Last week, we touched on 1.5650 being the maximum price zone that would keep this bearish wave 3 count alive. Lo and behold, the nerves were tested this morning as price hung out near 1.5650 for a couple hours.
There were 3 points intersecting near 1.5650.
• Wave c = wave a = 1.5640 • 78.6% retracement of the August to September sell off = 1.5674 • Wave (ii) = wave circle red ‘ii’ = 1.5650
Now that we have sold off a bit from today's high, the wave (iii) picture is still alive. Now, it becomes a test of support and if those support levels begin to break, it will build the case for the wave (iii) picture.
The next levels of support to watch is 1.5550 then 1.5450.
This wave (iii) has significant implications if it is true. Looking at 1.49 or 1.35 as target zones.
Hi. I was looking at a possible leading diagonal wave I and working on a wave II of 3. Here is my chart,
BTCMarket
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Hello Mr.Wagner, although I could understand why shorting 1.5650 area was a great RR as you had bearish divergence, price hitting the daily R1 resistance and encroaching into the R1 weekly resistance as well as coming close to the 141.4% extension what I had trouble with is identifying the methodology for picking the bottom target. We blew well past a 100% retrace where the initial leg got started around 1.517's. Could you kindly shed a little more light onto how you went about picking a bottom target after the top was put in.
Many Thanks
JWagnerFXTrader
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Good question and I would be glad to help.
The 8/25 to 9/4 down move was the first 5 wave move of the same degree of trend and it was approximately 650 pips. Therefore, we likely see at least one more down move of similar magnitude or of a distance that is 1.618x 8/25-9/4. So another down move of 650 is still quite possible that targets 1.50.
Also, take the June 18- July 8 down move and apply a 1.618x extension to it places a target of 1.49.
Now, when using EW theory, I'll also factor in what other wave count possibilities that exist. There is another interpretation that is quite bullish where the bull leg could begin above 1.49. So now we are seeing multiple targets show up in the 1.49-1.50 area.
For the super bearish scenario, take a look at the 2014 down leg from July 2014 to March 2015. This is a 5 wave move that began a down trend. So it likely needs at least 1 more 5 wave down of similar degree of trend. Project the distance traveled from 2014-2015 and project it from the June 18 high and it takes you into the middle 1.30's (near 1.33). I mentioned 1.35 to run a more conservative target for the aggressive bearish count.
ChatchaiVong
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please , update GU
thank so much
JWagnerFXTrader
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We talked about the price action in this morning's US Opening Bell webinar and the 1.5475 level being important. A break below it opens the door for a continuation of wave iii lower. Otherwise, we may see a bounce higher up to 1.5600. Either location can be a spot to sell (1.5475 or 1.5600). Best of luck!
good one.... took similar short with harmonic AB=CD pattern completion & worked out extremely well...
JWagnerFXTrader
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Yes, the AB=CD is rooted in Elliott Wave Theory and is the equal wave pattern (wave c = wave a) mentioned above. A lot of times you can draw channel lines that also give a reversal zone (your point 'D'; my wave 'C'). So in your picture, draw a line to connect your "a" to "c", clone the line and drag to the top of your "b".
Equal waves are suggestive of corrective moves and the entire move is likely to be completely retraced. They are one of my favorite patterns because they eliminate some of the noise of the analysis.