Geometric Thinking Update
By Jim Fredrickson
SAME DAY UPDATE: While I was writing this piece, the chart fell just shy of the 78.6 resistance the blog mentions as a potential turn. It is too soon to tell if that was the end, or not. But suffice to say, it could be…
The picture above, showing the break of that trendline made me question my wave count. As a result, I went back to the basics to see if and where I may have made a mistake. But, as you will see, the base of my count still seems solid. I truly hope that I am not suffering from cognitive dissonance. But, in case I am not, I want to get this out there.
It all starts here. That Dec rally that started this run looks like a wave of 3. If its 3 waves it is counter-trend. If counter trend, it means that the larger trend remains down.
But how can that be, given the massive rallies of late, and that trendline break shown above????
Maybe the problem is that the daily bars are hiding crucial waves, preventing us from seeing 5 waves up? So let’s look at smaller time frames, starting with BTC240:
It still looks like a 3. Lets go all the way to 30 minutes:
The 30 minute chart could perhaps see that 1st wave laveled a 5, but the waves do not subdivide, and that would make the 2nd wave a wave 3? Hard to swallow, unless it is a wave 1 of of the very large waves that follow.
If however that is the case we should see waves of 5 all the way up to the 8450 high. Do we?
This is the final wave of that powerful run to 8450. It is also a 3! Every wave up to 8450 that I can see, seems best labeled a 3.
I imagined that the 8450 high was finally the end of a wave 4. The sell-off that followed suggested I was correct.
But then the rally that followed was too ferocious to strongly support my conclusion. Clearly the rally was not over yet.
So, assuming the rally to 8450 was corrective, was it just wave A of a larger ABC? Was the sell-off a wave B and the current rally a C wave ending the pattern? Lets look at the waves beginning from the dramatic surge off the recent low:
Here again we see a 3. Are we starting to see a pattern here????
If this is a very large ABC pattern, what might we expect?
ABC rallies often see a relationship between A & C waves such as 1:1 or 1 : 0.618, etc.
If this pattern will see a 1:1, then 9254 is a target. If 1 : 0.786, then 8916 is a target.
There is a time event today, around midnight (China time).
Throwing a pitchfork on there shows an intersection of the time event, the PF 0 line, and 9254.
But it also shows (almost) an intersection of PF 0.5 line and 78% 8916.
So the PF inconclusive…
But when we add a Gann Square we see arc resistance at the time/price of 9254 ~ midnight tonight (China time).
Putting it all together, my guess is that we will see a monster blow-off rally carrying us all the way to ~ 9254.
If this analysis is correct, this monster rally will end rather soon.
If my suspicion that institutional money engineered this fomo circus to maximize their selling at the highest possible price before it gets driven way down, then I am awestruck at how utterly successful they will have been. They may be heartless, soulless creatures who enrich themselves by bankrupting noob traders seduced by forecasts of 50k by the end of the year, but they seem to be utterly brilliant in their execution of a nefarious plan.
We shall see soon enough. Good luck and happy trading…
“Every wave up to 8450 that I can see, seems best labeled a 3.”
This is not financial advice, just words of wisdom from someone who has seen it all over the past few decades. Do with it what you will. Happy Trading!