So guys, we're gonna have some fun here. I want to show that this type of analysis doesn't just work in the crypto market! That's why I believe I have longevity doing this, even if cryptos don't work out.
So if you keep up with the equity market, you know that it's been gaining rapidly recently, indication of over-exhaustion of a run. If we look at the 1 Month RSI, it's EXTREMELY overbought. That's why I have 0 allocation in the stock market! It's just way to overbought for me. But I will most definitely increase my allocation when things settle down.
I believe I've counted my waves correctly here, and my indicators confirm it for me. This run has been hitting fib levels very nicely, and it's an indication of increasing speculation within the market (this is why crypto's hit my targets so nicely, almost full speculation!)
The good thing is that If this correction happens, then we can have another very nice run upwards. But after that happens, Ooh boy will I be out of the market. I think the Dow could eventually hit as high as 40,000!
I'm not going to get much into fundamentals, but I follow the market and I can attest to their being WAY too much overvaluation and speculation going on. Small market cap firms are completely overvalued based on the speculation of the Tax bill getting passed. One of my professors stated that a small mkt cap company was paying nearly 70% in taxes!!! Holy crap. Their valuation nearly tripled when the tax plan was just ANNOUNCED. All it takes is a slip of that and we could be headed down. There are also other signs of overvaluation like job reports and inflation rates that aren't meeting FED expectations to the level of growth we are actually seeing as an economy. But that's enough fundamentals from me. I'm just concentrating on the charts. Honestly the RSI was enough for me to be out.
Remember that this is the 1 month chart! It could take another year or 2 before i think it could happen! But this 5th sub wave has hit nearly over a 1 to 1 extension of wave 3, I think its coming soon.
Reminder. These are my OPINIONS, NOT FACT. I'm looking for a downtrend, it doesn't have to crash! I am not responsible for any financial decisions made that are NOT my own. This is a big market and I could 100% be wrong.
Sidenote: My dog Tyrone has a fake gold chain. If i hit my return targets this year I'm buying him a real one haha!
So if you keep up with the equity market, you know that it's been gaining rapidly recently, indication of over-exhaustion of a run. If we look at the 1 Month RSI, it's EXTREMELY overbought. That's why I have 0 allocation in the stock market! It's just way to overbought for me. But I will most definitely increase my allocation when things settle down.
I believe I've counted my waves correctly here, and my indicators confirm it for me. This run has been hitting fib levels very nicely, and it's an indication of increasing speculation within the market (this is why crypto's hit my targets so nicely, almost full speculation!)
The good thing is that If this correction happens, then we can have another very nice run upwards. But after that happens, Ooh boy will I be out of the market. I think the Dow could eventually hit as high as 40,000!
I'm not going to get much into fundamentals, but I follow the market and I can attest to their being WAY too much overvaluation and speculation going on. Small market cap firms are completely overvalued based on the speculation of the Tax bill getting passed. One of my professors stated that a small mkt cap company was paying nearly 70% in taxes!!! Holy crap. Their valuation nearly tripled when the tax plan was just ANNOUNCED. All it takes is a slip of that and we could be headed down. There are also other signs of overvaluation like job reports and inflation rates that aren't meeting FED expectations to the level of growth we are actually seeing as an economy. But that's enough fundamentals from me. I'm just concentrating on the charts. Honestly the RSI was enough for me to be out.
Remember that this is the 1 month chart! It could take another year or 2 before i think it could happen! But this 5th sub wave has hit nearly over a 1 to 1 extension of wave 3, I think its coming soon.
Reminder. These are my OPINIONS, NOT FACT. I'm looking for a downtrend, it doesn't have to crash! I am not responsible for any financial decisions made that are NOT my own. This is a big market and I could 100% be wrong.
Sidenote: My dog Tyrone has a fake gold chain. If i hit my return targets this year I'm buying him a real one haha!
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Also, according to wave theory, we have support at $13,783. If my count is correct, we cannot go past that point.
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Bringing back this idea because I was interested to see what was going on on a smaller level. This is getting scary. I'm not sure how much higher this can push.
Even if the larger scale prediction is wrong, I still think a decent sized correction needs to come here. Our Weekly RSI is at 88. Volume in this past year alone has REALLY kicked, and that's not always a good sign. I think that volume has allowed us to get some extended 5th waves here.
We have also floated too far away from the 55 EMA, and we need to start gravitating towards again. Along with that, our weekly MACD is starting to level, and i can see that Bulls are starting to lose a bit of control here. On the RSI, i have levels of support. If we break each level of support, then we are likely to just go to the next. I will DEFINITELY keep up on this, this is starting to get interesting. I might be on to something here. If I find the daily view just as interesting, then I'll upload my thoughts on that.
