SPY is approaching the 0.786 fib retracement of wave 1. For wave 2, the standard is 0.618, but can go much higher. The condition of wave 2 is that it must not exceed wave 1. With today's run-up, we see volume exceptionally low. This should sound the alarm for traders and is showing me warning signs of a very large reversal. I am anticipating the largest drop in a single day that we have seen this year to come within the next few trading days. This drop will begin the start of wave 3 (the largest of the 5 waves) and many stocks that I follow are showing similar setups. All stocks that I have posted on this week are still within their range and I have not changed my thesis on them. META and AMD especially. Be patient for this setup. My target for the completion of Wave 3 is 464 (161.8% of wave 1).
PT1 494, PT2 483
PT1 494, PT2 483
Note
This idea is still not void from what my more knowledgeable EW traders are saying. From what they tell me, this is an ABC bounce of wave 2 and we should see Wave 2 end in the next week and the start of Wave 3 developing. Keeping my options open, but this upcoming week we are down, then up for the completion of either wave 1 up or the end of Wave C of Wave 2 down.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.