The Elliott Wave theory was developed by Ralph Nelson Elliott in the 1930s. He studied 75 years' worth of yearly, monthly, weekly, daily, and self-made hourly and 30-minute charts across various indexes. His theory gained notoriety in 1935 when Elliott made an uncanny prediction of a stock market bottom and has become a staple for thousands of portfolio managers, traders, and private investors.

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Elliott defined rules to identify, predict, and capitalize on wave patterns in books, articles, and letters summarized in R.N. Elliott's Masterworks, published in 1994. Elliott Wave International is the largest independent financial analysis and market forecasting firm whose market analysis and forecasting are based on Elliott’s model.

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