Bringing back this idea because I was interested to see what was going on on a smaller level. This is getting scary. I'm not sure how much higher this can push.
Even if the larger scale prediction is wrong, I still think a decent sized correction needs to come here. Our Weekly RSI is at 88. Volume in this past year alone has REALLY kicked, and that's not always a good sign. I think that volume has allowed us to get some extended 5th waves here.
We have also floated too far away from the 55 EMA, and we need to start gravitating towards again. Along with that, our weekly MACD is starting to level, and i can see that Bulls are starting to lose a bit of control here. On the RSI, i have levels of support. If we break each level of support, then we are likely to just go to the next. I will DEFINITELY keep up on this, this is starting to get interesting. I might be on to something here. If I find the daily view just as interesting, then I'll upload my thoughts on that.
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This is getting interesting... Rule of thumb here is that wave 3 can't be the shortest. There is a chance that we are STILL on a wave three and we can extend higher. But lets say this wave count is correct. Then we have to consider the height of the most recent subwave 1. That height would already be greater than wave 3. If this is correct then the MAX height we can reach is the yellow line. If it goes past that we are just on an extended wave and would need to re-evaluate the situation.
Wave 3 hits right above the 1.618 level of extension from wave 1. That line is in green. If we look at this last wave 5, its ALREADY right at that level (in green) above the 2.618.
To me, this does not look good, and our time is limited. But that's only if this wave count is correct.
This is getting interesting... Rule of thumb here is that wave 3 can't be the shortest. There is a chance that we are STILL on a wave three and we can extend higher. But lets say this wave count is correct. Then we have to consider the height of the most recent subwave 1. That height would already be greater than wave 3. If this is correct then the MAX height we can reach is the yellow line. If it goes past that we are just on an extended wave and would need to re-evaluate the situation.
Wave 3 hits right above the 1.618 level of extension from wave 1. That line is in green. If we look at this last wave 5, its ALREADY right at that level (in green) above the 2.618.
To me, this does not look good, and our time is limited. But that's only if this wave count is correct.
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Sorry, the lines did not show.
Sorry, the lines did not show.
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Wow, even the DOW doesn't look good this morning. Got an alert on my phone concerning sovereign debt issues with China. Welp. I really hope my analysis is wrong. I really do. Here are levels that we can find support at. If we break one, we are likely to be headed to the next.
Wow, even the DOW doesn't look good this morning. Got an alert on my phone concerning sovereign debt issues with China. Welp. I really hope my analysis is wrong. I really do. Here are levels that we can find support at. If we break one, we are likely to be headed to the next.
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Great, so with that extra push, the DOW has definitely bought itself more time. We're on that extended wave, and we can definitely push higher around the 27k range. The red box is where we looks for reversal.
Great, so with that extra push, the DOW has definitely bought itself more time. We're on that extended wave, and we can definitely push higher around the 27k range. The red box is where we looks for reversal.
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Holy crap guys... Like holyyyy crap. I went back to go find a different chart that took the DOW back to its original start in 1896 or something like that. Well, the Crash of 1929 is confirmed as wave 2, as it did not go back below the start of wave 1. In the stock market, typically when wave 3 is extended, like this, then wave 5 will look like wave 1. They will typically resemble each other on the log scale when the timeline refers to the super-cycle scale. Wave 3 in 2004 lead to an expanding flat correction before the continuation of the uptrend for wave 5. We no longer have support at 14k and could drop as low as 10k (not likely, but possible). A drop to 18k is now much more likely.
What typically happens is a small downtrend. Then some event causes the velocity to pick up and continue through the corrective period. The major event doesn't always cause the downtrend, but finding the beginning of the downtrend when it happens is the most important key here.
In other words, I think we're F'd. LOL good luck guys!
Holy crap guys... Like holyyyy crap. I went back to go find a different chart that took the DOW back to its original start in 1896 or something like that. Well, the Crash of 1929 is confirmed as wave 2, as it did not go back below the start of wave 1. In the stock market, typically when wave 3 is extended, like this, then wave 5 will look like wave 1. They will typically resemble each other on the log scale when the timeline refers to the super-cycle scale. Wave 3 in 2004 lead to an expanding flat correction before the continuation of the uptrend for wave 5. We no longer have support at 14k and could drop as low as 10k (not likely, but possible). A drop to 18k is now much more likely.
What typically happens is a small downtrend. Then some event causes the velocity to pick up and continue through the corrective period. The major event doesn't always cause the downtrend, but finding the beginning of the downtrend when it happens is the most important key here.
