Introduction by Charles J. Collins

Publishers Note For The 20th Anniversary Edition

Elliot Wave Principle came out in November 1978, with the Dow at 790. While reviewers immediately regarded it as the definitive textbook on the Wave Principle, it handily missed the best seller list by several hundred thousand copies. Nevertheless, due to the spiralling interest in the book’s fascinating content and the success of its long range forecast, it has sold more copies every year, achieving the status of a Wall Street classic. Like the Wave Principle itself, this book has stood the test of time.

What’s more, Elliott Wave Principle has gotten better as it has evolved. The book fulfils it’s purpose as an academic text more satisfactorily with each new edition, as Robert Prechter has meticulously refined, enhanced and expanded it through the years. This effort has borne fruit. In the 1970s, A.J. Frost had often recounted Hamilton Bolton’s observation in the 1960s that for every 100 people who know Dow Theory, only on has ever even heard of Elliott. In the summer of 1986, Frost called Prechter to say, the tables are finally turning.

Until a few years ago, the idea that market movements are self-similarly patterned was highly controversial, but recent scientific discoveries have established that self-similar pattern formation is a fundamental characteristic of complex systems, which include financial markets. Some such systems undergo punctuated growth, that is, periods of growth alternating with phas3es of non-growth or decline, building into similar patterns of increasing size. Nature is replete with such fractals, and as we demonstrated in this book twenty years ago, and as R.N. Elliott revealed some sixty years ago, the stock market is no exception.