The Elliott Wave Precept factors to a bounce adopted by the following transfer decrease.
This week’s “flash crash” is what I name an “initiation wave”; it has set in movement the extra in depth correction: blue wave-a in Determine-1. However, from EWP -and from finding out chart patterns in general- we all know that there’s all the time this “useless cat bounce” first earlier than the following leg decrease begins. In EWP-terms, this counter-trend rally is named a B-wave. B-waves all the time encompass three smaller waves: a, b, c. In Determine-1, I’ve labeled the B-wave in blue and its smaller waves in inexperienced.
IMHO, wave-a of B is now underway or has presumably already been accomplished, and inexperienced wave-b ought to ideally goal $1495-1575, from which inexperienced (minor) wave-c will goal $1845-1930, ideally. This upside goal zone relies on a easy c=a relationship. It additionally matches effectively with a typical 62-76% retrace of the initiation wave-A. The caveat is that 4th waves are sometimes the least dependable, i.e., most variable, and along with that, hardest to forecast worth constructions. Generally phrases, they are often thought of as a wholesome consolidation, i.e., profit-taking, after an enormous run-up (the prior wave-3) with numerous shorter-term twists and turns, rips and dips. Many would then name the “bull flags.”
No matter we name it; after wave-A comes wave-B (now underway) after which wave-C: green-red-black path in Determine 1, which isn’t correct in time. Assuming wave-B tops round $1880+/-40 and that wave-C=A, then wave-4 ought to backside round $1200+/-100. From there, I anticipated the following bigger multi-month rally: main wave-5. If the 2017 rally is of any information, see final week’s article, then please know the major-4 wave again then was a 70% correction, however adopted by an 1100% rally (!). Please maintain these numbers in thoughts in anticipation of the pending wave-5.
Backside line: shorter-term I’m in search of a considerably tough, whipsawing, transfer increased, ideally to round $1880+/-40, nevertheless it may even problem the current all-time excessive. From there, I count on a number of weeks of draw back again to $1200+/100. After that, I anticipated the following rally to ~$3000+. Nonetheless, a weekly shut under $1200 targets $900. That interprets to a 55% correction, and if 2017 is of any information, it will nonetheless be totally inside the norm. Thus, commerce ETH accordingly: sitting by means of a 40-50% correction pondering it is going to go to $3000 just isn’t a technique. It’s useless cash, which could possibly be allotted some other place. And hope isn’t a technique however a catastrophe recipe. Commerce protected!