# NeoWave Wave Theory by Glenn Neely. Description of conditions a, b, c and d for the seventh rule.

14 min readso, it’s time to consider the last seventh rollback rule.

## Rule 7

For rule 7 to take effect, is necessary, so that the wave m2 moves in the opposite direction with respect to m1 and reaches a length of more than 261,8% amplitudes m1. When measuring the ratios m0 to m1, we select one of the following conditions and assign the structure symbols corresponding to the selected condition to the waves.

### Condition (a). If m0 is less than 100% long m1, then:

### If m2 is a multi-wave and consists of more than three monowaves (or groups of monowaves), then:

1. At the endpoint m1, the notation «:5/:s5», and at the end point of the wave m2 – «x:c3?» if the price extent of the first three monowaves m2 is not more than 61,8% length m1, while the first or second of these monowaves can begin complex correction, developing towards, opposite m1, and representing an x-wave. Alternatively, m1 contains in its center «invisible» The x-wave is either the third wave of a trend or terminal impulse with a failed fifth.

Remind you, what about the basic elliott figures, x-waves, trend and terminal impulses, as well as structural notation I mentioned in the second part of NeoWave theory.

Considering option «invisible» x-waves, center m1 should be circled, to the left of it put the designation «:5?», and right – «:F3?». The completion of a complex correction can be considered confirmed immediately after, how the direction of the graph will change sharply in the opposite direction to the wave m1, and the wavelength of the next wave m2 will be more than 61,8% length m1.

2. If the amplitude of the first three monowaves m2 is more than 61,8% wavelength m1, then m1 can complete the a-wave plane with a complex b-wave or the third wave of the pulse with a failed fifth. In the structure list, add the notation «:F3/:5».

### If m2 is a multi-wave and consists of no more than three monowaves (or groups of monowaves) either is monowave, then:

Regardless of, what price figures does m1 belong to, in this situation, a high probability, that the structure of this wave is described by the notation «:L5», which should be placed at its end point.

If the amplitude of m3 is less than 61,8% wavelength m2, m(-2), in turn, inferior in length to m(-1), and price projections m(-2) and m0 overlap, then m1 may be the endpoint of the terminal impulse. And that means, in the structural list of this wave, add the notation «(:L3)».

First, check the compliance of this market situation with rule 7. Wave m2 moves in the opposite direction with respect to m1 and reaches a length of more than 261,8% amplitudes m1. Hence, rule 7 requirement.

Next, we determine the condition of Rule 7. The chart above shows, that the wave m0 is slightly less than 100% m1, hence, the condition is satisfied (a).

The next step is determined, which part of the condition (a) this structure belongs. Since the wave m2, the beginning and end of which are marked in the chart above with red circles, is a polywave, consisting of three monowaves, the requirements of the second part of the condition are met (a).

The last step is the designation of the structure. In the situation under consideration, the base clause of the condition works (a), according to which, in the vicinity of the end point m1, the notation «:L5».

### Condition (b). If the wave m0 is equal to a length of 100% up to 161,8% (not including extreme value) length m1, then:

### If m3 is multi-wave and consists of more than three monowaves (or groups of monowaves).

1. If the price extent of the first three monowaves m3 is not more than 61,8% length m2, the first or second of these monowaves can begin a complex correction, developing in the direction m1 and representing an x-wave. Alternatively, this may also mean, what’s in the center of m2 «invisible» wave b or m2 is the third wave of a trend or terminal impulse with a failed fifth. And that means, the endpoint m1 should be denoted «:F3/:c3/:L3/:L5».

Wherein:

- If to achieve a value greater than 61,8% amplitude m2 took more than five monowaves, then the designation should be removed from the structure list «:F3» and, respectively, no longer consider the third scenario/failed fifth.
- Considering option «invisible» x-waves, circle the center of the m2 wave, to the right of it put the notation «b:F3/x:c3?», and left – «:5?».
- The option to complete a complex correction can be considered confirmed after, how the direction of price movement will change sharply to the opposite m1, and the price extent m3 will exceed 61,8% length m2. The completion of a complex correction in this case will occur in the vicinity of the beginning of a sharp trend reversal. To account for these options, the endpoints of the first and second monowaves of the m3 wave should be denoted «x:c3?».

