Last phase of the bear market rally?
Updated
Looking for last rally after latest decline turned into another corrective wave. I am expecting a wave C with 5 waves and the most likely fib levels (time/price) depicted as arrows on the chart. When the rally begins, I am expecting 100% of wave A, which I am estimating to end at May 16 at a price of 115. I am hoping to enter this position below 91.
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Looks like a small triangle setup with a target of 92.30-92.40. This is where I plan to go long. Also, a break of the B line will also be a signal.
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If it does pull a fast one on me, then I imagine it won't got too far down. I'm assuming 89 at the most. I'm pretty confident in this trade, and will become a bagholder if I'm wrong (no stops).Comment
Filled at 92.35.Comment
Imo if the small triagle like structure is broken to the downside, there will probably be continuation. No matter, I'm committed and pretty confident that, by May 16, we will be much higher than 100.Comment
It appears we are still waiting for completion of terminal wave c. I have circled the most likely targets on the chart. Price wise, we have the 78.6% fib level at 90.87 and the 100% fib level at 89.50. For time, we have the 100% fib level at 4/14 @ 15:30 and the 161.8% fib level at 4/19 @ 11:45. So, today is probably going to be a down day. It won't change the eventual target of the predicted rally by much. Good day to buy imo.
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Possible bottom today. A break of the wave c upper trendline could be used for confirmation. Afterwards, I'll be looking for a 5-wave impulse to the upside. Another positive is price appeared to respect the trendline that creates the bottom channel of the large corrective wave.
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I'd hate to call a bottom, but its starting to look like a well developed ending terminal wave with an extended wave 5. Should have stuck with my original measure; must have faith in the fib levels. Once price breaks over the upper trendline of the terminal wave, I'll remeasure the whole structure with the new bottom in order to get estimates on price and time.
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Assuming we've seen the bottom of the most recent corrective wave yesterday, the new time/price estimates are as follows: fib price ext at 61.8% is 102.51, 100% is 112.05, and 161.8% is 129.83. Fib time ext at 61.8% is May 5, 100% is May 18, and 161.8% is June 8. If there is a new low, these estimates would void. I like the 100% levels in price and time.
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Lack of completion for wave B (green), if wave c (yellow) has completed, then price action could be turning into a complex correction, a-b-c-x-a-b-c. With earnings coming up, I would think this would take too long, as I'd expect to see earnings create a wave 3 structure. Another possibility is wave 5 (black) could be turning into a triangle. Looks like we have to wait for it to play out.
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Looks to be confirming an x wave, which will need another a-b-c corrective wave to complete. It looks to be creating a 5-wave structure to finish out black wave c, and I can count 4 waves (wave 4 current ) so on any rally tomorrow would be a short term sell. Looks like the rally won't begin until a few weeks or so.
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No rally today negates a terminal wave c (small black). Have to wait for the count to form. If no (x) wave forms then there shouldn't be downward continuation. We could be in the contracting triangle mentioned 2 posts above. If so, the blue wave (a) low would have to hold. If this is the case, then I'd expect the bottom to be here by April 25. In the case of an (x) wave, then the downtrend may continue to earnings.Comment
Another look at a possible triangle formation. Each leg of a triangle should only require 3 waves. Since I couldn't count 5 waves, I am leaning more towards this type of setup. This would be the most ideal situation because it would mean completion of the larger wave B is probably right around the corner. Continuation to the downside means an x wave has formed, which I can't count with any certainty, and the rally won't begin until earnings.
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This count seems to make the most sense to me right now. This current down move looks very much like an impulse. A move to 84 should make completion. Any further down and it starts to violate the whole corrective structure.
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Price should be near completion for this impulse move. I'm suspecting that, if we don't get a full blown recovery today, then we will close very near the open. According to the impulse rules, wave 5 shouldn't be able to move under 85 or it will make wave 3 the shortest wave. Also, the measurement of the second a-b-c correction equals 85.33.
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Awfully close.
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Remeasure. Fib ext: 100% = 106.29 and 161.8% = 123.15
Fib time: 100% = May 30 @ 9:30am
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Verdict is still out for this one. To prove we have experienced a trend change, then we need to blast through 87.35 with a near term target of 91-ish. Below 85.11, it will look less likely. Can only spot 3 waves in the push up in the morning. It could be possible there's a missing wave as a result of the abrupt change in price direction.
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Bummer. No completion. Looks to be developing into a triple combination. Hopefully it ends with a triangle instead of a flat or zig zag.
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Although it appears a low was likely made, I am skeptical that Friday's movement was impulsive. If it were, then price will probably need to continue upwards Monday to finish out the wave 3 of wave 1. I am still in favor of the current upmove as a strong wave B, and the following movement will be a down move to finish wave C. This wave could be completion, or it could be part of a triangle. Afterwards, the impulsion should begin.
