S&P 500 - Are you guys seeing this?This expanding diagonal wave A is completed and potential wave B has yet to finish.
But are we actually heading for another sharp bearish trend for the stock market?
Elliottwavecorrection
The Zigzag Correction of USD/JPYThe chart shows the high probability of the completed zigzag with wave (a) expanded.
Good luck!
Mastering Elliott Wave: The importance of channelingI wanted to share my thoughts on the significance of using channeling technique in Elliott Wave theory when analyzing charts.
To begin, we draw what we call a "base channel," starting from the beginning of wave 1 and extending it to the end of wave 2. This initial channel provides us with a foundation for analysis.
The following occurrence of an impulsive breakout beyond this channel signals the initiation of wave 3. At this point, we create a new "Acceleration Channel" to track the movement of wave 3. If this newly drawn channel is breached to the downside, it suggests the possibility of a correction for wave 3 underway.
As seen in the picture, the original base channel we drew earlier now acts as a support level for wave 4, accompanied by consolidation around Fibonacci levels. This observation has been witnessed numerous times in the past.
When the corrective channel experiences a breakout with above-average volume, it serves as a signal indicating the completion of wave 4. This event provides an opportunity for us to establish Fibonacci targets for profit-taking.
In this particular example, I have chosen to draw the corrective channel only on the final leg of the ABC correction, enabling us to catch the breakout at an earlier stage. A more conservative approach, however, would involve waiting for the breakout to occur after wave B has been surpassed.
Hope this was helpful for those wanting to learn more about channeling and Elliott Wave.
Part [A] Basic of Wave PrincipleElliott Wave background
In the 1930s, R.N Elliott identified the price of the stock trends and reversed a specific pattern. This pattern is repetitive in form and, the patterns have predictive value. He decided to use this pattern (Elliott wave theory) to predict the market. The Elliott wave is not primarily a trading system. It is a detailed description of how the market acts. The Elliott wave is part of technical analysis. Also, the Wave principle is the reassembled form of dow theory.
-Elliott Wave Principle The key To Market Behavior]
Waves in the market?
We all know that price never moves in a straight line. It will neither fall in a straight line nor rise in a straight line.
Price will create highs and lows. And this high and low creates waves. Elliott wave theory is all about counting waves and, we are going to use the Elliott wave to trade the market.
Now, the concept of waves is acceptable for you.
Elliott wave theory is made of 5+3= 8 waves.
Let me show you that structure in both trends.
In bull market ( UP Trend ) :
Figure 1.1 This is the Elliott wave structure in an uptrend. As we discussed, Elliott's wave theory is made up of 5+3=8 waves. Where five waves move with the trend and three waves move against the trend.
In Bear market (downTrend)
Figure 1.2 This is an example of Elliott wave theory in the Bear market. We can see that five waves move with the trend and, three waves move against the trend.
Take a deep breath, I know you have lots of doubts in your mind. Let me solve some.
1. Elliott wave theory works in any time frame.
2. These 5+3=8 waves will give us a market edge. It will provide strong trends & trend reversals.
3. The accuracy of Elliott wave theory is 84% of you are using the wave principle correctly.
Practical Example of Elliott wave theory :
In the Bull market :
Figure 1.3 This is the TATA MOTORS 4 hour timeframe chart. I used bar charts because It is easy to recognize Elliott's waves in bar Patterns. Well, it works for me to recognize if you feel that you can recognize patterns in another chart, go ahead with bar charts!
In Bear Market:
Figure 1.4: This is the ITC daily time frame chart. It shows the beautiful Elliott wave structure in the Bear market.
Elliott wave structure :
Now, we all know that Elliott is made of a 5+3= 8 wave structure. So, Let's start getting into it!
To understand the wave principle, we have divided the wave structure (5+3=8) into two Phases which are an Impulse phase/structure & a corrective phase/structure.
Figure 1.5 This picture illustrates Two phases of the Elliott wave principle.
The impulse phase is made up of 5 waves and, the corrective phase is made up of 3 waves.
Figure 1.6: This picture divides the wave principle into two phases.
1. Impulse phase/structure ( which includes five waves and, which moves with the trend you can see in bull market impulse phase is going upward and in a bear market, impulse phase is going down which is directional move.)
&
2. Corrective Phase/structure ( which includes three waves and which moves against the trend, you can see that in bull market corrective phase is going downward and
In bear markets, the corrective phase is going upward, which is a counter-trend move.
Figure 1.7 , Elliott wave has 2 phases. motive/Impulse phase ( directional move ) and corrective phase(counter trend move). We can divide these 2 phases into two types of waves. Impulsive waves and corrective waves.
