'Those who do not learn history are doomed to repeat it.' - George Santayana. True? Perhaps. This week's chart takes a look at recent history, zooms in using a 1 hour chart, and updates the a,b,c move since December 2018.
First, the update. Shocker, but I'm not perfect. I'll readily admit that my use of Elliott Wave is far better at higher degree waves than much shorter time periods, or lower degree waves. However, it is vital to use multiple time periods with Elliott Wave to see the big picture, but also check for lower degree wave guidance.
I've updated the a,b,c correction by reviewing the lower degree details in a 1 hour time period. My charts generally use daily prices. Thanks to a comment last week by tradingview.com/u/lapin_eliott/ I have reviewed and updated the corrective a,b,c move since December's low. The shape is more evident using a 1 hour chart with the b wave actually completed, not ahead as I illustrated, and the c wave in progress as a diagonal triangle (wedge, broken white lines). The entire move comprises the a,b,c pattern.
Self similarity is another aspect of Elliott Wave placing it in the camp of history repeating. A look back at the rebound from February's decline in early 2018 shows a similar a,b,c pattern with a comparable diagonal triangle ending at September's peak, also shown as broken white lines. The vertical broken line is the September 2018 peak.
The bottom part of the chart shows divergence for PPO (which I prefer to MACD) and RSI with lower peaks (red) as the market has recently drifted higher.
Higher level details for target zones and harmonic pattern (Bat) can be found in my earlier charts using a 1 day time period. I have not produced a weekly chart, but the divergence for PPO and RSI is more dramatic on such a chart.
Near term we're positioned for a pullback. The progress and shape will dictate future expectations based on probability. A look at recent history can help guide those expectations for now.
Yes, a nice chart. And it certainly looks like a three with a triangle in the middle. I have a doubt about the rising wedge theory for C because the waves don't overlap. Interestingly at Friday's close 2792 there is a c=a relationship from the end of the triangle. This might be the first part of a larger longer wedge for C. But for that to be valid the market needs to fall hard and sharp Monday for a week or so to create wave B. Whether that will happen remains to be seen. There is a problem with this large ABC theory in that the momentum oscillators (MACD, RSI) are higher in C than A. Anyway a good chart and the ABC with triangle is a good count.
iamthewolf
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@kunsan, Thanks for commenting. The momentum oscillators are lower, as shown. They are even more dramatic on a weekly chart. The diagonal is coming to an end and we'll have an answer soon. I don't think an immediate sharp drop is necessary. A first break followed by a failed upward retest would confirm lower direction. This pattern is quite common when there have been initial, significant, A-D Breadth Thrusts (8/1971, 10/2008, 5/2010, 8/2011). The one in 3/2009 was coming from a very different place after GFC bottom. I'm not buying the media hype as many saw retracements or lower prices afterwards.