For these new to our work, we primarily use the Elliott Wave Precept (EWP) to forecast the monetary markets, such because the . The EWP permits us to determine the trail the market can probably take based mostly on identified patterns, which should adhere to particular price-based guidelines.
Our from two weeks in the past offers an excellent evaluate of our current dependable work and calls . Since August 1, we now have been in search of a (retracement) rally again to ideally $19300-800. See the pink field (goal zone) in Determine 1 beneath.
Quick-forward, and thus far, the index peaked on August 22 at $19938, 4 days after our replace was posted. Now, it’s again on the crime scene, so to say: $19400s. Thus, we should ask, “Is the countertrend rally over?”
Because the index moved larger the times after our final replace, we raised the Bulls’ coloured warning ranges to focus on ranges beneath which additional upside would change into much less probably. The index has dropped beneath the blue first warning degree and is holding the gray second warning degree. A every day shut beneath might be an excellent signal that the following leg decrease has began, with a break beneath the orange degree at $19450, primarily the second-to-last nail within the Bulls’ coffin.
In our earlier replace, we additionally promised to share that we will rely 5 bigger waves from the crucial October 2022 low into the July excessive, proven in Determine 2 beneath.
Specifically, the rally from the October 2022 low to the November 2022 excessive, adopted by the December low, counts finest as a number one diagonal 1st wave and 2nd wave decline, respectively. From there, the following set of waves developed—a subdividing black W-3 (pink W-v, ii, iii, iv, v), and so forth.
Nonetheless, on condition that the December 2022 decline retraced nearly 90% of the earlier uneven rally, which is comparatively unusual though technically nonetheless legitimate, for a 2nd wave, it might be that the rely begins after that, labeled alt: 1, alt: I, and so forth. In that case, the present decline and rally are a part of a extra important 4th wave.
Lastly, going again to Determine 1, the bears don’t wish to see the index break above final week’s excessive, as that might put 5 (inexperienced) waves on the chart. That, in flip, would imply the August 5 low was the black “alt: 4” low, as proven in Determine 2.
Thus, though our goal zone outlined in early August for this (retracement) rally has been reached, and our most well-liked long-term view is that of a big high being in place since July, the Bears nonetheless have extra work to do earlier than they will declare victory.