Similar to the corrective A-B-C wave 2, the corrective A-B-C wave 4 can also exhibit a flat structure in which A and C end at pretty much the same level and the B wave ends near the same region where A begins.
It is absolutely possible for the B-wave low to be slightly lower than where the A wave up begins.
In the 4th wave position, it is common/possible for one to confuse the B-wave low as the final 5th wave — when in actuality, the 4th wave has not yet finished, as there remains a C-wave of that 4th wave before the actual 5th wave down that exceeds the low of the B-wave.
Given that we already experienced a downward 3rd-wave move down — if we then experience the following:
A significant (often unexpected) bounce
Followed by a steady, but persistent drop of several red candles that potentially exceeds the beginning of that bounce
Followed by a potentially zigzag pattern back up that gets near the top of Wave A, perhaps in a short spike — but does not necessarily exceed it—and then quickly reverses as the start of the 5th wave down
…then, that typically is a Wave 4 corrective A-B-C pattern
If we then see strong downside movement — then we should be beginning the wave 5 down.
Wave 4 corrective A-B-C’s, like the wave 2 versions, can take the form of a FLAT. Oftentimes, the size of these A-B-C of the wave 4 should be noticeably larger in size than the size of any corresponding wave 2 A-B-C flat.
Real-Life Examples of the Corrective A-B-C Wave 4’s:
1) January 8, 2016 – big drop followed by A-B-C Corrective Wave 4, before further 5th wave drop
On the daily chart (zoomed out) – it’s that upper whisker on that last red candle on the right in the January 2016 region — that was the attempt up in the c of the 4th wave up before 5th wave down.
Near the bottom right between pink labels 3 and 4 — we can see an a-b-c that shows the 4th wave a-b-c corrective flat. Notice that the bottom of b is lower than where 3 is and that the top of c is close to the top of a, but does not necessarily exceed it. What follows next is the 5th wave down, which in this case drops below 1900 towards 1893 before a bounce.
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