2. If the length of the first three monowaves m3 is more than 61,8% wave amplitudes m2, then m2, most likely, completes the a wave flat with a complex b wave. Alternatively, m2 may complete the third wave of momentum with a failed fifth. At the endpoint m1, to describe both cases, we should add the notation «:F3/:5».

### If m3 is polywave and consists of no more than three monowaves (or groups of monowaves) either is monowave, then:

1. If the price span m3 is 100%–261,8% length m2, then m1 can be part of an expanding triangle. And that means, the endpoint m1 should be denoted «:c3».

Wherein, if the amplitude of m4 is more than 61,8% length m3, the notation should also be added to the structure list «:F3».

2. If the amplitude m1 exceeds 61,8% length m0 is only slightly, amplitude m3, in turn, does not reach 61,8% or exceeds 100% length m2 per time, which is equal to or less than the duration of formation m2, time interval, necessary to achieve m2 price value m0, less than or equal to the duration m0, and the m2 wave develops at a more vertical angle, than m0, then the endpoint m1 should be denoted «:L3/:L5».

3. If the amplitude m3 is at least 61,8% and no more than 100% length m2, then the wave m2, probably, is the final segment of an elongated flat. And that means, add the notation to the structural list m1 «(:c3)».

4. If the level of the starting point m2 (plus one unit of time) achieved in time, not exceeding the duration of the formation of this wave, then m2 may be the final link of the trend impulse. Therefore, at the endpoint m1, the notation «:L5».

but, it is worth adding to the structural list m1 «:sL3», and m2 can complete the terminal pulse with a stretched fifth wave, if all of the conditions below are met:

- Wave m(-1) inferior in length to m0, and m0 is equal to or greater than m(-2) or wave m2.
- Starting Point Level m(-2) is achieved (either intersects) during, comprising not more than half the period of formation of the wave group m(-2)–m2.

First, we check the compliance of the current market situation with the requirement of rule 7. The chart above shows, that m2 wave exceeds 261,8% amplitudes m1. Hence, rule 7 requirement.

The next step is to determine the condition for rule 7. The chart above shows, that the wavelength m0 falls in the range from 100% up to 161,8% wavelength m1, and m3 is a monopole. We can immediately say, that the structure meets the condition (b), his second part.

The last step is the designation of the structure. In our case, paragraph 2 of the second part of the condition seems to be the most relevant (b). The chart above shows, that the amplitude m1 slightly exceeds 61,8% length m0, the m3 amplitude is noticeably less than 61,8% length m2 and reaches its minimum in time, which is equal to or less than the duration of formation m2. At the same time, not all requirements of this clause are fulfilled, namely, a period of time, necessary to achieve m2 price value m0, longer duration m0, and the wave m2 develops at a less vertical angle compared to m0. but, Nili admits some conditions not being met. It’s important to understand, that the exact position of the investigated monowave can be established during the study of neighboring monowaves. Now, at the endpoint m1, the notation «:L3/:L5».

### Condition (c). If the wavelength m0 is equal to 161,8% up to 261,8% (inclusive) wavelength m1, then:

1. If the temporal plane of the wave m1 is not less than the wavelength m0 or m2, then, despite other circumstances, the most relevant designation of the wave m1 will be «:F3».

2. If the price value m0 is reached by the wave m2 over the time period, less than or equal to the duration m0, m2 develops at a more vertical angle and exceeds m0 in length, as well as m(-4) exceeds in length m(-2), then m1, most likely, completes the tapering triangle. Hence, at its end point it is worth putting the notation «:L3».

