The theory gained a lot of traction as viable in the 70’s as it correctly predicted the strong bull markets then and again in 1987 when it predicted that years market crash.
Elliot wave theory takes a look at a basic five wave structure that must be corrected with as series of three wave moves. The impulse or motive waves, which are the five wave structure, are met by three corrective waves.
According to Elliot’s theory, the market needs to be divided into what are called cycles and supercycles; when you do this the waves are easier to count.
The five impulse moves will always be in the same direction (label them 1-5) and the three counter or corrective waves will always be in the opposite direction (label them a-c). Zig-zags, flats, and triangles tend to form the most common corrective waves. During complex corrections it is not uncommon to see doubles or even triples of these common wave pattern form.