I ended up taking a tiny profit after yesterdays trade as the market did not break down as low as I wanted.
I think we have now finished the upward trend and it will break lower from here.
Why will we break lower?
1) Wave (iii) was almost 2.618 x wave (i). When wave 3 is as extended as this, the 5th wave will usually end when it hits 1.618 x wave (i) (added onto the end of wave (iv)). The top of wave (v) is exactly the of wave (i), so I think we have topped out.
2) We have confirmed the 3rd touch of the white downward sloping trendline as a resistance has already been confirmed by reversal candles.
3) We are seeing divergence on the 3,4, and 6 hour charts on and .
Issues with this trade?
1) The lower time frames (1h and 2h) only show divergence on and not on the histogram.
2) Wave (v) has spanned over much longer than wave (i). However, I believe that this is due to wave (v) being extended.
3) Wave (v) appears to have 3 waves instead of 5. This seems inconsistent with theory but I have seen many wave 5's ending with only 3 waves.
Over I think this is a solid trade and I have set a stop loss to get out if we do break higher.
1) 38k - 39k
2) 36k - 37k
All the best, and good luck!