Elliott Wave Theory is a form of financial market's technical analysis that forecasters use to identify trends and extremes in investor psychology. Elliott Wave Theory was developed in the 1930's by Ralph Nelson Elliott, an accountant by trade. His analysis of stock market price movements indicated that prices fluctuate in specific wave like patterns, thus the name "Elliott Wave". He published his works on his book The Wave Principlein (1938) and, in several articles in Financial World magazine. Elliott published his second and most comprehensive work in 1946 in a book called Nature’s Laws – The Secret of the Universe (1946). Elliott theorized that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable." Elliott's work fell into obscurity after the 1950's and his works were revisited in the 1970's by Robert Prechter, whose interpretation gained him notoriety in 1987 for predicting the crash that year.
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