Take a look at this diagram – an idealized chart of the Elliott wave pattern:
That's Elliott wave. (What you see is a bull market pattern. In a bear market, flip this chart upside down).
As complex as Elliott wave analysis may be perceived or made by some of its practitioners, at its core, it's all about "fives and threes:" Five waves in the direction of the trend and thee waves against it. Five steps forward, three steps back, so to speak.
Once you've trained your eye to see this basic pattern in the charts of your favorite market, you're halfway there.
Maybe even more than halfway, actually. Because even experienced Elliotticians first and foremost look for this basic Elliott wave picture. Only then do they proceed to more detailed chart analyses – such as the waves' internal structure, Fibonacci ratios between them, etc.
For example, in tonight's issue (March 24) of his Daily Futures Junctures, editor and Elliott Wave International's Senior Commodities Analyst Jeffrey Kennedy applies this very same, "basic" approach to charts of Live Cattle and Feeder Cattle.
"Prices travel the farthest in the shortest amount of time in waves one, three and five – especially in wave three. Conversely, it takes a long time for prices to travel a short distance in corrective waves two and four," reminds his subscribers Jeffrey.
Then, he proceeds to give you a detailed view of the recent rally in Live Cattle (one from the March low of 89.10) and the internal structure of the similar rally in Feeders.
Jeffrey's conclusion? Both moves look like corrections.
What does this mean for Cattle futures in the next few days? Get Jeffrey's complete analysis and price targets online right now, risk-free – just scroll below to learn how.