The Wolfe Wave was first introduced to the public in the very popular book Street Smarts by Lawrence A. Connors and Linda Bradford Raschke. It was first published in 1995. In the book the basic architecture of my wave theory was revealed.
Since then I have been successfully teaching a far more advanced course in Wolfe Wave methodology (www.WolfeWave.com). My wave methodology allows a trader to enter and exit the market at pre-determined areas with great accuracy.
On the illustration above, the 1, 2, 3 and 4 points are bullish and bearish waves seeking equilibrium. The 5 point is the culmination of this battle, the tipping point. In this case the bullish wave has won and the price can now be expected to race towards the 1 to 4 Target Line to seek equilibrium.
In some cases the price hits the 1 to 4 Target Line (Estimated Price at Arrival) just as the down sloping 2 to 4 line, and 1 to 3 line, converge to form an apex at an (Estimated Time of Arrival.) (See two examples below.) This is not always the case so I'll leave "perfection" for the dictionary.
A bullish wave on a one-minute chart of the S&P.
A bearish wave on a 15-minute chart of the S&P.