Since the economy recovery from the 2008 crisis, stock index worldwide are skyrocketing, thanks to quantative easing programs and Zero-Bound Interest Rates. After ending QE, the next big action of FED will be to increase the interest rates, that could cause an end to bull stock market that prevails since August, 2012. Last week most of trade ideas published on tradingview were bearish predicting the US Stocks Apocalypse, and the consensus of these opinions is that the fall will be enormous, since we are facing one hell long bull market. I don't belive that will happen, yet.
Using Elliot Wave and Zig Zag Indicator, I assume that we are in the middle of the fifth wave (or we can be in some kind of complex fourth wave, since the first correction was a normal one), that's one explanation for why prices recovery fast after the end of September drop, and why it's not falling like the end of the world already.
So my trade idea is to place a order if the price action break the resistance of the pink pitchfork, since if the price breaks this resitance it's show that it's not time for the correction already or some complex fourth wave.
The two price targets that I got (orange lines) I calculated using Ramakrishnan book recommendation for the lenght of the fifth wave: "Take the distance from the start of wave 1 (point 0) to the end of wave 3 and compute the following rations: 38,2% and 61,8%. You will then add the results to the end of the wave 4 to arrive tat two potential targets for wave 5."
The dark blue parallel channel can be used as a tralling stop after the first target is hit, since if the price action violated the lower bound of this channel, it can be a signal that it's time for the corrective phase.
Using Elliot Wave and Zig Zag Indicator, I assume that we are in the middle of the fifth wave (or we can be in some kind of complex fourth wave, since the first correction was a normal one), that's one explanation for why prices recovery fast after the end of September drop, and why it's not falling like the end of the world already.
So my trade idea is to place a order if the price action break the resistance of the pink pitchfork, since if the price breaks this resitance it's show that it's not time for the correction already or some complex fourth wave.
The two price targets that I got (orange lines) I calculated using Ramakrishnan book recommendation for the lenght of the fifth wave: "Take the distance from the start of wave 1 (point 0) to the end of wave 3 and compute the following rations: 38,2% and 61,8%. You will then add the results to the end of the wave 4 to arrive tat two potential targets for wave 5."
The dark blue parallel channel can be used as a tralling stop after the first target is hit, since if the price action violated the lower bound of this channel, it can be a signal that it's time for the corrective phase.