Demonstration of the Wave principle in real life KRE
If you want a demonstration of the Wave principle in real life look no longer than KRE.
It is a textbook example of an impulse wave started on 23 March 20220.
Wave almost 61.8% retracement of Wave 1
Extended 3rd wave with a 2.00 multiple of Wave 1
Wave 4 has almost 0.382 retracement of Wave 3.
And the most important one: the entire impulse wave is divided perfectly into golden ratio. 0618/0382
This impulse wave finished on 19th January 2022. Since then the corrective phase has begun.
We have 2 viable scenarios over here
Scenario nr 1.
An ABC zigzag
We clearly have a minor impulse wave down finished in 5 waves that could be intermediate wave (A).-finished on 16th June 2022
Followed by a running flat ABC for wave B. notice the truncation of minor wave C of (B) warning us about the underlying selling pressure in KRE.
And that's precisely what happened in wave (C). That is what an impulse wave 3 of (3) looks like. Fear response appropriate!
The Fibonacci ratio for wave (B) is precisely 0.382 retracement of wave A . The most common one in a zigzag.
Guideline of equality
Waves (A) = Wave (C) at $42.65 normal in a zigzag. So with this interpretation probably one more minor wave down and everything will be roses in the regional banks.
What is not normal in a zigzag is the slope of wave C should be less aggressive. So this brings me to an alternate count.
Scenario nr 2
Because of the slope and severity of this late sale this makes it a wave 3. As I said before has all the marks of impulse wave 3 down in this case.
So the whole correction becomes just waves 123 with waves 4 and 5 still to come to make just wave (A) of the decline.
I will leave it up to you to decide which interpretation is most appropriate.
Legal Disclaimer: The information presented in this analysis is solely for informational purposes and does not serve as financial advice.
