The first factor is the strong momentum. A bullish or bearish momentum that has not stalled is more likely to continue. The first sign that a bullish momentum is about to stall is when the common sense trend line is broken. It is then confirmed after the price failed to exhibit a new higher high. The opposite is also true in a down trend. It is normal that one is prepared for a correction after counting five waves. Nevertheless, it is a mistake to assume that the trend has ended because one has counted five waves. The fifth of the 5th wave can be extended. Please be ready for it if the momentum has not yet stalled.
The fifth itself can be extended (fifth wave extensions) as the fifth minor wave of the fifth wave (fifth wave extensions of the fifth wave)
The second factor of the fifth minor wave of the 5th wave extensions is the market leaders that continue to rise or decline.
One is always trading first the market SP 500, but the market's engines are market leaders. A bullish financial instrument that is in the fifth wave can benefit from its market leaders that are still gushing up.
The same thing is possible for the 5th bearish wave stocks that are likely to extend as market leaders continue to decline.
The third factor that causes the fifth wave extensions of the 5th wave is the last lap phenomenon. The fifth minor wave of the fifth is the last minor wave. It is similar to the last lap of F1 race.
It is obvious to many waves traders who often gang to trade it. That ganging activity does create a surge in the trading volume. Consequently, that high demand does send the price to the uncharted territory. That is why the fifth wave of the fifth wave is extended.
The fourth reason why there is an extension of the 5th minor wave of the fifth wave is because of the ignorance of some market players.
They are not stupid, but they just lack the knowledge. Those traders and investors love to sell for other justified reasons at the top of bullish trend. So when they are busy doing that, and wave traders spot that the fifth minor wave is being extended, one can rest assured that the 5th minor wave of the 5th wave is more likely to be extended.
The lack of knowledge about how to forecast the markets using the Elliott principle can really put an ordinary investor into a big trouble. It is happening all the time already, but some do not even know. I feel sorry for those, but I am also trying my bit to help them like other Elliott teachers.
The fifth factor that can lead to the fifth wave extensions of the 5th wave is the economic news. A high impact bullish news at the top of the fifth wave can cause the fifth wave extensions that will ultimately generate the 5th wave extensions of the 5th wave.
That news can relate either to the financial instrument, sector or market leaders. It may also be a very bullish monetary policy from a central bank or the Federal reserve.
One must constantly check the economic news that relates to the financial instruments that one is trading.
Take it from me, the economic news are regularly causing Elliott wave extensions. Waves traders can no longer ignore them.