US 30 Bearish Gartley Formation near complete: Bear Flag Channel
Updated
Traders, my bearish colleagues have persuaded me to take a second look at this channel flag. What I found is beary scary.
For months now US 30 have been in correction charting a rising channel. My alternate Elliott wave analysis suggests this is an ABC large-scale correction and the Bear Flag is a long, strong B wave, nearing completion in August. For the bullish hypothesis see link to my prior post below. Since discovering the Gartley, I'm a lot less bullish today...
Latest moves after twin flash crash with notable bearish divergence (higher highs vs lower lows) show a strong bullish move to test top of channel, but the 0.382 Fibo retracement on this week's WXY correction strongly suggests that the correction is not over and we may be due for an even stronger down wave to backfill all the gaps. Thisi sfurther supported by appearance of a rising wedge within the channel (on chart), converging at critical pivot.
Elliott wave charting is notoriously tricky and subjective, it depends entirely on who counts, and how the waves are labeled, and is not always clear. It is a powerful tool but you have got to get the counts right, relooking at that now and will publish a post dedicated to EW. I now wonder if we're in a giant ABC and the (V)(5) completed in January.
Therefore I urge extreme caution in taking any position in this market, either long or short, as we are likely due for consolidative whipsawing, at least, and possibly a real bad surprise coming in Sep/Oct.
Please compare the Gartley in my chart above with Bitcoin- virtually identical pattern and XABCD ratios- if Dow reaches 25917 it's a perfect Fibonacci 0.786 from January (Credit to Steffro for a post "Is Dow Jones About to Go Down? on 30 July):
A double top formation could signal the second bearish down move on the flagpole. The pole is 'A' wave of an ABC Elliott wave, with C leg nearly equal in depth to A. A = -3270; so C could go as low as 22650, but there is Strong Support (Marked SS4 in chart) at 23400 reaching back to Nov 2017.
I have posted a bullish alternative model which may still be possible, but I'm starting to worry that analysis may be based on erroneous wave counts, and I did not look far back enough to spot the Gartley but felt that I was missing something so dug deeper and found this rather alarming relationship.
The appearance of a bearish Gartley pattern in a Bear Flag Channel combined with an exhaustion gap of +300 and price divergence (see The_Unwind post on this) with higher highs following lower lows all point at a sharp selloff in September/October (the usual time of year for it).
I also noted that media keeps calling this "the longest correction on record" when in fact it may well be the beginning of a secular bear market following the longest bull run on record.
The parabolic rise in Jan followed by a second, lower top in August at 0.786 Fibo may be the harbinger of a real bear. I will be watching for the pivots and signals. Good luck!
A virtually identical Bear Flag example with bearish termination, even down to the exhaustion gap up detail marking the last wave up in channel:
google.com/search?q=bear+flag+pattern&safe=active&rlz=1C1AJZK_enUS784US784&tbm=isch&source=iu&ictx=1&fir=Hnj5xcA8XE96zM%3A%2C-g2DK03PRRNw-M%2C_&usg=AFrqEzfArxorm60l8WwGUXn2gQHiDq7djg&sa=X&ved=2ahUKEwjtmarrrPncAhVMMd8KHff9CSsQ9QEwAHoECAYQBA
As always, this is not investment advice and all comments are only intended for education and amusement. Good luck!
For months now US 30 have been in correction charting a rising channel. My alternate Elliott wave analysis suggests this is an ABC large-scale correction and the Bear Flag is a long, strong B wave, nearing completion in August. For the bullish hypothesis see link to my prior post below. Since discovering the Gartley, I'm a lot less bullish today...
Latest moves after twin flash crash with notable bearish divergence (higher highs vs lower lows) show a strong bullish move to test top of channel, but the 0.382 Fibo retracement on this week's WXY correction strongly suggests that the correction is not over and we may be due for an even stronger down wave to backfill all the gaps. Thisi sfurther supported by appearance of a rising wedge within the channel (on chart), converging at critical pivot.
Elliott wave charting is notoriously tricky and subjective, it depends entirely on who counts, and how the waves are labeled, and is not always clear. It is a powerful tool but you have got to get the counts right, relooking at that now and will publish a post dedicated to EW. I now wonder if we're in a giant ABC and the (V)(5) completed in January.
Therefore I urge extreme caution in taking any position in this market, either long or short, as we are likely due for consolidative whipsawing, at least, and possibly a real bad surprise coming in Sep/Oct.
Please compare the Gartley in my chart above with Bitcoin- virtually identical pattern and XABCD ratios- if Dow reaches 25917 it's a perfect Fibonacci 0.786 from January (Credit to Steffro for a post "Is Dow Jones About to Go Down? on 30 July):
A double top formation could signal the second bearish down move on the flagpole. The pole is 'A' wave of an ABC Elliott wave, with C leg nearly equal in depth to A. A = -3270; so C could go as low as 22650, but there is Strong Support (Marked SS4 in chart) at 23400 reaching back to Nov 2017.
I have posted a bullish alternative model which may still be possible, but I'm starting to worry that analysis may be based on erroneous wave counts, and I did not look far back enough to spot the Gartley but felt that I was missing something so dug deeper and found this rather alarming relationship.
The appearance of a bearish Gartley pattern in a Bear Flag Channel combined with an exhaustion gap of +300 and price divergence (see The_Unwind post on this) with higher highs following lower lows all point at a sharp selloff in September/October (the usual time of year for it).
I also noted that media keeps calling this "the longest correction on record" when in fact it may well be the beginning of a secular bear market following the longest bull run on record.
The parabolic rise in Jan followed by a second, lower top in August at 0.786 Fibo may be the harbinger of a real bear. I will be watching for the pivots and signals. Good luck!
A virtually identical Bear Flag example with bearish termination, even down to the exhaustion gap up detail marking the last wave up in channel:
google.com/search?q=bear+flag+pattern&safe=active&rlz=1C1AJZK_enUS784US784&tbm=isch&source=iu&ictx=1&fir=Hnj5xcA8XE96zM%3A%2C-g2DK03PRRNw-M%2C_&usg=AFrqEzfArxorm60l8WwGUXn2gQHiDq7djg&sa=X&ved=2ahUKEwjtmarrrPncAhVMMd8KHff9CSsQ9QEwAHoECAYQBA
As always, this is not investment advice and all comments are only intended for education and amusement. Good luck!
Trade active
There's a bearish butterfly in the Sand P as well. Aiaiaiai...Trade active
Found some other ideas in TV to support this notion. Two authors have proposed an ABC corrective flat wave. This model fits actual quite neatly, and explains why labeling these waves is so frustrating- they are part of a larger complex corrective structure. In the flat correction, wave B terminates near the origin of wave A. For Sand P we are there now, today. US 30 is still 3% under but maybe that's all it gets. Closing all longs and watch/wait for the bearish signals to appear soon.
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Closed all longs into the open got decent prices now there's bearish divergence in indices- look US 30 up .30 SP500 up 0.15 Nas down...still not sure it's time to short look for a clear signal don't get burned!Trade active
Harmonic pattern confirmed 8/21 with new Sand P high and perfect H&S, shooting star; rejection from trendline; failed rally.Trade active
Starts to look scary bad. I think we have topped. Considering short entry. I'm afraid we are not in a fourth going on fifth wave but what appears to be an ABC or WXY, and A/W is getting pretty ugly. If so, the B/X reactionary wave could be vigorous, might retest highs. EW analysis will break down in highly volatile, emotionally charged markets- highly unpredictable, extremely risky. Safest bet now to take no trades until this thing declares itself. Preserve your trading capital!
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