One thing I get asked a lot is when do we know one elliott wave has stopped and another has started? My answer is, I look first for a departure of the channel ... when we leave the channel ... and I'm not talking about a spike above the channel, but a steady support outside of it. The second I look at is the levels we reach, and whether it confirms a reversal ... not the subject of this message.
Here we have a clear channel, which I suspect is WAVE B of a bigger ABC down ... C could take us down to 6.9k maybe even 5.4k ... but B will go up in the meantime ... we need a B before we start a C!
Now, it's too early to tell if this is in fact B wave, but certainly it's heading in the right direction. Without the channel it's hard to see what is going on. All we see is that BTC is testing 8k again, sell the house!!! LOL.
No panic necessary as long as we are inside the channel, it confirms a slow and steady rise up ... and when it breaks down in a material way, well then we can react.
The channel, if drawn correctly, can save us from wrong decisions ... like should I sell now? Imagine BTC is at the bottom of the channel and you think it's crashing and sell, only to find out it rebounds ... and you ask why? IF you drew the channel, you might see that you would be selling at the lowest potential level in the channel at that moment, and could miss out on a run to the top of the channel. If you're going to sell, you really have two logical choices. (1) sell at the top of the channel, or (2) hold and only sell if we exit the bottom of the channel in a material way!
So right now, this is a hold for me ... I have alts, and hope to make some quick profit, which I'm confident will happen as long as we stay in this channel!
Remember, only a fool relies on one possible outcome.
Do not make investment decisions using this information. For educational purposes only.
Mark, can I get your thoughts as to why you suspect an ABC vs. an XYZ corrective pattern? I'm new to Elliott wave theory and would appreciate your insight.
MAGICMARK
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@jpbrown1023, I cannot discard your approach, it's another logical interpretation. But I see from 10k to 7.9k as one long wave A, made up of an impulse wave down, 10k to your first yellow W is wave 1, wave to yellow W to yellow X, wave 3 is yellow X to yellow Y, wave 4 is your purple W to purple X and wave 5 as your purple X to purple Y. I've checked the lengths and wave 5 landed fairly close to the target in that case. I think given the weak buying market now, we are in a wave B correction, which in itself will be an ABC correction perhaps taking us up to 8600 mark, then an impulse down to 6.9k. Please note, there are several interpretations, even other paths I see, but if I put all that on my chart, no one will be able to understand it, not even me ... so I remove everything except for my two "most probable" scenarios.
@MAGICMARK, thank you, sir! Of course as things develop there will be more evidence to narrow down the options as to which path the market is following. But one thing I enjoy about Trading View is the multitude of different perspectives and/or interpretations of the same data. It's easy to get stuck in your own head. This idea is a great example of that. Had I not been aware of this post, I might have been in for a rude awakening expecting the start of a push upward when there could still remain a significant amount room to fall. Thanks for sharing.
MAGICMARK
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@jpbrown1023, my pleasure. Have a look at my other ideas, not sure if you've seen this one, it's the big picture!