In other words, I think we're F'd. LOL good luck guys!
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Lol no but really guys. If this wave count is correct. We could never see a new all-time high for 20-50 years or more. I'm not even over-exaggerating.
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Guys... What we may have witnessed there was the peak of the Dow. Still a possibility that we go higher, but here are some short term (1-2 month) targets that we could definitely slide down to and find some support.
Guys... What we may have witnessed there was the peak of the Dow. Still a possibility that we go higher, but here are some short term (1-2 month) targets that we could definitely slide down to and find some support.
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Okay, so many many many times, a larger scale consolidation wave takes the form of one of the corrective waves within it. I'm basing this analysis on the correction between 2001 and 2008 just simply because I don think that we get a 30-50 year correction with no upside. But DONT doubt it. Look at other markets around the world. The Nikkei has still not recovered from its previous ATH. Corrections in Grand Super-Cycle waves can take a LONG time. And this is the first time we will see this type of correction. It is scaring to think of, but please, don't let fear steer you away from the inevitable. Bear markets and big corrections are inevitable. Am I saying this will play out exactly like this? NO. This is just an idea that takes previous historical events and repeats it. Because inevitably, history repeats itself. This may not be the top of the stock market, but regardless, these are possible levels that we could eventually see again.
Okay, so many many many times, a larger scale consolidation wave takes the form of one of the corrective waves within it. I'm basing this analysis on the correction between 2001 and 2008 just simply because I don think that we get a 30-50 year correction with no upside. But DONT doubt it. Look at other markets around the world. The Nikkei has still not recovered from its previous ATH. Corrections in Grand Super-Cycle waves can take a LONG time. And this is the first time we will see this type of correction. It is scaring to think of, but please, don't let fear steer you away from the inevitable. Bear markets and big corrections are inevitable. Am I saying this will play out exactly like this? NO. This is just an idea that takes previous historical events and repeats it. Because inevitably, history repeats itself. This may not be the top of the stock market, but regardless, these are possible levels that we could eventually see again.
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First target hit. So I'm going to refrain from saying "Boom" throughout the course of any target and supports. Because we're talking about a lot of money here, and I truly hope my scenario doesn't fall through, because if it does, we're talking some serious fundamental issues to happen in this economy. But it's a part of the game.
Just some opinionated words from myself that I feel some who are new to TA should hear.
TA is never 100% accurate. My TA is a response to price data in order to predict future price patterns. Future price patterns are an indication of market sentiment and economic fundamentals that drive the price. Price is a direct value of market sentiment. The future is not a result of my TA. It is an adaptation of the present based on the past.
Price is as simple as this:
People like it = Price goes up
People don't like it = Price goes down
People are neutral = Price stays sideways
Velocity is as simple as this:
People are excited = High Volume with quick pumps
People are fearing = High volume with quick sell-offs
People don't know how to feel = Volatility
You can TA on a large scale over a long period of time. It does not mean it will happen the way you think it will, but the general idea remains relevant.
Is my TA reigning true, so far? Sure. Will it continue? Maybe so, maybe no. As a day trader you don't create the environment, you adapt to it. As an investor, you find an environment that supports your needs.
First target hit. So I'm going to refrain from saying "Boom" throughout the course of any target and supports. Because we're talking about a lot of money here, and I truly hope my scenario doesn't fall through, because if it does, we're talking some serious fundamental issues to happen in this economy. But it's a part of the game.
Just some opinionated words from myself that I feel some who are new to TA should hear.
TA is never 100% accurate. My TA is a response to price data in order to predict future price patterns. Future price patterns are an indication of market sentiment and economic fundamentals that drive the price. Price is a direct value of market sentiment. The future is not a result of my TA. It is an adaptation of the present based on the past.
Price is as simple as this:
People like it = Price goes up
People don't like it = Price goes down
People are neutral = Price stays sideways
Velocity is as simple as this:
People are excited = High Volume with quick pumps
People are fearing = High volume with quick sell-offs
People don't know how to feel = Volatility
You can TA on a large scale over a long period of time. It does not mean it will happen the way you think it will, but the general idea remains relevant.
Is my TA reigning true, so far? Sure. Will it continue? Maybe so, maybe no. As a day trader you don't create the environment, you adapt to it. As an investor, you find an environment that supports your needs.
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LOL. You guys think Wall Street doesn't panic sell?? This is a 855 point drop in 9 minutes. Guys... That's over $230 BILLION... IN NINE MINUTES.
LOL. You guys think Wall Street doesn't panic sell?? This is a 855 point drop in 9 minutes. Guys... That's over $230 BILLION... IN NINE MINUTES.