This theory views the movement of market prices occurring in three categories:
• Primary movements
These are called bull and bear markets. Bull markets are where prices move in an upward manner for several years. Bear markets , on the other hand, are where prices move in a downward manner for several months or a few years.
• Secondary movements
These are up and down movements of stock prices that last for a few months and are called corrections
• Daily movements
These are meaningless random daily fluctuations. These are generally ignored during charting of indices.