Pennants and Triangles are very similar formations with some key differences. Pennants are considered shorter term, while Triangles are longer term. Pennants are also usually defined by a surge-like flagpole and are usually formed during strong trends. The exit of either formation is also different, where the Pennant exit will move the length of the flagpole, and a Triangle exit will precede a significant movement not defined by a flagpole. Triangles are also defined by an ABCDE formation.
In this scenario the ABC correction of the Minor degree has transitioned from an ABC wave to a Pennant. The problem I have with this formation is that a bullish exit would be defined by the flagpole assuming this is a Pennant and not a Triangle. This would make an insignificant Wave 3, but its not uncommon for Wave 5 to be the extension wave. I am leaving in my predictive 12345 Minor plot for now. Its entirely possible Wave 3 would ignore the flagpole limitation.
Lets assume for a moment that a bullish exit of the Pennant ignores the flagpole limitation. In that scenario I have plotted the end of Wave 3 at the 1.618 fib, which would put it right where the current HA Pivot is, and where I have estimated next months Monthly Pivot to be. This also coincides with the bearish trend-line I have plotted. The confluence of resistance there is a prefect spot for Wave 3 to end.
I would be remiss if I didnt point out the bearish scenario, because regardless of any bullish indications, things can, and do, go contrary to expectation. To that end I have plotted the Sell Signal dotted green line.
As I have mentioned in the last two Analysis', the 0.44 low ended both the Minor and Intermediate impulse waves. While we are seeing the Minor correction wave now, we have not seen even really the start of the Intermediate correction wave. A break above 0.57 would turn an Intermediate correction wave into an Intermediate impulse wave. According to the rules of Elliot Wave theory, we simply cant make any new lows here until after the correction waves are complete.
As far as indicators are concerned, 4H Fisher has turned down and 4H RSI is stuck in a wedge itself... which.. a break would also be signaling.
LOI is a bit tricky. We have been stuck at this 52 million level for a week now. The current daily bar started out bullish, and in fact broke above the previous days bar by a whole 2200, but is now down by about 776k... so were in the same place we have been for the last week. The 4H LOI is also down for the last 3 bars after a 5 bar rise. Basically, nearly all the money that moved into the market after the 0.44 low has now left. This is concerning. I have alerts set up on this chart so I know if money starts moving one way or another. I will update both twitter and here when this happens.
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As always, this is my personal observation and analysis of the market and is not intended to be trading advice.
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We broke down out of the pennant and past the sell signal I plotted this morning.
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There was a sharp uptick, in the 2 million range, for LOI
Bottom targets for shorts?. .40 seems a logical t1.
Exsilium
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@SloppySeconds, I wouldnt be shorting anywhere hear personally... i have no targets for shorts as there is no real support to be plotted beyond pivot points.
braddles69
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on the bright side, good price for your next paycheck...;)
Thanks for the analysis, yes it seems quite tricky to call at the moment, appreciate your work as always...cheers
Exsilium
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@braddles69, np. one more thing, if I look at pivot points, both HA and non-HA we have potential support around 0.36-0.40. This includes this months Pivot Points, and next months estimated Pivot Points. There are no usable trend0lines to use IMHO, the data is just to old back when we were sub 0.40.
Exsilium
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@braddles69, Here is a daily chart with a potential trendline from back in Dec 18. That would put us currently at 0.33-0.34.