3. If the price value m0 is reached by the wave m2 over the time period, less than or equal to the duration m0 and m2 develops at a more vertical angle and exceeds m0 in length, as well as the amplitude m(-2) waves is from 161,8% (inclusive) length m0 and not less than 61,8% length m2, and to the structural list m(-1) designation is included «:F3», then m1 may be the final link of the irregular failed flat. And that means, at the endpoint m1 we put the notation «:L5»

4. If the level of the starting point m2 (plus one unit of time) achieved over time, not exceeding the duration of the formation of this wave, and the initial level m(-2) is achieved (either intersects) during the period, amounting to no more than half the development time of the wave group m(-2)–m2, and m0 is longer than m(-2), then m2 may represent the ending segment of the expanding terminal impulse. At the endpoint m1, in this case we put the notation «:sL3».

5. If the level of the starting point is m1 (plus one unit of time) achieved in time, not exceeding the duration of the development of this wave, and the amplitude of m2 is at least 161,8% length m0, and wave m1 crosses the trend line, passing through the endpoints m(-3) and m(-1), then m1 may well be the final segment of mobile correction. And that means, at the endpoint m1 we put the notation «:L5».

First, check the compliance of the current market situation with the criterion of rule 7. The chart above shows, that the m2 wave reaches more than 261,8% amplitudes m1. Hence, rule 7 criteria are met.

Further, define the condition for the seventh rule. The chart above shows, that the wave m0 falls in the interval from 161,8% up to 261,8% wavelength m1 – the condition (with).

Now we define the condition clause relevant to our situation (c). For our case only item 2 is suitable. That is, the price value m0 is reached by the wave m2 (green area on the chart) for a shorter time period compared with the duration of m0 (blue area), m2 develops at a more vertical angle and exceeds m0 in length.

Wave m(-4) (blue area on the chart) exceeds in length m(-2) (green area).

Hence m1, most likely, completes the tapering triangle. And that means, at its end point it is worth putting the notation «:L3».

### Condition (d). If the wave m0 is longer, than 261,8% length m1, then:

1. If the time length is m0 (minus one unit of time) does not exceed wavelength m1 or duration m2 (minus one unit of time) does not exceed the duration m1 and the duration m1 is greater than or equal to the period of wave formation m0 and/or m2, then, most likely, m1 is part of a zigzag or momentum. So in the structure list m1 we add the notation «:F3».

2. The endpoint of wave m1 is denoted as «x:c3» and the wave m1 itself can be an x-wave of a double zigzag or complex correction (which starts with a zigzag), if the following conditions are met:

- The time extent m1 is less than or equal to the duration m0 and/or m2.
- Length m(-2) is at least 161,8% length m(-1).
- Wave m(-1), in turn is inferior in length to m0.
- Amplitude m1 is less than 61,8% distance from the beginning of the wave m(-2) to endpoint m0.
- Wave m3 is longer than m2,
- Wave m4 shorter than m3.
- The market travels to the intersection of the endpoint level m2, not less than 61,8% total wavelength m(-2)–m2.

3. Wave m1 may be the x-wave of complex correction, which starts flat and ends with a flat or triangle, and at the end point m1 is the designation «x:c3», if the following conditions are met:

- The temporal extent of the wave m1 is less than or equal to the wavelength m0 or m2.
- The wavelength m0 is within 100%–161,8% amplitudes m(-1).
- The amplitude of the wave m2 is not more than 161,8% length m0,
- The wavelength m4 is at least 38,2% amplitude m2.
- Wavelength m3 is longer than m2.
- Wavelength m4 less than wavelength m3.

4. If the time length m1 is less than or equal to the duration m0 and/or m2, the endpoint m1 should be denoted «:c3».

but:

- If the price and time lengths of waves m(-1) and m1 are related to each other with a coefficient of 61,8% either approximately equal, m(-1) inferior in length to the wave m0 and as a result of comparing wavelengths m(-2), m0 and m2 the shortest turns out to be m(-2) or m2 and the amplitude of each larger wave from this group does not exceed 161,8% shorter lengths, then m1, most likely, is part of a complex double zigzag, in which one or two x-waves are present. And that means, before designation «:c3» should add «x».

