83 - UJ buy with the ABC patternI buy with the ABC pattern
Waiting confirm break out.
TP is 100 = 100% of A leg.
Abcpattern
US Equities in ABC Correction: SPX Starting up 'B' LegLast week's downleg was too deep and overlapping previous waves to be a '4'; the high on 29 Aug at 2916 was therefore the end of a (v); and we are in an ABC down trend.
The pattern is more evident in US 30- see related post. Here Sand P formed a narrow descending chop channel, tightly defined, which appears to have found a bottom around 2864-2870.
Fibo 0.618 for a popup brings us back to 2896, about 20 pts below the high price of 2816. Could it bull higher? Of course, it can always get higher;
John Maynard Keynes: "The market can remain irrational longer than you can remain solvent."
But this is a correction countertrend reaction, not an actionary bullish impulse. 'B' will peter out rather quickly, I imagine. Doubtful whether it will get above the 2916 high.
This is not advice, it's a fun educational post. Good luck.
Will the Downward Momentum Bring New Lows?In this idea we are focusing on the daily time frame and the broader price structure.
First a quick note on the recent drammatic 1000+ point drop from the $7450+ highs. As other traders have mentioned, these markets are extremely dangerous to trade on margin, unless you’re coming in and out for a quick 1-2%. There is just too much risk of a short or long squeeze that is almost guaranteed to trigger your stops, assuming you’ve set them. If you can avoid trading these markets on margin you have much more ability to weather the volatile whale stop-hunting price storms. There were so many bull move fake-outs promising to break $7.5k that if you didn't have your short stops triggered, count yourself among the lucky (or crazy) ones.
Several patterns have emerged on the broader time scale, including local highs that touch the sweeping green arc as it approaches the long-term trend line. What’s interesting about this arc is that we can actually call it a Fibonacci arc, as each subsequent high retraces to almost exactly 0.618 the previous high, and touches a point precisely on this arc.
There is also a strong upper resistance line in yellow that the recent bull wave nearly touched and then retreated from.
One of the difficulties in tracking the recent bull wave was the lack of an obvious ABC correction in the previous bear wave. Was the recent bull wave a bull-trap B wave of an ABC correction, or a full-fledged bull impulse wave? It’s still a little unclear, as the previous bear trend had no real counter-correction. But I’ve chosen to label this recent bull wave as the B wave of an ABC correction, since it didn’t reach up to the Fibonacci arc, as previous bull waves did. This B wave is a little larger than previous B waves, but it is still well within the requirements of Elliott Wave ABC corrections, retracing exactly 0.618 of the A wave.
Also, the ABC corrections for each bull wave have C wave extensions of approx. 0.618 across the board. If we extrapolate these patterns, we might expect a C wave extension around the $5850 price region for the next low, the same as the previous low. However, each previous low has either touched or come very close to touching the lower yellow support line, so we might expect the same to happen again. This would mean a lower low around the $5600 price region. Interestingly, this is the first time that three things will intersect:
1. Lower yellow support line
2. Green long-term trend line (extremely strong support)
3. C wave 0.618+ fib. extension of AB wave
Additionally, the time frame for the last cycle, from low to low was 84 days. And if the above targets are correct, then the next low would have a similar duration from the previous low, placing it somewhere around Sept. 15, 2018.
Given these considerations, a target in the mid $5k’s could be expected in the medium term, before we begin the next bull cycle. Though it appears that the bull cycles are getting smaller with each iteration, they will likely continue until we reach some terminal limit and a final breakout above the green Fibonacci arc occurs. A break-out to the downside seems too unlikely.
Target: $5.4k-$5.6k
US 30 Wave 5 Possible PathwayAfter a shallow brief wave 4 now in progress expect higher again for a week or ten days.
Wave could carry Dow back to Jan high or perhaps a bit shy. Should get within 2 percent.
By early to mid-September we could see Dow reach a new alltime high, although it has lagged Sand P and Nasdaq is a real bubble.
Market was forming a smallish wave 4 when the Donald dropped his tweetbomb Thursday, yay for the Donster. Thanks buddy!
I shorted puts literally ten minutes before the tweet, ZOMG! Nonetheless, it is a shallow wave 4, as wave 2 was pretty hard and deeper grind. Final wave is a 5th of 5th, so expect more intense bullish greed. Chart may not be scaled as I notice 5th wave projection appears a little tall, as wave 3 is never the shortest. We will see. I drew the Gartley to peak on Standard R2 Pivot, maybe that's too high, who knows?!
