appears to have topped out. Anything is possible, but the wave count appears to be complete, RSI
has diverged, RSI
has started lower lows and lower highs. We still cannot rule out that this is just an X wave and that the larger scale will continue to correct. So when we look at the upcoming correction, we will be looking at how the wave corrects. Correction waves tend to be more shallow, tend to follow a channel, and tend to have overlapping waves. If the upcoming wave has the appearance of a corrective wave, it will give us more confidence in starting a long position. So for now, we are looking for a correction that is at minimum 38% but more commonly 61.8%-78% of the previous wave.
An aggressive entry would ladder into a position at the 50%, then the %61.8% and at the 78% Fibonacci retracement
levels and place the stop at just below the 100% retracement level.
A more conservative strategy would be to wait for the correction to complete and then wait for price action to break through the top of the descending channel
and close higher than the top of the 1 wave with good volume
This information is intended to be educational in nature, and help people understand how to use Elliot wave
theory to benefit investment timing. We all must make our own decisions.