THE HAnDBook of TECHniCAl AnAlysis
18.5 Wave Extensions and Truncation
An extended wave is one where it has additional subdivisions and as a conse-
quence will be more elongated. As a rule, wave extensions can only occur in one
of three impulse waves. It occurs most frequently in wave 3 in the equity markets
and in wave 5 in commodity markets. There can also be extensions of extensions
within a wave. See Figure 18.13.
There are instances where wave 5 fails to extend beyond the end of wave 3.
We refer to this failure as a truncation. Truncation can also occur within wave 5
of an ending diagonal triangle. See Figure 18.14.
figure 18.13 Triple 3 Corrective Combinations.
figure 18.14 Wave 5 Truncation.
