Wedge broken, look for support at $8700 and $8300
Updated
The ascending wedge predicted yesterday which was accompanied by decreasing volume (composed of waves 1, 2, and 3) has failed its support trendline and headed to a sharp correction for wave 4 since wave 2 was relatively flat. We have two parallel channel trendlines that offer support. First at $8700 and then $8300, the latter is a must hold or we may in fact be headed towards retesting the recent low ~$7200.
Aggressive buy opportunity if we correct to $8300.
Peace and Love,
crypt0guy
Aggressive buy opportunity if we correct to $8300.
Peace and Love,
crypt0guy
Note
Since, the downwards breakout we have stalled about half way down to the first dotted line support, a midway consolidation move for wave A. This is very typical. I am anticipating a rising B wave correction that will ride this first trendline, followed by a dump towards the bottom dotted trendline. That would make wave C about 1.618 times wave A which is quite common of a zig-zag correction. I won't be making any trades until then.Note
We formed a bearish flag/wedge looking pattern on the midway move. Headed to the trendline soon following a breakout downwards. After that, I expect a much larger upwards correction before the final break into wave C.Note
Often times, wedges like above drop into rectangular flag formations before continuing down.Note
Here's a very bull and unlikely scenario unless we see huge volume break up soon. Volume has been trending down since the recent bottom. If the first trendline holds, then it may signal that we are in subwave 2 of an extended wave 3. If this is supported by large volume bounce at that first trendline, then we may be headed way up. More likely, scenario is we see a reasonable bounce and consolidation before we continue down. It does not feel as though the will of the bulls is strong in the market right now despite having such a strong bounce from $7200 area.
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