended trend line of 1 to 3 and 2 to 4.