For weeks we've heard various targets for the "bottom" of this correction, some magical place where the pullback from the peak would finally reverse and the bulls would get their mojo back. I aimed for 8K on my previous charts, and as the correction goes on, that target has come into sharper focus. I'm now expecting the next leg to take us to $7,900 (on ) where there is a notable convergence of important overlapping TA features:
- The bottom of this correction channel, which I've now slightly adjusted (compared to my old one) to fit the actual precise wick bottoms of the selloffs on . Previously I had locked the top to the 17.2K peak to set the angle, and the last selloff to 9.2K I had assumed was an overshoot. Now I can see it that the bottom wicks were quite accurate, and I should ignore the top wicks above 17K, as it internally validates many more data points now.
- The line at $7,900 that was defined back in November, on the way up the rally slope.
- The 0.705 OTE retrace of the entire rally from $2,972 to $19,700 lands *right on* that same . Too perfect. Like spooky perfect. Seriously.
- The rising 200MA, which should provide some support after we dropped off the 100MA when we couldn't hold the 50% retrace fib.
- The white connecting the May 25th peak to the Nov 12th bottom (which prophetically touched the not-yet-existing 0.845 level, funny how that works...)
These all converge in a couple days (Feb 6-7), and we just kissed the 0.618 fib on this last drop to $9,350 ( is serious about its fib touches). We need a recharge to fill up the bids again over a few days, so we should see a slow crawl up to the congestion zone around $11,200 again -- then the order books will be ready for heavy dumps taking us on another steep drop -- or we could just tumble down from here, trapped under the old bear line we were so excited about breaking above just recently :P
After hitting the fabled "8K" that everyone's been chanting about, we should see a solid bounce back up to the 100MA, the 11,150 S/R zone, and enjoy more sideways ranging from 10K-11,5K underneath that 50% fib, until finally the folks who went long on contracts start goading the bulls into launching us out the top of this correction channel. Looking for a top on that 3rd wave around 15-16K. Might be setting up for another bull trap and slow slump just like how the 2014 bubble bear market started...