As I write this post, futures already shaping up to turn bullish, Nas in the green again. In another post I discussed why Dow is lagging- it has to do with the index calculus.
Sand P index accounts for shares outstanding and market cap is periodically adjusted. Dow is calculated based on shares outstanding, so as corporate repurchases decrease shares in market, price and earnings are inflated but multiplier is diminshed as #shares is less. 19th century math, go figure!
So maybe US 30 will not get to 26616 again, as it has shrunk significantly (almost 6% after buybacks this year). Fibo for the Gartley is ~26268, we will see.
As the rally rolls into final phase RUT will reach into 1740+ zone maybe up to 1750+; we saw 1740 this week briefly before the Great Tweet.
This is a breakout pattern from the bear flag and it is parabolic in the other indexes; although Grand Dame Dow has lagged.
Rut should falter before the other indexes. Nas is a bubble and when it pops will deflate with shocking speed, flight to quality may prop up the Dow briefly.
The decline will likely be a full zigzag back to the neighborhood of strong support at 23530. Might not break that far down, depends on sentiment and fear.
A flat correction results in the final leg reaching comparable level to the primary wave, which shed 3300 points off Dow in Feb. It will be a roller coaster.
As always this is humorous speculative guesswork and in no way constitutes any kind of investment advice- gamble on stocks at your own risk, good luck!
US 30 IN ABC CORRECTION MINOR WAVE OF LARGER ZIGZAGUS 30 traded below Tuesday high of 25888, closing 98 points lower than 8/21 high, failing to confirm Sand P new alltime high on 8/24.
The zig-zag pattern is evident on chart. I marked this one as a more complex ABC structure as a 5 wave reaction (ABCDE) is evident in A wave.
Combined with bearish Gartley pattern confirmed 8/21, this latest rally attempt looks more like a B reactionary wave. Expect lower soon.
I wondered about this as puts I bought 8/21 above 25800 were still trading near my purchase price on 8/24, in spite of wild bullishness in Sand P, which was nice, but made me think;
"Hey why is Dow not keeping up and acts like stuck at 25800? Hmmm..."
This is a bear flag, resolving into final C wave soon. Will be pretty rough I'm afraid- be careful!
September is coming! Look out.
Good luck!
This is not investment advice it's just a fun post for education and ridicule. Enjoy!
SPX in possible WXY correction reaching new closing high on 'X'Folks,
We got blindsided by a surprise bull run Friday 8/24 which seemed so unlikely I was horrified and amazed all at once.
In retrospect, some sort of rally was to be expected off the Thursday low prices, and I hedged my bets in case, but this was quite bullish indeed.
In spite of making a new high closing price on Sand P, US 30 did not confirm the high today, closing 98 points below its Tuesday high of 25888.
So what it appears we have is a vigorous reactionary countertrend wave 'B' or 'X', better, since this corrective minor wave lacks ABC complexity.
We have seen all the usual candles tokening corrections; shooting stars, pin bars, engulfing bears, etc. These signals all indicate index is at or near high.
What can we expect? Perhaps a tad higher intraday and another shooting star Monday, then lower again. It is a zigzag within a zigzag inside a larger zigzag.
Just another bull trap, I reckon. Good luck!
As always, this is not investment advice, it's purely for education and your amusement.
US 30 Rejected from Channel Trendline; in-day H&S, Shooting StarExpect gap down and significantly lower based on very bearish futures in PM. C wave beginning- soon. It might be very strong b/c it's a combo of primary ABC from Feb cycle and an intermediate ABC coming off the June swoon, both waves terminating at this juncture. Possible low target zone 23531 at Nov/Dec 2017 support. Good luck!
As always, this is not investment advice and all comments are only intended for education and amusement. Good luck!
US 30 Trendline Test Rejection: Imminent ThrowoverCompare/contrast to 11/12 June top and throwover. Bearish engulfing candle. Shooting stars. On intraday we saw hanging man twice, and shooting star in SPX 8/.21.
Expect imminent throwover to entry on wave C of ABC ZigZag correction pattern within days, after reaching all-time high on SPX 8/21, US 30 25888 at Fibo 0.786 from Jan 26 high. Target 23531.
Possibly one more rally attempt to trendline on 8/23, then swoon; or just start lower back down into Bear Flag channel now.
As always, this is not investment advice and all comments are only intended for education and amusement. Good luck!
US 30 Bearish Gartley Formation near complete: Bear Flag ChannelTraders, my bearish colleagues have persuaded me to take a second look at this channel flag. What I found is beary scary.
