The Running correction is a rare special form of a failure. This pattern is a kind of Flat, with an elongatedB wave and a very small C wave. According to theory wave C should be so short that it doesn’t get to theprice territory of wave A. In our daily analysis we do not accept a C wave that fails to reach the priceterritory of wave A.Instead of a running correction this could in theory be an extension in an impulsive wave, where the wavehas subdivided in two (or more) 1,2 combinations. If the B is a clear three wave, then it is a Runningcorrection, otherwise an extension. In practice there will not be any difference in market direction: in bothscenarios the market will explode in the direction of the B wave, therefore we prefer to label it as anextension. For the sake of correctness we do included this pattern in our daily analysis.
Rules and guidelines
• The B wave must be composed of three waves.• The C wave must be composed of five waves.• Wave C must be very short and normally will not reach the price territory of A.• Wave C must not retrace more than 100% of wave B but more than 60% of wave A.
In which wave
Most of the time it should occur in wave 2 or B.
It is a three-wave structure. The internal structure is 3-3-5.
An X wave is an intermediate wave in a more complex correction. This wave is always corrective and cantake many forms like a Zigzag, Double Zigzag, Flat, Expanded Flat, combination and a triangle.