My Analisys Under the Wave Princilpe at Bovespa Mini Futures
Summary on the Elliott Wave Principle Theory Applied to the Ibovespa Index
The Elliott Wave Principle is a form of technical analysis used to predict financial market trends by identifying repetitive patterns in market prices, known as "waves." Developed by Ralph Nelson Elliott in the 1930s, this theory is based on the belief that market prices move in predictable cycles or waves driven by investor psychology and crowd behavior.
In the context of the Ibovespa Index, the Elliott Wave Theory can be applied to understand market cycles, helping traders and investors identify potential turning points and trends in the Brazilian stock market. The theory posits that a complete market cycle consists of five waves in the direction of the primary trend (impulse waves) followed by three corrective waves in the opposite direction.
So by the way, i wanted to share with you this Analisys I've made based on a Logarithimic scale* of the Ibovespa Index Using Elliott Wave Theory Current Market Structure:
Impulse Waves (1-5): The Ibovespa Index has been exhibiting a clear five-wave structure upward, aligning with the broader bullish trend in the Brazilian market. Wave 1 initiated the uptrend, with subsequent waves 3 and 5 showing strong momentum, which is typical in a growing market.
Corrective Waves (A-C): After completing the five-wave impulse pattern, the index is likely to undergo a corrective phase. The corrective waves, labeled A, B, and C, generally retrace a portion of the previous five-wave move.
Key Levels and Projections:
Wave 1: Initiation of the bullish trend, with key support levels at 120,000 points.
Wave 2: Correction phase, retracing at the calssical -61,8% portion of Wave 1.
Wave 3: The strongest and most extended wave, propelling the index above 138,000 points.
Wave 4: by the alternance Guideline, we may have a shallow correction, maintaining support above the 133,000-point mark and a high probability that dont exceed to much the -38,2% region of wave 3. there is a hight probability that we will correct by time not price, that is, based on the law of alternation, we can stay in a correction for at least 20 or 30 days, until we finish wave 4.
Wave 5: Final impulse, based on the fibonnacci relationship, wave 5 use to have a 61,8% to 161,8% of the size of wave 1 on the same circle, potentially driving the index betwin 145,000 and 152,000 points.
I make a disclaimer here, if some war or pandemic scnario resurge or scale, it may interrupt w5, making a trunkaed ou fail to top, ande if it resurge in wave 4 the next wave, we culd see a deep correction braking -61,8% the wave 3, maybe more, but the alternance guideline will be intact, becouse the correction will take a lot of time.
Investment Implications:
Short-Term Outlook: Traders should be cautious as the Ibovespa enters the corrective phase. Selling pressure might increase, providing opportunities for short positions or profit-taking on long trades.
Long-Term Outlook: Despite the upcoming correction, the overall bullish trend remains intact. Investors should consider accumulating positions at key support levels during the correction, anticipating a resumption of the uptrend after the corrective waves conclude.
Conclusion:
The Elliott Wave analysis of the Ibovespa Index suggests that while a correction may be imminent, the long-term outlook remains positive. Investors and traders should closely monitor the wave structure and key support levels to make informed decisions during the correction phase. The theory provides a framework for anticipating market moves and managing risk in a structured manne
