Demonstration of the Wave principle in real life KRE
If you want a demonstration of the Wave principle in real life look no longer than KRE.
It is a textbook example of an impulse wave started on 23 March 20220.
Wave almost 61.8% retracement of Wave 1
Extended 3rd wave with a 2.00 multiple of Wave 1
Wave 4 has almost 0.382 retracement of Wave 3.
And the most important one: the entire impulse wave is divided perfectly into golden ratio. 0618/0382
This impulse wave finished on 19th January 2022. Since then the corrective phase has begun.
We have 2 viable scenarios over here
Scenario nr 1.
An ABC zigzag
We clearly have a minor impulse wave down finished in 5 waves that could be intermediate wave (A).-finished on 16th June 2022
Followed by a running flat ABC for wave B. notice the truncation of minor wave C of (B) warning us about the underlying selling pressure in KRE.
And that's precisely what happened in wave (C). That is what an impulse wave 3 of (3) looks like. Fear response appropriate!
The Fibonacci ratio for wave (B) is precisely 0.382 retracement of wave A . The most common one in a zigzag.
Guideline of equality
Waves (A) = Wave (C) at $42.65 normal in a zigzag. So with this interpretation probably one more minor wave down and everything will be roses in the regional banks.
What is not normal in a zigzag is the slope of wave C should be less aggressive. So this brings me to an alternate count.
Scenario nr 2
Because of the slope and severity of this late sale this makes it a wave 3. As I said before has all the marks of impulse wave 3 down in this case.
So the whole correction becomes just waves 123 with waves 4 and 5 still to come to make just wave (A) of the decline.
I will leave it up to you to decide which interpretation is most appropriate.
Legal Disclaimer: The information presented in this analysis is solely for informational purposes and does not serve as financial advice.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.