R N Elliott was an accountant in the 1920's and 1930's. After becoming ill later in life, while in recovery he became intruiged with the stock market and began to look for identifiable patterns in individual stocks and in the Dow Jones Industrials. His discovery was a theory of market behavior that is still widely used by many market technicians today.
Elliott's basic theory is that markets move in waves - with five waves in the direction of the main trend (coined 'impulse' waves), and 3 waves against the direction of the trend ('corrective' waves'). He went on to explain how even smaller trends in each of the larger waves exhibited the very same characteristics. He published his findings in 1938 in his classic text, "The Wave Principle". He then detailed his work for several years after in several other writings, one of which was the 1946 work, "Nature's Law - The Secret of the Universe," published just two years before his untimely death.
A proposed mathematical basis for the Elliott wave has been put forward by Ric Ingram.
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