The concept of cyclical movements of prices is a fundamental theory in finance. It revolves around the idea that certain indicators can be used to predict and confirm price movements. One such theory is the Elliot Wave Theory, first introduced by Ralph Nelson Elliot in 1939. This theory focuses on pattern recognition and suggests that the stock market follows a pattern of five waves up and three waves down to complete a cycle. While some experts apply this theory to daily price changes, it is typically used to analyze longer periods in the market.
