I changed from candlesticks to price line to remove all the noise. Maybe this will provide a better way of applying Elliot waves. There are lots of anomalies as I will describe below. These anomalies are accepted as variations.
1. The trend is a downtrend as you can see and it started with wave 1.
There is an anomaly in wave one. It forms a diagonal triangle as you can see, which is less common than the regular impulse style wave 1.
2. Wave 2 retraces to above 62% of wave 1 which is another anomaly.
3. Wave 3 retraces less than 162% of wave 1 which is the third anomaly.
4. Wave 4 retraces as expected between 38% and 50% of wave 3
5. Now, since wave 3 retraced less than 162% of wave 1, Wave 5 should at least reach 62% of wave 3. This also coincides with the trend support line at price of $3600.
Please note that this is not trading advice. Review the previous ideas and do your own analysis.
If an ABC pattern forms, wave A should not go beyond the bottom of wave 3. Wave B should not go lower than wave 5 and wave C should not go higher than the top of wave 4.
Appreciate your comments
1. The trend is a downtrend as you can see and it started with wave 1.
There is an anomaly in wave one. It forms a diagonal triangle as you can see, which is less common than the regular impulse style wave 1.
2. Wave 2 retraces to above 62% of wave 1 which is another anomaly.
3. Wave 3 retraces less than 162% of wave 1 which is the third anomaly.
4. Wave 4 retraces as expected between 38% and 50% of wave 3
5. Now, since wave 3 retraced less than 162% of wave 1, Wave 5 should at least reach 62% of wave 3. This also coincides with the trend support line at price of $3600.
Please note that this is not trading advice. Review the previous ideas and do your own analysis.
If an ABC pattern forms, wave A should not go beyond the bottom of wave 3. Wave B should not go lower than wave 5 and wave C should not go higher than the top of wave 4.
Appreciate your comments
Comment:
I will only abandon the idea of wave #5 and completely adopt the inverse head and shoulders pattern if the price closes above $11788 and then a break above the neck level occurred with a good volume. For now, I'm still watching closely.
Does that mean that it is going to form the inverse head and shoulders pattern?
Well, I don't know, there is a good possibility. But, it also could a response to the news. Again, if the head and shoulder pattern forms, wait for a break above the neckline with good (very good) volume before you go long.
I tried to rearrange Elliot waves in a different way but this is the only way that doesn't break the rules. If you are a firm believer in the theory, you probably know that wave 5 can be either an impulse (probably not the case here) or Ending Diagonal (which may be the case here).
An ending diagonal is the mirror image of the leading diagonal which is drawn in wave 1(yellow). If that happens with wave 5, we will see price fluctuation that increases toward the end of the wave. Wave 5 should at least retrace 70% of wave 4 which means, we should at least see prices back down to the 7000s.
In the end, this is technical analysis. It tells us the probabilities not what will actually happen.
Good luck