The market provided plenty of whipsaw today, but EW helped us navigate the volatility pretty well. Once price dropped below the pre-market low at 4456, it signaled that the bounce into yesterday's high was only 3 waves, and therefore likely corrective.Then the next question assuming a corrective b-wave bounce was if it completed already or did it want to fill out as a wider flat. Support for wave B of b in the wider flat was cited between 4445.50 - 4437.75, which was undercut slightly before turning strongly back up into the close.
Important near-term inflection point for Bitcoin approaching at ~49k. Above there begins to favor a wave ii bottom in place as shown in blue. Rejection from there could lead to another leg lower in a deeper wave ii likely targeting at least 41k (red).
The market will likely close negative again today, still sliding lower off the high made last week where it looks like 5 waves up completed from the August low. Therefore, price continues to cooperate with expectations for a local top in place and at least a corrective pullback targeting standard retrace support in progress. Under that assumption, I lean towards today's low being a slight extension of an initial A-wave down from last week's high, and price currently working on a B-wave bounce.Price has already reached the .382 retrace of the A-wave down, enough to consider the B-wave potentially complete but it seems pretty shallow and short-lived.
The market continued to slide following the open, making a new low on the month this morning. Therefore, price has provided the initial indication of a local top potentially forming, following what still looks like a very reasonable 5 waves up from the August low complete into last week's high.If the 5 waves up is the start to another setup for further extension higher, then a corrective pullback as a b-wave or wave ii has room to retrace back to the standard .382 - .618 support between 4471.25 - 4423.75. A break below there is needed to otherwise open the door to a more significant top in place and larger degree correction looming.
Bitcoin has been hovering below the 50k pivot for roughly a month now, likely coming close to decision time for either a direct breakout or pullback as wave ii of 5 first. If a direct breakout, can easily target ~60k next as wave iii of (iii).
Personally viewing this move in Bitcoin as the 5th wave up to complete wave i of 5. Can still stretch a bit higher near-term before completing and pulling back in wave ii. Above 50k opens the door to being further along in wave 5 of (3).
I was wrong about the (i)-(ii) off the prior June low, with the break below there forcing a deeper 4th still in progress. The larger degree count remains intact though, and technically has room down to 24k now (not necessarily expecting that but possible) before things get really dicey.
My last update on Bitcoin suggested the possibility of a truncated 5th, which it looks like what happened. Many people seem to be expecting another weekend of crypto carnage, but I am seeing the potential for the opposite and a (i)-(ii) off the June low.
Starting to look like the recent consolidation in Bitcoin was a 4th wave triangle and price is now filling out wave (v) of c. I am not convinced that it needs much more than a double bottom for the 5th wave and could even truncate. Many other cryptos are holding up much better in comparison.
I remain very skeptical that TSLA completed all of primary wave 4 already and is heading to a new all-time high from here. If this bounce is now wave 4 of (C) in blue, then 642.10 is ideal fib resistance to hold. Above there opens the door to the wider flat (B)-wave in red.
The crypto carnage this morning resulted in bitcoin spiking down to the lower end of the target region for wave 4 of (3) at 32k, so I am definitely considering that could have been the bottom. A break back above 41k would be the first indication of such.
After drifting higher during the overnight session to retest the high made shortly after the Sunday open, the ES proceeded to trend down today into the afternoon low which slightly undercut yesterday's low. Therefore, we are still left without 5 up from last week's low on the SPX chart, and today's price action seems to better support the potential for an ending diagonal off last week's low instead.If we are indeed dealing with an ending diagonal, the next question is whether it has completed already into today's low, which is possible as shown on the chart in red.
The market remains negative on the session heading into today's close, but so far the SPX held where it needed to if this pullback off Friday's high is a micro 4th wave within an impulse off last week's low. Technically a micro 4th wave has room down to 4135 SPX if needed, but odds are best if today's current low holds.Otherwise, below support for a micro 4th wave and the next bullish option would be an ending diagonal off last week's low shown on the ES chart with price currently pulling back in wave ii of the ED. As mentioned in the morning update, support would then be 4121 - 4085.75.
My last bitcoin post about a month ago cited a price target of 42k - 32k for a 4th wave pullback. Price is approaching the upper end of that target zone but has plenty of room to stretch lower if needed. Even if the upper end of support does hold it may just be wave a of 4.
ES got the lower low pre-market that I was looking for into fib support for wave c of (iv). I am firmly in the camp that we have a local bottom in place and price is now starting wave (v) of v with ~4330 as the overall ideal target.
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