For months now US 30 have been in correction charting a rising channel. My alternate Elliott wave analysis suggests this is an ABC large-scale correction and the Bear Flag is a long, strong B wave, nearing completion in August. For the bullish hypothesis see link to my prior post below. Since discovering the Gartley, I'm a lot less bullish today...
Latest moves after twin flash crash with notable bearish divergence (higher highs vs lower lows) show a strong bullish move to test top of channel, but the 0.382 Fibo retracement on this week's WXY correction strongly suggests that the correction is not over and we may be due for an even stronger down wave to backfill all the gaps. Thisi sfurther supported by appearance of a rising wedge within the channel (on chart), converging at critical pivot.
Elliott wave charting is notoriously tricky and subjective, it depends entirely on who counts, and how the waves are labeled, and is not always clear. It is a powerful tool but you have got to get the counts right, relooking at that now and will publish a post dedicated to EW. I now wonder if we're in a giant ABC and the (V)(5) completed in January.
Therefore I urge extreme caution in taking any position in this market, either long or short, as we are likely due for consolidative whipsawing, at least, and possibly a real bad surprise coming in Sep/Oct.
Please compare the Gartley in my chart above with Bitcoin- virtually identical pattern and XABCD ratios- if Dow reaches 25917 it's a perfect Fibonacci 0.786 from January (Credit to Steffro for a post "Is Dow Jones About to Go Down? on 30 July):
A double top formation could signal the second bearish down move on the flagpole. The pole is 'A' wave of an ABC Elliott wave, with C leg nearly equal in depth to A. A = -3270; so C could go as low as 22650, but there is Strong Support (Marked SS4 in chart) at 23400 reaching back to Nov 2017.
I have posted a bullish alternative model which may still be possible, but I'm starting to worry that analysis may be based on erroneous wave counts, and I did not look far back enough to spot the Gartley but felt that I was missing something so dug deeper and found this rather alarming relationship.
The appearance of a bearish Gartley pattern in a Bear Flag Channel combined with an exhaustion gap of +300 and price divergence (see The_Unwind post on this) with higher highs following lower lows all point at a sharp selloff in September/October (the usual time of year for it).
I also noted that media keeps calling this "the longest correction on record" when in fact it may well be the beginning of a secular bear market following the longest bull run on record.
The parabolic rise in Jan followed by a second, lower top in August at 0.786 Fibo may be the harbinger of a real bear. I will be watching for the pivots and signals. Good luck!
A virtually identical Bear Flag example with bearish termination, even down to the exhaustion gap up detail marking the last wave up in channel:
www.google.com
As always, this is not investment advice and all comments are only intended for education and amusement. Good luck!
GBPUSD (Cypher Pattern and Bat Pattern) -1h Chart=Confirmations for Cypher Pattern:
- A to B must touch 0.382 but cannot exceed 0.618
- B to C must touch 1.272 but cannot close below 1.414 (Trend-Based Fib Extension)
- C to D must touch 0.786 - 0.886 of X to C
- First TP at 0.618 of D to C (Fibonacci)
- Second TP at 0.382 of D to C (Fibonacci)
Bat Pattern confirmations:
- A-B must touch 0.5, but cannot touch 0.618
- B-C must touch 0.618, but cannot exceed A (FIbo A-B) or just keep an eye on that 0.236
- D completion at 0.886 (Fibo X-A)
- take profits at 0.382 and 0.618 (Fibo A-D)
- third TP would be long term back to where it all started
Good Trading. - 1h Chart
USDCAD (Bat Pattern and other Chart Patterns) - 4h ChartBat Pattern confirmations:
- A-B must touch 0.5, but cannot touch 0.618
- B-C must touch 0.618, but cannot exceed A (FIbo A-B) or just keep an eye on that 0.236
- D completion at 0.886 (Fibo X-A)
- take profits at 0.382 and 0.618 (Fibo A-D)
- third TP would be long term back to where it all started
We can see inside left leg there was several harmonic patterns been completed on a bullish movement until it made a double top at point A (Bat) for bearish initiation.
At this point a major consolidation was formed with an ABC structure, I measured bearish impulse by placing 0.236 below consolidation, where point B is and got major retracement 0.786 as a higher high at point C, by this point price has been bearish since it reached 0.786. I expect to sell from 0.236 to -0.27 near Bat Pattern completion.
