JPM Long Term (Jan 2021 through May 2022)JP Morgan & Chase (JPM) (January 15th 2021 through May 2022)
Bullish range estimates:
Low: $113 - $128
High: $189 - $214
Bearish range:
Low: $86 - $123
High: $189 - $214
So with earnings being announced in a few hours, I thought I would take a look at JPM for Cindicator forecasting.
It should be noted that this chart could be extremely inaccurate as I have based this off what I think I'm seeing in the potential for impulse motive Elliott waves. I understand its decently rare to be able to properly identify and use Elliott wave theory but I see some interesting things in the current structure since the March 2020 crash.
I have mapped 2 potential paths for JPM to validate itself as EWT.
My reasoning for believing in the potential for the current structure to be a clean EWT is as follows:
-The March 2020 crash was unexpected, and a lot of markets were affected all at the same time from approximately mid-February 2020 to March 9-18th 2020. For many markets, the trading volume exploded while many market movers dumped. It was such a violent and volatile move that the VIX S&P 500/VXD DJI volatility indices registered levels reminiscent of previous devastating crashes. The candles that were printed in a lot of markets including JPM show me signs of volume exhaustion and reason to believe that something has fundamentally changed in the crowd's mindset about the asset, becoming a true trend reversal for larger moves upward. This does not confirm much for me other than the potential for at least 1 bullish bounce, but as we see in January 2021, these moves have matured a bit further than that.
-March, June, and September 2020 look like the beginning of a 1st and 2nd wave to me. After the June peak, it never retraces below a 61.8% level, which is a very common proportion in the 2nd wave retracement as far as my findings go.
-From September 2020 to now, January 2021, the trend stays on a pretty steady path upwards, has some points of resistance but it has not retraced below the $115 top of my suspected June 2020 1st wave, giving just a little more validation to my theory that the current trend could be in a 3rd wave.
-Because price surpassed levels around $113-$128, this wave could be extended to at least 161.8% OR 261.8% the length of the 1st wave. If it weren't extended, there should have been a major price correction around 61.8%:$113 or 100%:$128 wave 1 lengths.
-I'm not giving much credence to the idea that this suspected 3rd wave trend could be extended to 423.6%/425% as its much less likely than 161.8% and 261.8%.
-If the 3rd wave is extended to 425% then this chart may be invalidated soon after the $189 target is surpassed with a move to $250, and recalculation for 4th and 5th waves would be needed.
Potential 3rd Wave Extension Targets:
161.8%: $151
261.8%: $189
423.6%: $250
Potential 3rd Wave Timing:
161.8%: February 17th 2021
261.8%: June 11th 2021
423.6%: ???
If all is well, good, and expected by this time, the 4th wave could take 2 different paths because of my inability to verify if the suspected 3rd wave will be extended to 161.8% or 261.8%.
If suspected 3rd wave is a 161.8% extension, the 4th wave could retrace from $151 down to 23.6%:$137, 38.2%:$128, 50%:$121, or 61.8%:$113-$115. If it goes lower than 61.8%:$113 at this time, then all of the chart is invalidated as the wave 4 retrace cannot go lower than the top of of wave 1 which is $115. However, if this is a true Elliott wave, there is a lower probability that the 4th wave will retrace 61.8% of the 3rd wave. 38.2% and 50% retrace levels are more common here.
If suspected 3rd wave is a 261.8% extension, price could reach the $151 target around February 17th 2021, correct to $138 shortly after, and be back on an upward trend to $189 by June 11th 2021. Then, the 4th wave could retrace from $189 down to $166, $151, $140, or $128.
Now that I have set some ground rules for what waves 1-4 could look like as whole, I could have 8 different potential 5th wave paths depending on where the retrace for wave 4 ends.
If suspected 3rd wave is a 161.8% extension, my statistical guess is that wave 4 will most likely retrace to 38.2% of wave 3 around $128.
Because the suspected 3rd wave surpassed $128 and did not retrace lower, it is extended at least 161.8% of wave 1, which also means wave 5 should be at the very least, 100% the same size as wave 1. Wave 5 length COULD be equal to 100%, 161.8%, or 262.8% of 1st wave's length.
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If wave 3 is a 161.8% extension of wave 1:
& If wave 5 starts at $137:
Wave 5 100% Target: $176
Wave 5 161.8% Target: $200
Wave 5 261.8% Target: $239
& If wave 5 starts at $127.95:
Wave 5 100% Target: $166.87
Wave 5 161.8% Target: $190.92
Wave 5 261.8% Target: $229.84
& If wave 5 starts at $121:
Wave 5 100% Target: $160
Wave 5 161.8% Target: $184
Wave 5 261.8% Target: $223
& If wave 5 starts at $113:
Wave 5 100% Target: $152
Wave 5 161.8% Target: $176
Wave 5 261.8% Target: $215
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If wave 3 is a 261.8% extension of wave 1:
& If wave 5 starts at $140:
Wave 5 100% Target: $179
Wave 5 161.8% Target: $203
Wave 5 261.8% Target: $242
& If wave 5 starts at $127.95:
Wave 5 100% Target: $166.87
Wave 5 161.8% Target: $190.92
Wave 5 261.8% Target: $229.84
& If wave 5 starts at $151:
Wave 5 100% Target: $190
Wave 5 161.8% Target: $214
Wave 5 261.8% Target: $253
& If wave 5 starts at $166:
Wave 5 100% Target: $205
Wave 5 161.8% Target: $229
Wave 5 261.8% Target: $268
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Wave 1 price gain: $38.79
Wave 1 price gain x 1.618: $62.76
Wave 1 price gain x 2.618: $101.55
(Wherever wave 4 ends, these numbers can be added to that level for potential 5th wave targets.)
If we ever get to a true wave 5, we may be able to use a channeling technique to further map its path.
Of course, this could all be incorrect and invalidated at any time but I wanted to document these findings in the event I have actually come across a real Elliott wave, and it may prove good for my own research in the future.
In a few hours, the 2020 4th quarter earnings will be announced for JPM. With how good this chart looks, I can believe that the earnings may outperform the current analyst expectations of $2.62. Wall street reports a potential earnings range of $2.00-$3.00.
www.investopedia.com
www.wsj.com
Thanks for tuning in :) Disclaimer, anyone in the trade needs to do their own due diligence and decide what is right for YOU. My charts can be wrong at any time and it's very important that you have your own strategies and plans in place. I run this channel for my own educational purposes of learning to trade, and I will never be 100% right, so please do not let me confirm any bias for you! (Dangerous to do so, stay safe and remember the basics & rules of risk assessment.) Expect the unexpected and happy trading!
