P1: PIC/b P2: c/d QC: e/f T1: g
c07 JWBK195-Saettele June 5, 2008 19:52 Printer: Yet to come
Explanation of Elliott Wave and Fibonacci 177
Additionally, “the theory of the spiraling Wave Principle suggests that
there exist waves of larger degree...Perhaps Homo sapiens himself is one
stage in the development of hominids, which in turn are one stage in
the development of even larger waves in the progress of life on Earth.”
13
The stock market is the best barometer that we have to measure human
progress, and it is interesting to look at it within the perspective of very
long term waves. For example, the creation of the U.S. stock market in 1792
with the Buttonwood Agreement may have been the beginning of wave 5 of
Grand Supercycle degree. Wave 5 of Grand Supercycle degree divides into
five waves of Supercycle degree, and so on. As mentioned, the stock mar-
ket is always in one of the five waves at the largest degree of trend, which
then subdivides into smaller degrees of trend. Waves in currencies are not
as intuitive though.
Currencies have only been freely traded since the early 1970s, so the
largest degree visible on charts is Cycle. There is a much more impor-
tant distinction between counting long-term waves in the stock market and
currencies. The theory of the spiraling wave principle (see Figure 7.27) in
1978/1999 Robert R. Prechter
FIGURE 7.27 Spiraling Wave
Source: Courtesy of Elliott Wave International, Inc.