This is one possible idea which assumes that the low is in for this correction, and that we are in the early stages of a much-anticipated bull move. If we break the low of $5755 recently established, this idea will be invalidated.
Although this idea is tagged as “short”, it’s actually more nuanced than that. The basic idea presented here is that I expect price to move up in the short term to finish a broader wave 1, then correct down in the short to medium term to complete wave 2, then begin the longer wave 3 upwards in the broader medium term.
With that said, let’s get into it.
The Elliott Waves for this projection match up nicely to standard EW theory, so I do expect at least a $7k target in the short term, but probably higher. Because neither of the wave 1 and 2 subwaves (purple) in this bullish movement were extended, there is a good chance this fifth subwave will be, which could put the end of the broader wave 1 (blue) at around the $7450 mark. So the short-term tarket is $7060-$7455. In the diagram, I’ve drawn the waves more conservatively using minimums. But the blue box shows the target range that is possible in the event of an extended 5th.
Then begins the wave 2 correction (blue). I’ve drawn the wave 2 from the minimum expected extension described above to a standard retrace of 0.618 fib. The red box shows the possible range using a 0.618 fib. and 0.5 fib. retrace to between $6250 and $6400 for the bottom of this correction. However, if subwave 5 (purple) extends higher to the $7450 range which I described above, then the expected bottom of the wave 2 correction would need to be adjusted to a 0.618 fib. and 0.5 fib. retrace that sits between $6400 and $6600, respectively.
Also, after this correction completes, the broader medium-term wave 3 (blue) would begin, which could see a target of $8400, and possibly $9200 if subwave 5 (purple) extends well beyond $7k to the $7450 range in the short term.
Finally, there are some inverse H&S structures which can validate this EW view. Specifically, the wave 2 correction (blue) to $6250-$6400 would become the right shoulder of the uptrend that could send us to $8400 in the broad medium term.
Summary:
Target 1a: $7000 - $7100
Target 2a: $6250 - $6400
Target 3a: $8400+
And if we get an extended 5th subwave (purple) to $7450:
Target 1b: $7450
Target 2b: $6400 - $6600
Target 3b: $9200+
Although this idea is tagged as “short”, it’s actually more nuanced than that. The basic idea presented here is that I expect price to move up in the short term to finish a broader wave 1, then correct down in the short to medium term to complete wave 2, then begin the longer wave 3 upwards in the broader medium term.
With that said, let’s get into it.
The Elliott Waves for this projection match up nicely to standard EW theory, so I do expect at least a $7k target in the short term, but probably higher. Because neither of the wave 1 and 2 subwaves (purple) in this bullish movement were extended, there is a good chance this fifth subwave will be, which could put the end of the broader wave 1 (blue) at around the $7450 mark. So the short-term tarket is $7060-$7455. In the diagram, I’ve drawn the waves more conservatively using minimums. But the blue box shows the target range that is possible in the event of an extended 5th.
Then begins the wave 2 correction (blue). I’ve drawn the wave 2 from the minimum expected extension described above to a standard retrace of 0.618 fib. The red box shows the possible range using a 0.618 fib. and 0.5 fib. retrace to between $6250 and $6400 for the bottom of this correction. However, if subwave 5 (purple) extends higher to the $7450 range which I described above, then the expected bottom of the wave 2 correction would need to be adjusted to a 0.618 fib. and 0.5 fib. retrace that sits between $6400 and $6600, respectively.
Also, after this correction completes, the broader medium-term wave 3 (blue) would begin, which could see a target of $8400, and possibly $9200 if subwave 5 (purple) extends well beyond $7k to the $7450 range in the short term.
Finally, there are some inverse H&S structures which can validate this EW view. Specifically, the wave 2 correction (blue) to $6250-$6400 would become the right shoulder of the uptrend that could send us to $8400 in the broad medium term.
Summary:
Target 1a: $7000 - $7100
Target 2a: $6250 - $6400
Target 3a: $8400+
And if we get an extended 5th subwave (purple) to $7450:
Target 1b: $7450
Target 2b: $6400 - $6600
Target 3b: $9200+
Comment:
It seems there are two scenarios that could play out here. The first is the ABC correction as described above, in which case we are currently in the B leg of the ABC correction (bull-trap).
However, if there is enough buying pressure, it could be that the ABC correction is already complete, and that we are in the early stages of a bull move. Either way, the short-term price target remains about the same, a top of around $6550 before it retraces somewhat.
If the retrace moves below the recent low of $6080, then it will more strongly support the view that we are in the final leg of the ABC correction. Otherwise, it will likely be a correction of the 1st wave of a bull move.
However, if there is enough buying pressure, it could be that the ABC correction is already complete, and that we are in the early stages of a bull move. Either way, the short-term price target remains about the same, a top of around $6550 before it retraces somewhat.
If the retrace moves below the recent low of $6080, then it will more strongly support the view that we are in the final leg of the ABC correction. Otherwise, it will likely be a correction of the 1st wave of a bull move.
Summary:
Target 1: $6000-$6100 (A leg)
Target 2: $6500-$6600 (B leg)
Target 3: $5755 (C leg)
Target 4: $7500 (bull wave 3)