Loading ...Stocks – EW
The S&P 500’s 4-hour chart allowed us to focus on the structure of the H1 2022 bear market. We labeled it as a complete W-X-Y double zigzag correction, where each wave is a simple a-b-c zigzag. A complete W-X-Y correction between 4819 and 3637 meant the bear market was most likely over. In other words, higher levels could be expected as long as the bottom of wave Y at 3637 remained intact. Two weeks later now, that invalidation level is not only far from danger, but stocks have risen relentlessly, ignoring all the bad news. 3637 was never breached. While it is still to early to declare the end of the 2022 bear market, history tells us stocks turn up long before a crisis is actually over.
“A complete W-X-Y correction between 4819 and 3637 meant the bear market was most likely over.”
Not at all.
First, the WXY could add up to larger A, now in B, with C down to follow this winter.
There are clues I follow suggesting this is the most likely path. 4 down being done is also possible, but not most likely, IMO.
Second, if the correction was over, then (given other stuff) we’d be looking for a 5th wave up. The rally would be impulsive. Its not. Not clearly anyhow. But there’s a hitch. What if W5 (as the final rally from 2009) up was an ED, then abc’s up as 1,2,3,4 and 5 in a wedge would be EXPECTED in a final 5th. So maybe its this variation. And bulls are right, for now.
Ironically, gifted chartists are STILL tracking bear now still counts, with VALID ideas.
Unfortunately, EW can only present you with a range of possibilities which you must then narrow down. Its not a crystal ball.
How much of the last few days are short covering in low liquidity, and how much are fresh longs? I have no idea but that’s the question I would seek an answer to.