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Current assumption until proven otherwise.
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Looks like we're running a risk of an extended 5, which would finish near 85.30. Maybe initial results for earnings is negative, and once info is digested and Fed decision made public, we start the impulsion to the upside? We shall see.
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Updating the last corrective wave to a triangle since wave 4 was not allowed to break wave 2 resistance line.
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After studying the extreme after hours movement and what it could mean for tomorrow's opening, I have concluded it is probably not a 'wave e' of a triangle. 'Wave a' really needs to be the smallest wave, but, in this case 'wave b' is the shortest. Plus, it would be rare for a triangle to form as a wave C (larger degree).
This means the only movement left that would fit, although not perfectly, is an impulse to the downside. I'd expect, at open, price will surge to create a wave 4, and sellers will come back in to push it down late morning and into the Fed meeting. By measuring wave A (yellow), possible end targets include 161.8% at 85.61, 200% at 84.37, and 261.8% at 82.31 (most likely imo unless buying interest pre-morning bumps up pricing).
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This requires an upmove to complete what looks to be a double flat pattern.
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I'm looking for something like this. A rise in price to create wave 4, and an additional drop to finish out wave 5. I'm beginning to salivate for the June 16 95 calls.
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Could this be it? Fingers crossed.
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Loaded up with long calls anyways, btw.Comment
I think its pretty safe to say we are on wave 5 of wave C in the current screenshot. Since wave 3 is the extended wave, then we could estimate wave 5 by measuring wave 1. The most likley values via the fib ext are at 80.49 (100%) and 79.16 (161.8%). There are also fib retracements of the whole A-B-C structure at 81.08 (76.4%) and 79.36 (85.4%).
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Here's a screenshot that shows how I'm viewing this particular corrective wave.
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Looks like the impulse has started...Comment
This is undoubtedly the impulse we've been waiting for. I'm still expecting to see a wave 5 (black), which may or may not be a 5-failure. Afterwards, be prepared for a retracement during wave 2. I would expect at up to 61.8% retracement.
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Remeasure of the structure for price/time with the assumption the May 3 low completed wave B (green). 100% fib ext takes price to 102.82 and the 161.8% to 119.12. Fib retracement of the large wave A decline (red - not shown) shows price at 107.90 for 61.8% and 126.76 for 76.4%.
As for time, 61.8% is 5/23, 100% is 6/6, and 161.8% is 6/27. I like 100% time and 61.8% fib retracement at 107.90. Those are currently my targets.
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Invalidation of the proposed impulse occurs at 83.55, and price action will remain corrective. In such an event, the only pattern that would fit well is a triple combination, and price action is forming an expanding triangle. This would move an impending impulse back a few days.
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Looking good so far. I'm under the assumption that wave 5 (black) has completed with today's rally; and therefore, wave 1 of the larger degree (yellow). Next week, I'll be looking for 3 waves to the downside for wave 2 (yellow). A good target area for completion of wave 2 would be between the 38.2% and 61.8% fib retracement levels. Hopefully, its a quick and shallow correction, which would bode well for an upcoming wave 3. A wave 3 extension would be even better. A drop below the 61.8% fib retracement endangers the structure of an impulse.
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Looks like this impulse is going to take far less time than I expected. I corrected the count by moving the wave 2 (yellow) where I previously counted wave 4 (black). So, it appears we are currently on wave 3 (yellow) of the impulse. My target for this jump is around 100, or the 161.8% fib extension of wave 1 (yellow). After wave 4, there should be an additional wave up to complete wave 5, which I'm expecting to challenge 107 area. This looks like it will happen prior to 5/23 unless we get a drawn out wave 4. This should complete wave C (green) that I'd been expecting.
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The safest situation here is probably to assume we are on a possible extended wave 5. If that's the case, we should see 5 more waves to the upside, the current being wave 1, for a target between 105-112, which are the 61.8%-100% fib ext levels of wave 1 + 3 (yellow).
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In addition, this also could be wave 3 (yellow) completing, which would be followed by a deeper wave 4 (yellow). In this situation, price could return to the 94-96 area, but will then continue onto a wave 5 (yellow). I prefer the former scenario of an extended wave 5 as it will be easier to count, but both speculate a continued increase in price to at least 105.
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It looks as though the latter of the 2 scenarios forecast in the comment above ended up being correct. After today's price action, I am assuming wave 5 (black) ended at 99.87, which completed wave 3 (yellow). After, price corrected to create wave 4 (yellow), which I'm assuming has completed at the low of the day of 96.21, and therefore, price should breakout above 99.87 as it develops the final wave 5 (yellow).
