Upwards movement was expected. This is how the session began but most gains were retraced.
Summary: Two wave counts today both expect more upwards movement. In the short term, a third wave up may still be beginning. It is reasonably likely that price will reach to 1,275.24. The target is 1,281. Upwards movement is most likely a B or X wave within a larger correction for intermediate wave (2). It is possible but unlikely that this upwards movement is the start of intermediate wave (3).
New updates to this analysis are in bold.
Last published weekly chart is here.
MAIN DAILY ELLIOTT WAVE COUNT
Intermediate wave (1)is a complete impulse. Intermediate wave (2) may have begun. COT supports this wave count; the majority of commercial traders are short (as of 22nd March). While this does not pinpoint when price should turn, it does support a larger downwards trend about here.
The first movement down within intermediate wave (2) subdivides as a three, not a five. This indicates intermediate wave (2) is not unfolding as the most common zigzag, so it may be unfolding as a flat, combination or double zigzag. The first three down may be minor wave A of a flat or minor wave W of a double combination or double zigzag.
If the correction up labelled minor wave B or X is shallow, then intermediate wave (2) would most likely be a double zigzag. Double zigzags have a slope against the prior trend; they are not sideways movements. A double zigzag may end close to the 0.618 Fibonacci ratio at 1,131.
If the correction up labelled minor wave B or X is deep and reaches to 1,275.24 or above, then intermediate wave (2) would most likely be a flat or combination. These are both sideways movements. A combination or flat may end closer to the 0.382 Fibonacci ratio at 1,187.
The channel about intermediate wave (1) is today drawn using Elliott’s technique. Upwards movement may find resistance at the lower edge.
This wave count expects the upwards movement to be a counter trend movement. The trend remains down at intermediate wave degree. Minor wave B or X would be likely to look like a three wave structure at the daily chart level.
HOURLY ELLIOTT WAVE COUNT
Minor wave A or W subdivides as a 5-3-5 zigzag. This structure is complete.
Minor wave B or X must subdivide as a corrective structure. This may be any one of 23 possible structures. The labelling will change as it unfolds. It is impossible for me to give you a road map for a B wave. They are the most difficult of all Elliott waves to analyse, and usually it is only clear what structure they take at the end. There is too much variety within B waves.
So far within minor wave B the structure looks like a zigzag. Minute wave a fits best as a five wave impulse. This means that if minute wave b continues sideways and lower ,it may not move beyond the start of minute wave a below 1,208.33.
Minute wave c must subdivide as a five wave structure, either an impulse or ending diagonal. So far minuette waves (i) and now (ii) may be complete. Price is finding support at the lower edge of the channel about this upwards movement.
If price breaks below the lower pink trend line, that would be an indication that minute wave b may not be over.
This wave count at this stage expects upwards momentum to increase as a small third wave unfolds. The target for minute wave c remains the same: at 1,281 minute wave c would reach 1.618 the length of minute wave a.
If intermediate wave (2) is unfolding as a flat correction, then within it minor wave B must reach to 0.9 the length of minor wave A at 1,275.24 or above. Minor wave B may make a new high above the start of minor wave A at 1,282.68 as in an expanded flat.
If intermediate wave (2) is unfolding as a double combination, then there is no minimum requirement for minor wave X within it. It must only subdivide as a corrective structure. X waves within combinations are normally deep.
If intermediate wave (2) is unfolding as a double zigzag, then there is no minimum requirement for minor wave X within it; but minor wave X should not be deep, it should be shallow.
ALTERNATE DAILY ELLIOTT WAVE COUNT
It is technically possible but highly unlikely that intermediate wave (2) is over. This wave count requires confirmation with a five up on the hourly chart for confidence. A new high is not confirmation of this wave count.
If intermediate wave (2) is over, then it is a very brief and shallow 0.31 zigzag lasting only eleven days (intermediate wave (1) lasted 69 days). The probability of this is very low.
At 1,591 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).
Within intermediate wave (3), no second wave correction may move beyond its start below 1,208.32.
I do not want to give too much weight to this alternate by publishing an hourly chart. The subdivisions would be exactly the same as the main hourly chart.
Click chart to enlarge. Chart courtesy of StockCharts.com.
Price is back within the consolidation zone and overall volume continues to decline. What looked like a breakout on 23rd March was false.
During the consolidation so far, it is still the upwards day of 10th March which has strongest volume. This indicates an upwards breakout is more likely than downwards. This does not support the main Elliott wave count but does support the alternate Elliott wave count.
Downwards movement for the session of 30th March comes with very light volume. The fall in price was not supported at all by volume.
Now a small inside day producing a green candlestick comes with minuscule volume. There was no support for the rise in price during this session.
As consolidations develop, they move price sideways on declining volume and at the end volume is lightest. The almost negligible volume for today’s session may be an indication that the consolidation is mature and a breakout may happen within the next 24 hours. The next daily candlestick may be very long and may come with high volume. Prior volume indicates this is most likely to be upwards.
ADX is clearly declining indicating the market is not trending. ATR is still sideways, which is in agreement with ADX.
On Balance Volume today is flat. If OBV turns upwards, it is likely to find resistance at the orange trend line. This line is highly technically significant; it is long held, horizontal and repeatedly tested. The next rise in price may end when OBV touches that line again.
RSI is neutral. There is room for price to rise or fall.
Stochastics is returning from oversold.
This analysis is published @ 08:06 p.m. EST.