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Corrective wave (the A-B-C)

The three-wave move that gives part of an advance back — labelled A, B and C, and the half of Elliott’s method with far softer rules than the five-wave leg it corrects.

After a five-wave advance comes a correction, and in the simplest and most common form it has three legs rather than five: A away from the high, B a partial recovery, C away again. The same three-leg shape appears as wave 2 and wave 4 INSIDE an impulse, which is why a pullback and a full correction are described with the same vocabulary — the difference is what the three legs are working against, not how they are built. Corrections are where practitioners disagree most: the textbooks list zigzags, flats, expanded flats, triangles and combinations, and telling them apart usually requires labelling smaller waves inside each leg.

stocks-llm deliberately does much less than that. It models the plain three-leg case at one wave degree and nothing nested, so an expanded flat or a triangle is not something it can name. One hard test does apply: wave B may not retrace more than the whole of wave A. A "B" that carries price beyond where A began is not a correction of A at all — it is a new leg of some larger structure — and without that gate the tail end of every valid five-wave advance would re-read as an A and a B, since the last three turns of an advance are a down leg followed by an up leg and nothing else would forbid it. A bounce of less than about a quarter of A is excluded from the other end, as noise inside A rather than a wave of its own. C is then scored against A the way wave 5 is scored against wave 1, most often landing between roughly 0.6 and 1.6 times its length.

One property of how this is arbitrated is worth knowing when reading a page. Where the same two legs can be read either as the start of a five-wave advance or as an A and a B, stocks-llm’s ranking prefers the impulse — so a correction-in-progress essentially never becomes the headline count, even though the reading survives. Both readings are shown rather than the loser being discarded, which is why a company can appear on the A-B-C screen while its own page leads with an impulse label: two labellings survive the same bars, and presenting only one would be the site quietly overruling its own arithmetic. A correction is a description of legs already travelled, never a forecast that the next one arrives, and nothing here is advice.

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A-B-C corrections in their completion zone →

Related terms

  • The Elliott wave principle — A way of describing a share’s path as a repeating sequence of five waves with the trend and three against it — and the most subjective thing in this glossary, which is why stocks-llm publishes a candidate labelling with the price that would kill it rather than "the" count.
  • Impulse wave (the five-wave move) — The five-wave leg that runs with the trend — and the only part of Elliott’s method with hard rules, three of them, which is what makes a candidate count checkable rather than a matter of opinion.
  • Wave invalidation level — The price at which an Elliott labelling is simply wrong — not a stop-loss and not a target, but the level whose breach means the count has to be thrown away and started again.
  • ZigZag pivots (swing highs and lows) — The turning points a chart is reduced to before any wave can be counted — each one a high or low that stands out from the sessions either side of it, with the small wiggles filtered away.

See more terms in the stocks-llm glossary.

Informational only — NOT financial advice. This is an educational definition, not a recommendation to buy or sell anything. Metrics on stocks-llm are delayed data and may be missing or stale. Always verify information independently and consult a qualified financial professional before making any investment decision.

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Informational only — NOT financial advice.

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