Ralph Nelson Elliott was an accountant in the 1920's and 1930's. After becoming ill later in life, while in recovery he became intruiged with the stock market and began to look for identifiable patterns in individual stocks and in the Dow Jones Industrials. His discovery was a theory of market bahavior that is still widely used by many market technicians today.
Elliott's basic theory is that markets move in waves - with five waves in the direction of the main trend (coined 'impulse' waves), and 3 waves against the direction of the trend ('corrective' waves). He went on to explain how even smaller trends in each of the larger waves exhibited the very same characteristics. He published his findings in 1938 in his classic text, "The Wave Principle". He then detailed his work for several years after in several other writings, one of which was the 1946 work, "Nature's Law - The Secret of the Universe", published just two years before his untimely death.
In the years since Elliott's passing, there have been many new discoveries concerning Elliott wave theory, including the application of Fibonacci numbers and technical measures to determine the accuracy of the wave structure, also the price targets that are likely to be achieved in the current wave form. Elliott himself - if he were alive today - might be astonished at the accuracy and degree to which the waves can now be analyzed and projected.
