Update II: Correction of First Elliot Wave of New Cycle
It appears we are still in the corrective wave structure that is moving sideways. In Elliot Wave Theory, sometimes corrective waves aren’t simple ABC zig-zag waves, but chains of corrective wave structures that can move in a sideways direction, including WXY and WXYXZ corrective chains structures. Effectively, each of the subwaves in ABC get replaced with corrective chain structures extending the correction sideways.
However, we may be getting some movement in one direction or another very soon. Why? A triangle pattern as formed. This means that we could break out in either direction. If we end up breaking down, then we are completing the ABC correction wave. If we end up breaking up, then we have already completed a very shallow ABC correction wave, where the red leg labelled A is actually C, and we are likely beginning the next upward Elliot Wave.
Given this, I have two targets, depending on which direction we break. If we break up, I’m looking at the bounded range between the two recent resistance levels $350 and $367. If we break down, I’m looking at a target between $295 and $317. The magnitude of the B wave (if in fact it is a B wave) has extended the possible lower target range in the event of a downward breakout.
I'm still preferring short, as the ABC correction wave has been too shallow. Abnormally shallow. But it could go either way.
Target I: $295-$317 (break down)
Target II: $350-$367 (break up)
However, we may be getting some movement in one direction or another very soon. Why? A triangle pattern as formed. This means that we could break out in either direction. If we end up breaking down, then we are completing the ABC correction wave. If we end up breaking up, then we have already completed a very shallow ABC correction wave, where the red leg labelled A is actually C, and we are likely beginning the next upward Elliot Wave.
Given this, I have two targets, depending on which direction we break. If we break up, I’m looking at the bounded range between the two recent resistance levels $350 and $367. If we break down, I’m looking at a target between $295 and $317. The magnitude of the B wave (if in fact it is a B wave) has extended the possible lower target range in the event of a downward breakout.
I'm still preferring short, as the ABC correction wave has been too shallow. Abnormally shallow. But it could go either way.
Target I: $295-$317 (break down)
Target II: $350-$367 (break up)
Comment:
ABC correction finally realized. Patience pays off. There is a bullish downward wedge forming, so I am expecting a return to a higher price support shortly, somewhere in the $310-$312 range.