Wherein:

- If the longest wave of the aforementioned wave group is m(-2) or m2, chances are, that the x-wave will be located in the vicinity of the end of m1. But if there are other notations in the structural list m1, Besides «:c3», x-wave may be in the vicinity of the endpoint m(-1) or m(-3).
- If the longest wave of the three mentioned is m0, x-wave may be «invisible» and located in the center of m0. In this case, you need to circle the center of the wave m0, to the right of it put the notation «x:c3?», and left – «:s5». Probably, Elliott price chart starts with m(-2) and ends m2.
- If the wave group m(-2)–m2 is a complex correction with «missing» x-wave, then before the formation of the next group of waves of this order, as this complex correction, market, In most cases, runs from 61,8% up to 100% price distance of this group. If the wave following the x-wave of complex correction does not reach 61,8% its amplitudes, after which the level of the endpoint of the complex correction intersects, then two options are possible. Or wave group m(-2)–m2 does not actually form a complex correction or the complex correction in question is part of a terminal impulse.

5. Wave m1 may be the final segment of the mobile correction, and the designation should be placed at its endpoint «:L5», if the following conditions are met:

- Starting point level m1 (plus one unit of time) achieved over time, not exceeding the duration of the formation of this wave, price and time lengths of waves m(-1).
- Waves m1 are the same or correlate with each other with a coefficient of 61,8%.
- The wave amplitude m2 is less than 161,8% amplitudes m0
- Price projections of waves m1 and m(-1) don’t overlap
- The initial level m2 is reached over a time period equal to or greater than the duration of this wave.

but, if the amplitude is m(-2) does not reach 161,8% length m0 and price span m3 is less than 61,8% length m2, and in the structural list m1 there is a notation «:L5», then m1, probably, completes several Elliott figures of varying difficulty.

6. If the amplitude of m3 is less than 61,8% amplitude m2, and m2, in turn, exceeds in length and develops more «upright», than m0, amplitude m(-1) is no more than 161,8% length m0, the price projections of the waves m(-1) and m1 overlap, and also in the structural list m0 contains at least one of the notation «:3», there is little chance, that m1 is a finite segment of a tapering triangle. At its endpoint we put the notation «(:L3)».

but, if the price and time lengths of waves m(-1) and m1 are the same or correlate with each other with a coefficient of 61,8% and the price projections of these waves do not overlap, then m1 may well be the final link of an irregular plane or plane with a failed c. In this case, in the vicinity of the end point of this wave, the notation «:L5».

7. If the price amplitude m3 is less than 61,8% length m2 and amplitude m2 is within 61,8%–161,8% lengths m0 and m(-1) inferior in length to m0, as well as the amplitude m(-1) is no more than 161,8% length m0, then m1, most likely, is an x-wave in complex correction. At the endpoint m1 we put the notation «x:c3».

8. Wave m2, probably, completes the terminal price figure, and at the end point of the wave m1 we put the notation «(:sL3)», if the following conditions are met:

- Starting Point Level m2 (plus one unit of time) achieved over time, not exceeding the duration of the formation of this wave.
- Amplitude m4 does not exceed 61,8% length m3.
- Wavelength m(-1) inferior in length to m0.
- Price projections m(-1) and m1 overlap at least partially.
- Wave m0 is equal to or greater than m(-2) and/or m2.
- Wave m3 reaches the level of the initial point m(-2) or even crosses it in time, not exceeding half the period of formation of the wave group m(-2)–m2.

To start, check the compliance of this market situation with the criterion of rule 7. The chart above shows, that m2 wave is greater than 261,8% wave amplitudes m1. Hence, rule 7 criteria are met.

The next step is to determine the condition of the rule. Wave m0 is over 261,8% wavelength m1. Condition is met (d).

The last step is to define the structure. The chart above shows, that only the first part of clause 4 of the condition is fulfilled (d). The time extent is much less than m1 or equal to the duration of m0 and m2. Hence, the endpoint m1 should be denoted «:c3».

In the process of researching the graph, Having determined the terms and conditions for the current wave, study the next, then follow the same procedures for all important, in your opinion, waves graphics.