When Wave 3 Extends to 3.618×

✅ What It Means
• Wave 3 has extended to 3.618× the length of Wave 1, which is a very strong impulsive wave.
• This often indicates high momentum and strong underlying trend (usually confirmed with high volume).
• It’s a classic sign of an extended wave structure — common in high-volatility, trend-driven markets.

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🔄 Wave 4 Retracement Behavior

In such cases, Wave 4 tends to be shallow, both in price and time. Here’s what we know:

🔍 Typical Wave 4 Retracement When Wave 3 = 3.618 × Wave 1:

Type
Typical Behavior
Depth (Fibonacci)
0.236 to 0.382 of Wave 3
Time
Often longer than Wave 2
Form
Often sideways: triangle, flat
Probability of Deep Retrace
Low (< 25%)


So when Wave 3 is extended, Wave 4 usually does not retrace deeply.

📊 Historical/Educated Probability Estimate
Event
Probability
Wave 3 extends to 3.618× Wave 1
~10–15% of impulsive wave cases
Wave 4 retraces shallowly (0.236–0.382)
~70–80% in extended Wave 3
Wave 4 retraces deeply (>0.5)
~10–15% (rare, usually corrective failure)

So:
🧠 If Wave 3 is extended (3.618×), there is ~70–80% chance that Wave 4 will be shallow and not violate Wave 1 top.

📌 Summary
• ✅ Wave 3 extended to 3.618× implies strong trend
• ✅ Wave 4 likely shallow (0.236–0.382 retrace)
• ❌ Deep retrace into Wave 1 territory is unlikely unless structure is failing