Within this correction it is pretty obvious Wave B has ended beyond the start of Wave A. This leaves two possibilities fro simple corrections: a running flat or an expanded flat.
Running Flat:
- B ends beyond the start of A
- C ends before the end of A
Expanded Flat:
- B ends beyond the start of A
- C ends well beyond the end of A
So which avenue do we go down?
Check out the RSI. Notice how the price has made Higher Highs, but the RSI has made Lower Highs. This is bearish divergence, so we are dumping whether we like it or not. That Wave C is coming.
However, the hidden bullish divergence tells another tale. The price has made Higher Lows until recently, and the RSI has made Lower Lows.
The hidden bullish divergence I believe will support the end of Wave C, and keep it from retracing the entirety of Wave A.
On top of that, there is a load of liquidity at 10900-11100. We are yet to properly retrace this area, as it has only seen a long tail wick and nothing more since the end of Wave A.
Again, I might be wrong. So let's talk invalidation.
Once we retrace to the demand zone at 10.9-11.1k we must slow down before reversing. The RSI must print regular bullish divergence on the LTF (price makes lower lows, RSI makes higher lows). Ideally, we should see long tail wicks sucking up the demand zone, or an extended accumulation at support to signify stability at the 10.9-11.1k level.
If we break the demand zone or the RSI prints bearish divergence on the LTF, then it'll be quite clear we are heading lower. In this case, our final option is likely an extended flat. The next HTF demand zone is at 10500.
See you at the bottom of Wave C, wherever it lies.
Running Flat:
- B ends beyond the start of A
- C ends before the end of A
Expanded Flat:
- B ends beyond the start of A
- C ends well beyond the end of A
So which avenue do we go down?
Check out the RSI. Notice how the price has made Higher Highs, but the RSI has made Lower Highs. This is bearish divergence, so we are dumping whether we like it or not. That Wave C is coming.
However, the hidden bullish divergence tells another tale. The price has made Higher Lows until recently, and the RSI has made Lower Lows.
The hidden bullish divergence I believe will support the end of Wave C, and keep it from retracing the entirety of Wave A.
On top of that, there is a load of liquidity at 10900-11100. We are yet to properly retrace this area, as it has only seen a long tail wick and nothing more since the end of Wave A.
Again, I might be wrong. So let's talk invalidation.
Once we retrace to the demand zone at 10.9-11.1k we must slow down before reversing. The RSI must print regular bullish divergence on the LTF (price makes lower lows, RSI makes higher lows). Ideally, we should see long tail wicks sucking up the demand zone, or an extended accumulation at support to signify stability at the 10.9-11.1k level.
If we break the demand zone or the RSI prints bearish divergence on the LTF, then it'll be quite clear we are heading lower. In this case, our final option is likely an extended flat. The next HTF demand zone is at 10500.
See you at the bottom of Wave C, wherever it lies.