Since wave 3 (yellow) seems to be the extended wave, waves 1 & 5 should relate via a fib relationship. The 100% fib ext level of wave 1 forecasts a price target of 107.23. When I measure the whole of wave 3 (yellow), the 61.8% fib ext gives a price of 106.55. These are very close to the 107.90 price target for wave B (red) discussed previously, which is the 61.8% fib retracement of the whole wave A (red, not picured) structure measured from the 164 high to the 54.57 low. Good luck.
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Price action looks to still be in a corrective state with a possible x wave (black) completed at open. If this is the case, an additional a-b-c (black) is likely to play out, which might challenge the 96.21 low, in order to finish out wave 4 (yellow).
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I am assuming wave 4 completion will happen today.
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Update of the current count. I am still under the impression this is a complex wave 4, which I was assuming would happen as the increase of price from the 81 low happened extremely fast. With that said, price went lower than I expected and I can't help but to look for a miscount.
We can make out a possible 1-2-3 pattern where I've labeled the second a-b-c; if this is truly an impulse to the downside, then it invalidates above 96.14 because wave 4 price action cannot touch the price action fo wave 1 (a hard rule). Such an occurrence would all but guarantee a price increase into the 100's.
There are other features of this movement that scream corrective action, like the area where I labeled an x-wave being too deep of a correction to be a wave 2, price touching the 38.2% fib retracement of wave 3 (yellow), and price action challenging the previous wave 4 (black) of 1 lesser degree.
Good luck.
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This current dip still appears to be structured as a corrective wave imo. If so, we are either completing an additional black (wave c), or black (wave a). (Wave c) would call for completion and (wave a) would require 2 additional waves.
In addition, the whole structure is beginning to look out of proportion if this is a wave 4. Although its not a rule, a series should look like it belongs to itself. Timing issues are at play here as well. If this series has completed, then it didn't even make the 38.2% fib time extension, which is a highly unlikely scenario. I'm starting to lean into the idea that the impulse from 81 to 99 is an extended wave 1 (yellow), and we are currently on wave 2 (yellow). This would bring the whole series back into proportion in terms of price and time.
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I am assuming wave 3 (yellow) is currently underway. A good target is the 61.8% fib ext of wave 1 at 106.
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I'm assuming wave 3 (yellow) is almost complete with the slight dip towards the end of the day a wave 4 (black). I'm thinking there will be a rally tomorrow to finish out wave 5 (black). The price level to watch will be the 61.8% fib ext of wave 1 (yellow) at 106.39.
My guess is this level will be challenged tomorrow and fail into wave 4 (yellow). Wave 5 (yellow) might become elongated and compare to the time of wave 1 (yellow), which would allow the whole series to end near the 61.8% fib time ext of wave A (green) at May 23. Unfortunately, wave 5 (yellow) will be the smallest wave unless wave 3 (yellow) can beat 106.39. This is an unlikely scenario as I am betting wave 1 (yellow) is the extended wave and therefore the longest.
In all likelihood, price will complete near 107.90, which is the 61.8% fib retracement of wave A (red), or the whole structure from 164 to 55. As a result, I will be preemptively closing my trades on a strong rally tomorrow. I hope to get as close to 106.39 as possible. I will continue to hold if there is a burst over as it might signal a chance that there will be parity of wave 3 (yellow) to wave 1 (yellow), which is 115. Good luck.
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In addition, price should not violate the price territory of wave 1 yellow (represented by a thick black line at 99.94). If we get a failure tomorrow, it signals that something is wrong with the count and the series is threatening completion at that level. In such an event, I will close my position.Comment
This structure from today's low does not look like an impulse so far. We would expect for price action to be little more explosive. With that said, there also doesn't look like there is an impulse impending for the downside either. Price has already retraced up to 85.4% of the move from 103 to 100. Although not impossible, its not how I would expect an impending impusle to behave, and I would like to see less than 61.8% retracement to prove an impending impulse.
So, the jury is still out, but if price doesn't pop to the upside soon, then we could be experiencing a B wave, which would be followed by a C wave to challenge 100 again. In this event, it could be possible this current dip is a wave 2 because it would make it out of proporation with what I have already labeled as wave 2, but at this point I'm still skeptical.
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Update of count expectation. Today's rally looks like a wave B, and not a wave 5 as assumed before. This means a corrective wave of this size is probably wave 4 (yellow). Price should not drop below 99.94, or into the price terrirory of wave 1. I'm still estimating 106-108 area by May 23 for completion.
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Position closed. I am still expecting a wave 4 and 5 for continuation, but I'm pretty set on 108 being completion. The 76.4% fib retracement from the 164 high is at 126.76. This could also be a possibility, but if 108 is the high, htere's not much gain left in this move. Good luck!
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