A form of technical analysis used to analyze market cycles and predict future market trends developed by accountant Ralph Nelson Elliott in the 1930s. The basis is the assumption that investor psychology can be predicted through using crowd psychology. Though the validity is subject to debate, it posits that there are natural sequences of optimism and pessimism within the market that produce waves. They alternate between an impulsive (or “motive”) phase and a corrective phase on all time scales. Within the theory, motive waves move with the trend and corrective waves move against it.