Let’s zoom in on the impulse phase to understand the underlying structure and wave behavior.
Motive/Impulse Phase :
Important things about the impulse phase
1). Motive/Impulse phase is a Five wave structure that includes wave1,2,3,4 & 5.
2). motive/Impulse phase is a directional move ( moves with the trend.)
3). The Ending point of the impulse phase is the starting point of the corrective phase.
4). motive/Impulse structure is powerful than corrective structure.
5) Impulse phase can divide into two types of waves
i) Impulse waves: 1, 3,5 ( move with Trend of impulse Phase )
ii) Corrective waves: 2,4 ( Moves against the trend of Impulsive Phase)
Let me give you a quick understanding because we are going to cover these waves in-depth,
Impulsive waves are trend-following moves. We can find this type of wave structure in both phases. Impulsive waves create trends. Impulsive waves are (1,3,5,A,C). Corrective waves are counter-Trend moves. We can find this type of wave structure in both phases. Corrective waves provide pause to continue the trend,
Corrective waves : (2,4,B)
Motive/Impulse Phase in Bull market
Figure 1.8(A) , wave 1,3,5 is an impulsive wave of impulse phase because The trend of impulse phase up and, Impulsive wave are following the trend and heaving upward move.
And
wave 2,4 is the corrective wave of an impulse phase because the trend of the impulse phase is up but, the corrective wave is moving down, which is against the trend.
Figure 1.8(B) , wave 1,3,5 is an impulsive wave of impulse phase because the trend of Motive/impulse phase down and Impulsive wave are following trend and heaving downward move.
And Wave 2,4 is the corrective wave of an impulse phase because the trend of the Impulse phase is down but, the corrective wave is moving upward, which is against the trend.
Corrective Phase/structure :
Important things about the impulse phase
1). The Corrective Phase is a three-wave structure that includes waves A, B, C.
2). The corrective phase is a counter-trend move ( moves against the trend.)
3). The Ending point of the corrective phase is the starting point of the Impulse phase.
4) correction phase can divide into two types of waves
i) Impulse waves: A, C ( move with Trend of correction Phase )
ii) corrective waves: B ( moves against Trend of correction Phase )
Corrective Phase in a bull market:
Figure 1.9(A) : wave A, C is the impulsive wave of the Correction phase because the trend of the correction phase is down and Impulsive waves are following the trend and heaving downward move.
And
Wave B is the corrective wave of a Correction phase because the trend of the Corrective Phase is down but, the corrective wave is moving upward which is against the trend.
Figure 1.9(B): wave A, C is the impulsive wave of the Correction phase because the trend of correction phase Up and Impulsive waves are following the trend and heaving Upward move.
And
Wave B is the corrective wave of a Correction phase because the trend of the Corrective Phase is Up but, the corrective wave is moving down, which is against the trend.
Impulsive wave structure:
1. Impulsive waves are directional moves that are bigger than corrective waves.
2. Impulsive waves create trends.
3. Impulsive waves are subdivided into five waves.
( that means wave 1,3,5, A, C which moves with the trend will have five sub-waves.)
4. Impulsive waves are easy to recognize.
(Impulsive waves can also be called motive waves)
5. Ride of impulsive wave can give us a high probability trade setup with high Rewards
We are going to cover impulsive wave formations in the next part.
(diagonals,extensions,Impulse,Truncation)
Figure 1.10: As we discussed, Impulsive waves subdivide into five waves.
Here wave 1,3,5, A, C has five subwaves which you can see in the chart.
See you in the next part.
@forextidings
How to Count Waves Using Chart Patterns?We can count waves using traditional patterns like Head and shoulders, Double Top and Bottom,
Triangle, cup & handle, etc. This article is about how you can count waves by identifying chart patterns.
I have covered Three chart patterns in this article,
1) Triangles
2) Head and shoulders
3) Double Top and Bottom
1) Head and shoulders:
In addition, the two lows formed when the price failed to rise and fell back down were basically at the same level. The horizontal line is often referred to as the "neckline" When the price fails to fall back for the third time neckline will break. So "head and shoulders" was officially established.
Changes in volume with head and shoulders:
During the formation of "head and shoulders", the left shoulder has the largest volume, the Head has a slightly smaller volume, and the right shoulder has the smallest volume. The phenomenon of diminishing trading volume shows that when the stock price rises, the chasing force is getting weaker and weaker, and the price has the meaning of rising to the end.
