Additionally, the market has been tracing out a pretty well-behaved standard set of patterns during this period, and it is most suggestive of having bottomed in wave (2) (in red), and is in the beginnings of a wave (3) higher.
And, while I still continue to track the immediately case, the probabilities are now considerably more strongly in favor of the case shown in the chart. In addition to the relative merits of the underlying wave counts for the and cases, there are two key divergences that I'd like to point out. First, the 4hr chart with the kind of divergence that we would expect to see around major bottoming , highlighted here:
Second, the same kind of divergence on the 1 hour chart, into the wave (2) low noted on the main chart above:
So, in the context of the question we've been trying to answer - whether the low of 8/2 was the bottom of our wave 4, before we return to the larger uptrend in a wave 5 - the weight of the evidence is increasingly suggesting that the answer is "yes".
What we have to watch for now...A break above 611 will seriously damage the immediately case, further reducing its statistical likelihood. A break above 629 would all but eliminate it as a possibility. We can expect some resistance at both of those levels (the orange lines on the chart).
A break below 592 from here will again raise questions about the immediately count, at which point we'd need to reassess (with support levels as noted in previous updates). However, this is not my current expectation.
Another key moment...as we give the market a chance to reveal what its preferred path upward will be.
My current expectation is that we'll find support in the area of 600 - 595, before rallying to test our first overhead support around 611...
My apologies that the updates are now a bit out of order...I'll post a fresh idea soon to get things back on track.
I've been posting the following chart in the chat rooms over the last few days:
We have now topped at 640, and I'm expecting a drop to wave 2 support in the 600 area.
This is an extremely important moment in the context of the immediately bullish and bearish scenarios that I have been following. A defining moment for the market to indicate its immediate intentions.
If support for purple wave (2) holds on this drop, the evidence very strongly suggests that we will commence a long term rally from that support level. This would be an excellent, high probability, low risk, high reward place to enter the market or add to existing long term positions.
Additionally, this will be wave 3 of 3 - the heart of a 3rd wave - the typically strongest part of an Elliott Wave impulsive pattern.
If, however, we drop much below the blue box, it will be strongly suggestive that the market will be heading to the mid- 400's before an uptrend can resume.
The pattern can allow as low as 585 before concern is warranted, however, it is my current expectation that the blue box (or perhaps slightly above it) will hold.
I consider this a potential generational opportunity.
So far, things are going as expected. As you can see in the chart below, the market has so far has extended green wave v to reach a temporary top at 642, roughly in the middle of the expected topping range of 637 - 650.
Although it's possible to extend a bit higher toward the top of that range, that is not my current expectation. I expect that we are now beginning the decline to the blue support area noted on the chart.
What to watch for:
If we extend deeper through the bottom of the blue box toward the 585 area, it will raise some question about the immediately bullish scenario. Much below 585 will begin to increase the likelihood that the immediately bearish scenario that I've discussed in previous posts is the active pattern - pointing to levels under 500 before an uptrend can resume.
This is not my current expectation - I currently expect that the blue box will hold as support.
If we complete the upcoming decline in a valid 3 wave Elliott structure, followed by a properly structured upturn, without dropping as deeply as the blue box, it would be a quite bullish sign indeed. This would be strongly suggestive that the low of 2-Aug was in fact a long term bottom, and the long term uptrend had resumed, with much higher levels to come.
As I posted in the bitcoin room a few days ago (https://www.tradingview.com/chat/m/11c6fe1df5624f62a8c379fb32754d65/), my current expectation is that we now have a clear path to the 630 region, with significant resistance/confluence at 637. Once the current 5 wave move completes - shown in green on the chart below - I'm expecting a meaningful pullback.
The structure of that pullback will be a critical and likely deciding factor as to the question of whether we are now well on our way to much higher levels, however, the nature of recent market action has further tilted the probabilities in favor of the bullish case that I've been tracking. Stay tuned...
...however, some of the internals/technicals are starting to get to extreme levels, so crazy things to the upside can happen from here...but I'm not seeing the the volume yet to support a sustained move, and I tend to doubt that we would see a moon shot this late in a wave 5 of 1...wave (3) after wave (2) might be a different story though...follow the pattern...