Where from here?
First we need to finish off this Minor 5 wave impulse and then do a corrective wave. If the smaller Micro level count is correct, given we are seeing an extended Minor 3 wave, I expect to see the Minor 5th wave equal to the Minor 1st wave. The numbers will move as this plays out but given the current information, this will likely take us to between 11.2k and 11.6k. This would lead the corrective wave to go between 0.382 and 0.618 (10.6k and 10.2k). It's then open as to where we go from here, either down for a bigger correction or into a new Primary 5 wave impulse up.
I could try and enter in the middle of this current Minor 5 wave impulse but doing so on the 4th wave doesn't offer a . For example, we could see a more aggressive 4th correction, truncated 5th, or the wave count could simply be wrong. I'd also prefer to see the retrace of the full Minor wave complete and a reversal back up instigated enter us into a new Primary which would be the big 3rd wave of a Super Wave formed from the bottom at 6k.
As a target, using fibs from this first Minor wave, my expectation would be that this Primary wave would take us to around 14. 25k . There's still a lot to play out and whilst I have indicative figures and a sense of direction, I will wait until the set up unfolds to define my entry, targets and stop loss.
This is unlikely to unfold in the exact way as above but hopefully the general moves will align to allow me to enter a trade with a . If events unfold in a very different way I would reevaluate as we could very well be heading South again. Equally we may not see the retraces I am looking for and I might miss an opportunity or have to enter at a higher price. The key is to do your own research and plan trades that work for you.
** Wave annotation, largest first
Super : Large black e.g. 1
Primary : Bold grey e.g. iv
Minor : Circles e.g. (4)
Micro : Small light grey e.g.4
This set up is looking increasingly less likely to materialise. To enter a trade I'd want to see this wave (5) and then at least 0.316 retraction. Ideally I would want this contraction coming from sideways movement over a relatively long period so that the long term down trend can be established as a support line.
There's still more to be done before the setup is confirmed, but so far I'm happy with the path.
*IF* my count is correct, using the wave (1) projection, we could be going up to around 10.9k for a truncated Minor (5) before then entering a corrective wave.
I will be looking to go long at a reversal in the region of 10,500 to 9,300. The stop loss would be the wave count invalidation, which is a breaking of 9,300. I'm expecting this set up to take at least a day or so to unfold.
The ideal scenario would be around 10,300 as this lines up with:
- 0.5 fib
- Long term diagonal trend line
- Wave 4 bottom of this recent Primary Wave i
- Historic support
There's a small chance we could head up a little again for the Micro Wave 5 within the Primary Wave 1 but that would not change any of my assumptions.
There are various other counts that could be unfolding, the main one I can see is a scenario where we posted a Minor (1) 11,065 and we are in a larger Minor Wave (3) going up. I have marked the (1) in orange. I'm open to this but will not trade it because the risk reward doesnt work for me.
An Ending Triangle had formed at what was likely to be a Micro 5th wave of a larger Minor 5th wave. This is typically a clear signal for an entry to short.
The target was the 10,500 or lower I've been talking about for a while. The stop was extremely tight, just above the triangle which gave huge risk reward of 16:1.
Stop : 11567
There is interesting convergence of fibs at 10,680. 0.382 of the Primary i and 0.618 of the Minor Wave (5) and the 1D 50EMA. It would be reasonable to expect a bounce here. But I think this will just be to complete the B leg of the ABC correction. I will look to close out my short here but with the aim of shorting again at a bounce off 11,000.
To go long I am looking for a larger correction down to the 0.5 - 0.618 of the Primary i (10,400 - 10,200). This is the bottom of the Minor Wave (4) and, depending on the speed of correction, would have the long term diagonal trend as support.