Early February we got indeed a retest of the MA 76 from below as written in my January post. After that retest I expected wave 3 to start somewhen in mid February. Although we got a selloff down to 1045 this was not Minor wave 3. It was only the end of Minor wave 1. A rally followed (Minor wave 2) which didn't stop until it challenged the MA 76 for a second time in late February. The high so far for wave 2 is at 1112, right at the 62 % retracement level of wave 1.
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Bullish count (alt): In the chart below I added an alternative bullish count. In this count we finished wave (4) of [1] or [A] up and are already in wave (5). I don't like this alternative though, wave (3) just doesn't look like a third wave. But should the market make new highs this will be a count we have to consider and we may be on the way up to the 62 % retracement level of the 2007-09 bear market.
In the past years the market always made an important top or low in March. While my preffered Elliott Wave count suggests a top in March (wave 2) there are many cycles which bottom early March. So, a mixed picture at the moment but I hope it will become clearer after the first trading days in March.
In the past years the market always made an important top or low in March. While my preffered Elliott Wave count suggests a top in March (wave 2) there are many cycles which bottom early March. So, a mixed picture at the moment but I hope it will become clearer after the first trading days in March.
The market decline in Jan looks like it is wave 1 of 1 of C. But the rally since 1045 has confused me. It's very atypical that wave 2 would be so prolonged and retrace so much of wave 1 if we are at the start of a major bear market.
ReplyDeleteHi Rajiv
ReplyDeletethis wave 2 confuses me too ...
But there was a second wave that retraced about 70 % of wave 1. It was the first Minor wave 2 of this bear market. So may be we'll see the same again. ; )
Hello hello my friend :). I love your charts ehehe! They are magical :). I agree with Rajiv so I believe more on new highs. Regards.
ReplyDeleteHugo: You make a good point. Let's wait and see if and when how wave 3 unfolds. We do know that minor wave 1 was pretty quick and decisive. And minor wave 3 should be faster and longer than wave 1. We will know in the next couple of weeks. Also, what we do know is that a breach of 1150 would change almost every elliotician count.
ReplyDelete