The chart shows that we have completed the first impulse wave up (wave 1) and are now smack dab in the middle of a corrective wave (wave 2). The second wave in a 5 wave impulse is a corrective wave and works against the prevailing trend. It can take the shape of a , flat, or triangle but we normally don't see triangles in 2nd waves. This particular corrective wave seems to be an . I have also shown the sub-waves of a lesser degree within waves 1 and 2 for your reference. Note that wave 1 has 5 subwaves (12345) and wave 2 has three subwaves ( ).
Targets are marked with green horizontal lines. The first is the .50 fib retracement of wave 1 and the second target is the .681 fib retracement of wave 1. Wave 2 CAN retrace up to 99% of wave 1, but because of the very sentiment we are seeing I find that to be highly unlikely. Wave C of the also tends to equal wave A in length, which makes the .50 retracement the most likely target (right around $200).
Furthermore, wave 3 is often the longest and most powerful impulse wave up (out of waves 1,3 and 5) and I want to make sure we catch the train before it leaves so I will settle for the more conservative target of the .50 retracement rather than aiming for the .681 and possibly missing the next leg up.
Feel free to ask any questions in the comments and I will also update this idea regularly.
***THIS IDEA IS JUST MY OPINION AND SHOULD NOT BE TREATED AS FINANCIAL ADVICE***
NOT SO FAST!
The price spike we saw here was just the third subwave of B wave of the ABC zig-zag correction that we know is wave 2. In a zig zag, our three waves (ABC) have a 5-3-5 subwave format. Meaning wave A will have 5 subwaves, wave B will have 3, and wave C will have 5 more subwaves. That means C wave still needs to play out and we are still headed lower! The chart below has the subwaves of the ABC corrective wave (Wave 2) drawn our for your reference. You can see we are still waiting for our targets to buy in!
Generally, Wave C tends to equal 68%, 100%, or 168% the length of Wave A. On the chart below, I have denoted the 68% and 100% lengths of Wave C with red horizontal lines. The 168% length takes us down to $170 levels but I have ruled that out (for now) because it is an unlikely scenario. As we can see, the 168% length puts us right in the middle of our two original targets (green horizontal lines) which were based upon fib retracement levels of Wave 2, HOWEVER, the 68% retracement puts us above our first green target at approximately $205 levels. This means there is a chance we bounce off this new target which would mean our wave 2 only retraces about 32% of Wave 1. Although 50% and 68% retracements for Wave 2 are most common (green horizontal lines), 32% retracements can definitely happen as well, so it is something we need to be open to. For conservative traders, setting buys around the earliest target is the safest bet.
Also, because we know we will have 5 sub-waves down with Wave C, it will get easier to estimate which of the two wave C targets we are most likely to reach as the 5 subwaves play out, so I will try to update this idea as we go.
That being said, its 4AM here and I need some sleep, so I'll likely be setting orders at the $206 level for now in case things move fast and I'm not awake to catch it!
Ill be back later!
Although it took a while, Wave 2 has finally ended, and did not cross above the top of Wave 1 (doing this would have invalidated the wave count). Since Wave 2 was a very deep retrace (near 100% of Wave 1) we can expect Wave 4 to be a more shallow retrace. Wave 3 target was found by taking the 168% fib extension of Wave 1 (most common ending for Wave 3) and Wave 4 target is the 38% fib retracement of Wave 3.
Please note, our updated target is now closer to $203, but getting an extended 3rd or 5th wave can change the outcome. As always, our target should get more accurate as time progresses and the subwaves play out.
I will keep you posted as things progress. In the meantime sit back, relax, and enjoy this Wave 3 drop!
Hey followers, I just noticed a symmetrical triangle forming here on the 15 minute chart. It is in between the green trendlines on this chart. These tend to be continuation patterns which means a movement to the upside, and the measured move is at about $255.
If we break up, it means my Elliot Wave count was off. The alternate count is pictured below. In this alternate scenario, the first major dip after Wave 1 was in fact the end of the 2nd wave (at the 32% retracement level) and we are already in the third impulse wave up.
I will be buying in if we cross $237 as crossing that will officially invalidate the old EW count.
Keep in mind, this scenario only goes into play if we break out and cross $237-$238, but as its looking more and more likely that this will be the case it is good to be prepared for other scenarios.
Adjusted triangle trendlines. Gives us another 5-10 hours for a breakout or breakdown.
Remember, the breakOUT that we saw earlier had a close above the hourly and yet it ended up falling back into the triangle (failed breakout). This is a perfect example of why we must wait for longer time closes (4 hour, daily) for confirmation of a breakout.
We are now seeing a breakdown from the triangle (pictured below) on the hourly, but again, we need to wait for closes to determine if the breakdown is legitimate.
My last chart for this idea is at the bottom of this post, and it shows possible reversal levels if we are headed lower. It is interesting to note that this drop put us right back into the triangle we broke out of earlier today, and we found support on the lower edge. This is a bullish sign.
PLEASE NOTE, I am still extremely bullish on LTC at this time, and there is a chance we don't get anywhere near those lower targets. For me, I plan on holding through this dip as I didn't get out early enough and the drop below could end with a reversal at any time. I still strongly believe we have another push up.
Thanks for following along, and for those interested in BTC, my latest idea is panning out quite well. Check it out!