CMT Market Cycles Flashcards

In Elliott Wave Theory, a 'flat' correction is characterized by:

Answer: A sideways 3-3-5 wave corrective pattern

A flat correction is a 3-3-5 wave structure where the A and B waves are three-wave moves and wave C typically ends near the start of wave A, producing a sideways correction.

Seasonal analysis in CMT typically examines price tendencies over periods of:

Answer: Weeks, months, and annually recurring patterns

Seasonal analysis studies recurring price tendencies on a weekly, monthly, or annual basis, identifying patterns that repeat due to economic, agricultural, or calendar factors.

The principle of 'cycle synchrony' in Hurst's cycle analysis states that:

Answer: All cycles of different lengths tend to bottom simultaneously

Hurst's principle of synchrony states that cycles of all lengths tend to bottom at the same time, creating significant lows when multiple cycles align at their troughs.

A 'zigzag' Elliott Wave correction follows which internal wave structure?

Answer: 5-3-5

A zigzag correction is structured as 5-3-5, meaning wave A has five sub-waves, wave B has three sub-waves, and wave C has five sub-waves, producing a sharp corrective move.

According to Dow Theory, the 'accumulation phase' of a bull market is characterized by:

Answer: Informed investors buying while the majority are still pessimistic

The accumulation phase is the first stage of a Dow Theory bull market, where far-sighted investors buy depressed assets against the prevailing pessimism of the general public.

In Dow Theory, what does it mean when the primary trend is 'in force'?

Answer: The trend remains intact until a definitive reversal signal is confirmed

Dow Theory holds that a trend remains in force until there is sufficient evidence of a reversal, meaning analysts should not assume a trend has ended without clear confirmation.