Operation plan after the Head and shoulders appear:
When the head and shoulders formed, you can decisively follow up the short order. The formation of the head and shoulders indicates the beginning of a new round of decline in the market, and the minimum drop is the distance from the head to the neckline. The profit is very substantial. Therefore, studying the formation of the Head and Shoulders is also a necessary analysis process for band enthusiasts.
Wave Count:
The left shoulder: wave 3/A.
The first touch on the neckline: wave 4/B
Head: wave 5/C
The second touch on the neckline: wave A/1
The right shoulder: wave B/2
The ending point of the right shoulder: wave C/3
2) Triangles:
These are the most commonly used triangle patterns. In this motion, we are going to understand the triangle in terms of the Elliot wave. We'll be talking about the classical triangle pattern in an upcoming educational series.
Wave Count:
A triangle forms in corrective waves. There are Four corrective waves in Elliott wave theory. The corrective waves are 2,4, B, and X.
There are four waves in a triangle which are A, B, C, D, E.
The starting point of wave A of the triangle is the ending point of impulsive wave 1/3/A/W. After the completion of wave E of wave 1/3/A/W, the Impulsive wave will initiate.
3) Double Tops and Bottom:
In the chart, you can sometimes see the stock price fluctuations. The stock price fell back after reaching the highest price. After some sorting, it rose again to near the previous stock price level and then fell back. Two "normally highs" The high point is formed on the circuit diagram and will not be seen again in the short term.
Wave Count:
In a Bull market, The first Top of the pattern represents the completion of the impulsive wave. The ending point of the Impulsive wave is the starting point of the corrective wave.
I started the wave count from the first Top and labeled it as A, B, and C waves.
In a Bear Market, The first Bottom of the pattern represents the completion of the impulsive wave. The ending point of the Impulsive wave is the starting point of the corrective wave.
I started the wave count from the first Bottom and labeled it as A, B, and C waves. After wave C is complete, we can ride the impulsive waves.
ADAUSD | Wave projection | Double combination - Bulltrap D-waveA potential double combination scenario with double zz - X - triangle ABCDE with a false head & shoulders breakout D wave - could retraced as high as 0.786 fibonanci of previous wave and possible E-wave coming for liquidity zone.
A safer long entry @ wave D breakout after liquidity targeting at the next liquidity zone +110%.
Good Luck
Render's Rally ending? Trading Insights & Retrace AspectsThe rally in Render appears to be reaching its conclusion. Over the past few months, Render has been an intriguing trading token, outperforming BTC by surging from 0.9 to its monthly resistance level of 2.93 (Bybit).
Based on my wave count analysis, it seems that we are approaching the end of the rally at this resistance point. I observe a potential ending diagonal pattern, consisting of a fifth wave within a fifth wave within a fifth wave, characterized by declining volume. A final upward push towards the monthly resistance, accompanied by RSI divergence, could serve as a short trigger. Alternatively, a more cautious approach would be to wait for the breach of the extreme point of wave 3 within the ending diagonal.
If a retracement occurs, the target could be a return to the previous fourth wave of a lower degree. This area coincides with a monthly resistance level, Fibonacci 0.618 retracement level, and the fixed range point of control for wave 4 according to my highest count degree.
In conclusion, the success of this swing trade will depend on the extent of the upward movement before encountering divergences or a reversal. If realized, this trade has the potential for a risk-to-reward ratio of approximately 3.85.
I will closely monitor Render for further signs of weakness, which could present a short-selling opportunity, or to observe if it breaks through the monthly support level accompanied by notable volume
SMR, an algorithmic correctionSMR has been in a steady and predictable decline for about 9 months now. We recently just observed another rejection from the top of the descending macro wedge trend line, and there is currently a fight around the $7.70 to $8.00 range. A strong break below the $7.60 level may have enough momentum to push the price to a new low and I will look for support at the psychological support level of around $7.00.
I am using Elliot Correction waves here to illustrate the correctional structure playing out, and local highs and lows have been reliably trading within the larger descending wedge formation. I believe an upside break of the wedge will occur at some point, but for the time being the downtrend is still intact.
Wave C Movement in #ATOMAfter the 5-wave correction of ATOM# and the rapid movement of A, the correction of B has taken place.
I expect price to complete wave C by September 4th .
Otherwise, the analysis is invalid.
BTCUSD | 1st ABC Correction A-wave Target ProjectionA potential bullish scenario : 1st ABC correction zigzag pattern with upcoming wave 5 of c-leg targeting 0.382 retracement of previous 5X motive wave move between 24-25K
However, wave 1 and 3 in c-leg are extended, wave 5 can be the shortest wave and truncation is still possible.
