Note that, in the first example, we have five Motive Waves: three in the upward move (1, 3, and 5), plus two in the downward move (A and C). Simply put, any move that is in accordance with the major trend may be considered a Motive Wave. This means that 2, 4, and B are the three Corrective Waves.
But according to Elliott, financial markets create patterns of a fractal nature. So, if we zoom out to longer timeframes, the movement from 1 to 5 can also be considered a single Motive Wave (i), while the A-B-C move may represent a single Corrective Wave (ii).
Also, if we zoom in to lower timeframes, a single Motive Wave (such as 3) can be further divided into five smaller waves, as illustrated in the next section.
In contrast, an Elliott Wave cycle in a bearish market would look like this:
As defined by Prechter, Motive Waves always move in the same direction as the bigger trend. Elliott called it the Five-Wave Pattern, and he created three rules to describe its formation:
Wave 2 can't retrace more than 100% of the preceding wave 1 move.
Wave 4 can't retrace more than 100% of the preceding wave 3 move.
Among waves 1, 3, and 5, wave 3 can't be the shortest, and is often the longest one. Also, Wave 3 always moves past the end of Wave 1.