More of my musings. Looks like the top is still a good 15% away and may take until the end of the year to get there. The power of FANG-FAAMG is ridiculously strong and this rally is completely momentum based. The entire market is hiding out in this small handful of stocks. It is going to be ugly when the money moves out and it will eventually.
The key that I have noticed with waves is the way it breaks the support line during a correction. Wave A often is bisected by the trend line. Gives you a good guess how far it will drop. Wave B rarely breaks back above the support line because now it is the resistance line. Given the bullish of the tech stocks, it looks like Wave B likes to hit 1.2 of Wave A.
A word of caution, wave counts are hard to nail down and momentum can shift which peaks are critical, especially in such a FOMO/MOMO rally with lots of mini rallies. Also, it is possible for a motive wave to quit at the 1.618 level (very rare in a motive wave but possible). It is also possible for something major to cause a motive wave to pause, retreat, and stay down around the end of Wave 1 for a long time.
As usual, this is not trading advice. Hope it helps and good luck.
The key that I have noticed with waves is the way it breaks the support line during a correction. Wave A often is bisected by the trend line. Gives you a good guess how far it will drop. Wave B rarely breaks back above the support line because now it is the resistance line. Given the bullish of the tech stocks, it looks like Wave B likes to hit 1.2 of Wave A.
A word of caution, wave counts are hard to nail down and momentum can shift which peaks are critical, especially in such a FOMO/MOMO rally with lots of mini rallies. Also, it is possible for a motive wave to quit at the 1.618 level (very rare in a motive wave but possible). It is also possible for something major to cause a motive wave to pause, retreat, and stay down around the end of Wave 1 for a long time.
As usual, this is not trading advice. Hope it helps and good luck.
Comment:
FYI, I just posted a new NASDAQ analysis that may completely invalidate this analysis. We may actually be experiencing a double top right now. Tricky market based on all this FOMO/MOMO.