Good Trading. - 4h Chart
CHFJPY (Harmonic Patterns and Wave Analysis) - 1h ChartFirst ABC formation was completed at left side leaving a strong support for bullish initiation. (First Elliot Impulse) confirmations:
- 5 clear points
- 0 to 1 same distance as 4 to 5
- on this case 1 and 4 overlaped, because of volatility on this pair (shouldn't overlap)
- consolidation after 5 completion (Cypher with ABCs on this case)
We can see a minor Cypher Pattern been formed between 4 to 5, which was completed thanks to another ABC formation leaving a strong support for bullish continuation.
Second Elliott Impulse was formed after ABC formation. confirmations:
- 5 clear points
- 0 to 1 same distance as 4 to 5
- 1 and 4 dont overlap
- type of consolidation after 5 completion (on this case got a bearish ABCD formation)
After Ending Channel was completed I measured the entire impulse for 0.786 - 0.886 area, that's the area where Ending Diagonal's and Ending Channel's are completed, the diffrence is that an ending channel has to much consolidation and an Ending Diagonal gives you 5 clear points.
After Elliott Impulse was completed we got a bearish ABCD formation, I measured bearish impulse with Trend-Based Fib Extension for 1.272 - 1.414 area where ABCD was completed for bullish impulse, at this point I saw another Cypher Pattern been completed by respecting each retracements
Confirmations for Cypher Pattern:
- A to B must touch 0.382 but cannot exceed 0.618
- B to C must touch 1.272 but cannot close below 1.414 (Trend-Based Fib Extension)
- C to D must touch 0.786 - 0.886 of X to C
- First TP at 0.618 of D to C (Fibonacci)
- Second TP at 0.382 of D to C (Fibonacci)
We can see an ABCD formation and another Elliott Impulse been completed inside this Cypher Pattern.
At this point I expect price to be bearish for Ending Channel completion.
Good Trading. -1h Chart
SPY Ending diag or Leading diag?SPY looks to be putting in the W5 of this diag,is it leading and we will continue to new ATHs or is it an ending diag to complete a complex B wave and we get an impusive C wave down to complete the ABC correction. as you can see algos were defending the .50 in W4 giving us a target for W5 at the -.236, which also will possibly fill the gap from the start of the A wave. Taking into consideration the length of time this correction has been relatively short compared to the bull run we just experienced. Failure to fill the gap is a sign of weakness and increases the probability we will see a C wave down. Buckle up and hold on to your hats this is going to be a fun ride.
look for large block trades coming in on the VXX, which I did see a couple very large ones at the end of last week. This is something to watch very closely
USD/CHF UpdateI hope you caught that buy... Now the question is, did we complete a combo pattern "B" wave? If so, one heck of a trade in a "C" wave. So Far, this correction has played out beautifully as one to trade, ever since the breakout of the choppy channel labeled "A". Should have caught the sell from breaking the high, sorry, been busy with other stuff. Just be careful, wave wise it does still have the potential to produce a running flat or triangle, but I will be looking for sell setups for my "C" scenario until something changes. I would prefer to see it test that zone again though. That last wave seems a little suspicious to me to spike up again.
Gold - XAUUSD (Harmonic Patterns and Wave Analysis) - 1h ChartConfirmations for Cypher Pattern:
- A to B must touch 0.382 but cannot exceed 0.618
- B to C must touch 1.272 but cannot close below 1.414 (Trend-Based Fib Extension)
- C to D must touch 0.786 of X to C
- First TP at 0.618 of D to C (Fibonacci)
- Second TP at 0.382 of D to C (Fibonacci)
- Third TP back to point C
Between A to B we can see a minor 2618 trade been completed with some confirmations:
2618 confirmations:
- Double floor
- Measure impulse
- Retracement at 0.618
- TP at -0.27
Double Floor + 0.618 = 2618
At 50% between C to D we can see a major consolidation with minor harmonic patterns been completed within, first there was a shark pattern with a bullish impulse and began gartley formation for bullish continuation towards D completion of the Cypher Pattern.
After Cypher Pattern was completed bearish impulse began with an Ending Diagonal been formed
- 5 clear points
- 1 and 4 overlap
- Clear consolidations between each point
0 to 1:
First I measured minor pullback by placing 0.236 below consolidation, got 0.5 as higher high of that pullback and went straight towards -0.618 for perfect support.
1 to 3:
Afterwards major pullback retraced back to 0.236 making previous lower low a new higher high, got that good consolidation at top for bearish continuation towards point 3
3 to 5:
Between 3 to 4 we have and ABC pattern retracing exactly to -0.618 making previous lower low a new higher high for Ending Diagonal completion.
I measured 2 to 3 impulse with Trend-Based Fib extension and got 1.272 exactly at point 5 where it left a wick, plus got -1.618 from minor pullback as support near 1.272.