Action: A safer long entry can be placed when breakout downtrend line 2-4 or above wave 4 of c -leg, targeting the upper resistance of the bull flag.
Always trade with affordable risk and respect your stoploss!
WBD | Wave Analysis | Downtrend breakout | Inv. Head & ShouldersWBD : Wave projection - weekly price action and chart pattern analysis
> The downtrend channel 5 motive wave breakout with a possible valid inverted head * shoulders pattern formation
> A potential ABC correction uptrend pattern - a typical wave b bull flag pattern for right shoulder pattern targeting at 0.618 - 0.786 fibonacci retracement of wave a.
> If successfully breakout neckline - TP wave c at 1.618 extension of wave a near MA200w zone +100%
> SL @ IHS position -20% downside
> Indicator : RSI week bullish divergence
Always trade with affordable risk and respect your stoploss
Good Luck
BTCUSD | Wave Projection 123 | Classic Reversal Move CUP&HOLDERBTC classic reversal move > Inverted head & shoulders turning into cup&holders
Target cup&holder at the same level of previous mega falling wedge
Possible a bull flag move forming holder pattern at 0.5 fibo retracement zone
SHORT ENTRY NOW! and Long at bull flag confirmation pattern breakout TP +70%
XAUUSD FORECASTThere's still a chance Gold forming Flat Correction (Wave 4), expect retracement at 88.6 level to go Short.
Disclaimer ON.
BEM | Leading Diagonal Pattern Projection - Wave B CorrectionA possible ABC correction after finishing mega leading diagonal wave pattern:
Wave B target 0.5 - 0.618 retracement of wave A and EMA 20 week resistance
A possible false breakout EMA200 week
Wave C - Targeting 0.786 fibonanci zone of major Wave 1
Bearish view on the GBPAUD below 1.8500It looks like the GBPAUD ended a five-wave rally yesterday at 1.8493, which should be followed by at least a three wave correction that could take prices to 1.8193 and 1.8000. In addition to the wave-count, there is a clear negative divergence between prices and RSI that confirm our view. A break above 1.8500 will negate this count.
9988 | Alibaba - Wave Analysis | Inverted H&S TFW Target +100%Wave analysis and chart pattern projection:
> A possible valid inversed head & shoulders pattern in weekly timeframe, potentially 2-wave correction and rebound to retest the neckline resistance for a strong breakout.
> TP Inverted H&S @ 1.618 and 2.0 fibonacci +100+%
> MACD doubled bullish divergence signal golden cross above baseline indicating bullish move.
Elliott Wave sideways complex idea.Still didnt tag the golden zone after the Impulse on Near. Still no impulsive structure after the first retrace which leads me to believe that there is mor low to come. Happy to be wrong.
BTCUSDT | TFW Wave Analysis | Inverted H&S Retesting Neckline?The current uptrend wave is potentially a leading diagonal with a valid inverted head & shoulders reversal pattern breakout - now with a DOJI candlestick this week, the price could retrace to the neckline level 25k, watchout for a false breakout then most likely to breakdown - SHORT ENTRY to the neckline level and EMA200 week -20+% downside
(A valid inverted H&S consists of a strong downtrend with at least twice length of the head & shoulders pattern and massive volume breakout)
INFY Short ....Ending Diagonal Pattern Just For Education Purpose .... Ending Diagonal Pattern IN INFY ....Short with SL 1621
EURUSD ForecsatEURUSD Forecast
The correction EURUSD started in September 2022 is not over yet. We are forecasting that we only have finished the (A) from the (A)(B)(C) of the correction in the intermediate degree (blue) to end wave 4 (green). Therefore we still need to see the price making higher highs from the current position.
We are forecasting this option as the most provable at this point because wave (A) seems like a clear motive wave for us. We clearly see 5 waves forming (A). That means that, as wave 4 in green (primary degree) has to have a corrective structure, there is still another wave up missing.
What to do?
We currently can not look to enter the market. We should be patient and wait for the price to break the 1.1033 level before looking for short-term buying opportunities.
Alternative scenario
We forecast that wave 4 in the primary degree (green) is not over yet. However, until the price does not break the 1.1033 level, we cannot discard the scenario where wave 4 is already over. If this is the case, the price will resume the downtrend directly, making lower lows.
Unfortunately, today we cannot give you a trade idea for the EURUSD, but we hope you understand what the asset situation of the EURUSD is.
As always, we will keep you updated
Please remember to do not to risk more than 2% of your account on each trading idea
