Wave 3 extended a near perfect 161.8% of Wave 1, we're now in Wave 4, which is typically a complex correction. After an initial ABC down, we're now in a wedge pattern, which can either be an ABCDE corrective triangle or a leading diagonal impulse.
There are two scenarios:
1. ABCDE corrective triangle is near completion and should see a rejection around 3590, this should take us down to the 3495-3500 area, completing the correction. This is a 50% retracement of Wave 3 and at the trendline from previous high's. We should see a bounce here that will begin Wave 5, which should take us to 3700+.
2. Leading Diagonal impulse is less likely but possible, should also see a rejection around 3590, but bounce at 3535 and continue up to complete Wave 5.
Leaning towards scenario 1 right now, I want to add to shorts once we see a rejection in this wedge pattern. Overall sentiment is still bullish and on a macro level I'm positioned long for new all-time-highs.
There are two scenarios:
1. ABCDE corrective triangle is near completion and should see a rejection around 3590, this should take us down to the 3495-3500 area, completing the correction. This is a 50% retracement of Wave 3 and at the trendline from previous high's. We should see a bounce here that will begin Wave 5, which should take us to 3700+.
2. Leading Diagonal impulse is less likely but possible, should also see a rejection around 3590, but bounce at 3535 and continue up to complete Wave 5.
Leaning towards scenario 1 right now, I want to add to shorts once we see a rejection in this wedge pattern. Overall sentiment is still bullish and on a macro level I'm positioned long for new all-time-highs.
Trade active:
The E leg was truncated shy of the target but the plan played out well. Stayed short on the way down until the strong bounce at the 3510-3515 structure. I'm still looking for a 3495-3500 test but staying cautiously bullish now.
Comment:
Comment:
Broke a rule and wanted a leg down to my 3495 target but diagonals only happen at the beginning or the end of a Wave (whether ABC or impulse). In this case, the impulse down after completion of the B wave was the end of the ABC corrective wave.
Trade active:
Stayed long for entirety of today (11/13) and positioned mostly long for next week. We completed a fantastic textbook impulse wave today with Wave 5 being 78.6% of Wave 1+3, given that, I took some SPY hedges as well.
Updated chart:
Updated chart:
Trade closed: target reached:
initial targets were reached, updated idea has been published.