At this point I expect some type of consolidation or retest at point 5 for bullish impulse towards 0.786 - 0.886 area.
Good Trading. - 1h Chart
INVERSE HEAD AND SHOULDERS ON D1 - ABC to the NECKLINE above 200It appears we have hit the bottom of the right inverse triangle as we completed a WAVE 5, which then should follow an ABC correction heading up to the NECKLINE above 200.
AUDUSD (Cypher Pattern) - 4h ChartConfirmations for Cypher Pattern:
- A to B must touch 0.382 but cannot exceed 0.618
- B to C must touch 1.272 but cannot close below 1.414 (Trend-Based Fib Extension)
- C to D must touch 0.786 of X to C
- First TP at 0.618 of D to C (Fibonacci)
- Second TP at 0.382 of D to C (Fibonacci)
Price still has to reach 0.786 for D completion and I'll be looking to buy at that area.
Good Trading.
Nice 2 to 3 line break... (AUD/USD) Very nice break of the 2 to 3 line as well as respecting the daily trend-line to the downside. We could very well test previous lows and break and continue downward to next area of support. Always remember the trend is your friend and to wait for a pullback to get in , usually another 2 to 3 line break on the lower time-frames targeting the major levels. Enjoy the ride if you're already in :) Cheers!!!
USDSEK HIts new YTD HighsSEK weakness continues to reign , previously we saw a potential double bottom (DB) form with the February low (pattern later confirmed with a break of the neckline in April) and had further reason to be convinced of the reversal with an A-B-C reversal pattern forming off the same Feb low.
After reaching a YTD high of 8.9159 we saw a ner retest of the DB neckline but have now advanced to a YTD high of 8.96 and threatening a test of pysch level 9.00 as well as the pivot support from April 2017 at 9.10. IF we see price advance above these milestones then the next target is the 2016 high at 9.44.
Traders should look to get tactically long either on breakouts or pullbacks to prior pivots. Be wary of entering on overstretched bars, we may see a short term advance followed by a pullback to 9.00, an entry could then be taken from the next close at a new high
Good luck
Filtering Out The Noise: A Broad Picture?It has been quite a challenge making sense of the price movements in this market, with continuous short and long squeezes appearing from out of nowhere.
In this view, we overlay Elliott Waves on the major price movements on the 4h chart. There are some clear wave counts, though the more common wave length ratios are somewhat shortened. In particular, the anti-corrective B wave, which is typically quite a large bull trap, seems to have been checked to be quite shallow, intent as the market was to correct lower, quicker. Also, the typical 1.618 fib. ratios of 3rd waves are somewhat shortened as well.
Some things to note: price has just moved below one of the long-term trend lines which is the 1st line of major support that has been broken. Also, a large bullish bear wedge has formed at the end of wave 1, which should contribute to realizing wave 2.
Wave 3 is aligned with the second important support level corresponding to a previous support level of the "Great Correction" from $20k to $6k, specifically $6425.
The 3rd level of support is the low of the Great Correction corresponding to $6k.
The 4th level of support corresponds to a support zone prior to the Great Correction at $5400.
And finally, the broad long-term trend line corresponds to the final major level of support. This is a hard support, and corresponds to the $5k price territory.
As mentioned previously, a large bullish wedge has formed at what appears to be the end of wave 1. The RSI also shows clear price divergence on two separate occassions. This strongly suggests a temporary reversal is imminent.
That said, with the blatant price manipulation that is rampant in this market at present, almost anything is possible. But I do think that the manipulators only exaggerate natural market trends in order to further capitalize from them and milk them for all they're worth. It would be too costly, even for deep pockets, to go against the market outright, except for very short-term squeezes and head-fakes.
Target: $5k-$6.4k
XAUUSD (Bullish Impulse) - Daily 0-1 There was a Cypher Pattern, which gave us point 1 completion at -0.618.
1-2 ABC Pattern was formed.
2-3 Bullish impulse from ABCs and X-A of Gartley Pattern.
3-4 Type of ABCD formation that gave us D completion of Gartley Pattern exactly at 0.786.
4 to 5
I expect Channel to be completed by reaching point 5 at top.
I measured bullish Flag by placing 0.236 at top of consolidation and got 0.618 as perfect support for the entire consolidation, -0.27 - 1.618 area would be take profit (1.618 from Trend-Based Fib Extension).
MACD shows Flag much easier with an ABC structure for our bullish impulse.
Good Trading - Daily Chart
