Is 9 months correction enough for completion of 32 years bull run?
Started at 3.21 on 1990 and ended at ATH, JPM most probably has completed an impulsive section of a large degree wave cycle and currently is in first leg of 3 legs ABC form of correction.
As shown on the chart by green horizontal lines, JPM has so far retraced back around 0.382 of whole impulsive section which is acceptable but not typical for correction of bull run of this size. More typical Retracements are 0.618 Golden Ratio and 0.786 levels which suggest 68 or even 39.5 USD for JPM bottom !!. For now, I give more chance to 0.618 level (68 USD) which coincides with strong static support related to top of wave (1).
Timing is most difficult and of course least accurate task in charting and technical analysis however, we can extract some clues from chart:
First: So far , we had 9 months of correction which I suppose is not enough at all for 32 years bull run.
Second: if we use time Fibonacci for 32 years impulsive section and consider lowest Fibonacci level which is 0.236 , we reach to 7.5 years !!. Therefore, correction MAY last for some years.
Third: labeled wave (2) (intermediate degree ) correction lasted for 9 years from 2000 to 2009. If our suggested wave count becomes true, we are now in larger degree wave 2 (primary degree) which supports our expectation about multi years correction.
Please note dotted red arrow on the chart is more optimistic than 7.5 years correction related to 0.236 Fibonacci level.
Our wave count confirmation condition is a trade below what is labeled as wave (4). This means there is one bullish case scenario which suggest the decline from ATH to be just the correction of what has been labeled as wave (5). In this case, our suggested wave count needs a major update.
Some important and educational notes:
1. Chart is very similar to NASDAQ. This remind us importance of index analysis.
2. Wave (2) retraced 0.786 of wave (1) a typical one. wave (4) retraced back 0.5 of wave (3) , another typical one.
3. Elliott waves alternation guideline is beautifully observable on the chart : Wave (2) is broad and long lasting wave (9 years) while wave (4) is a sharp one ( just 3 months).
To warp up, If we are a day or swing trader we can use the benefit of lots of ups and downs in the rout of the chart by choosing strong and efficient strategy (Please keep in mind that chart is on monthly time frame). But if we are a long term investor, we need some strong bullish signs and events in the stock and whole market to start investing in JPM, something much more stronger than just one day bounce back or a daily bullish candle.
Hope this analysis and explanations to be useful and wish you all the best.
Started at 3.21 on 1990 and ended at ATH, JPM most probably has completed an impulsive section of a large degree wave cycle and currently is in first leg of 3 legs ABC form of correction.
As shown on the chart by green horizontal lines, JPM has so far retraced back around 0.382 of whole impulsive section which is acceptable but not typical for correction of bull run of this size. More typical Retracements are 0.618 Golden Ratio and 0.786 levels which suggest 68 or even 39.5 USD for JPM bottom !!. For now, I give more chance to 0.618 level (68 USD) which coincides with strong static support related to top of wave (1).
Timing is most difficult and of course least accurate task in charting and technical analysis however, we can extract some clues from chart:
First: So far , we had 9 months of correction which I suppose is not enough at all for 32 years bull run.
Second: if we use time Fibonacci for 32 years impulsive section and consider lowest Fibonacci level which is 0.236 , we reach to 7.5 years !!. Therefore, correction MAY last for some years.
Third: labeled wave (2) (intermediate degree ) correction lasted for 9 years from 2000 to 2009. If our suggested wave count becomes true, we are now in larger degree wave 2 (primary degree) which supports our expectation about multi years correction.
Please note dotted red arrow on the chart is more optimistic than 7.5 years correction related to 0.236 Fibonacci level.
Our wave count confirmation condition is a trade below what is labeled as wave (4). This means there is one bullish case scenario which suggest the decline from ATH to be just the correction of what has been labeled as wave (5). In this case, our suggested wave count needs a major update.
Some important and educational notes:
1. Chart is very similar to NASDAQ. This remind us importance of index analysis.
2. Wave (2) retraced 0.786 of wave (1) a typical one. wave (4) retraced back 0.5 of wave (3) , another typical one.
3. Elliott waves alternation guideline is beautifully observable on the chart : Wave (2) is broad and long lasting wave (9 years) while wave (4) is a sharp one ( just 3 months).
To warp up, If we are a day or swing trader we can use the benefit of lots of ups and downs in the rout of the chart by choosing strong and efficient strategy (Please keep in mind that chart is on monthly time frame). But if we are a long term investor, we need some strong bullish signs and events in the stock and whole market to start investing in JPM, something much more stronger than just one day bounce back or a daily bullish candle.
Hope this analysis and explanations to be useful and wish you all the best.
Comment:
JPM has a fresh low now as we warned to investors.
Comment:
Lets review our JPM analysis !
