Testing Theory One Moves Market…Last night I posited 3 theories:
1) We are still in Intermediate wave A up
2) Intermediate wave C (and Primary wave 2 up) will end this week
3) The market topped last Friday at the close
I went into theories 2 and 3 last night but wanted to dedicate more time to theory 1 which will occur here. I first placed the Minor waves (yellow) where they likely ended. I believe everything through Minor wave 4 is accurate. The last step is to project what Minor wave 5 would do based on the data from all prior waves. The models provided me the levels to the far right (coloring coding is spelled out in METHODOLOGY below). I next reviewed possible model agreement for time and price. The lengths appeared to remain less than 16 hours in length. Most models were between 7-12 hours. Prices agreed the most at 4415-4419 with secondary agreement at 4430-4434. Prior to today the high was 4418 and today reached a new high at 4421.76. My target window based on this data remained between 4415-4435. I next applied my beta testing derivative model to the data. It provided the white, yellow, and green boxes. The white box contained all historical end points which means the market top will likely occur in this window. It spanned 3-11 hours between 4393-4454. The median data from the derivative model provided the smallest green box which topped at 4423 (just above the current high).
Taking all of these separate models I determined the market top will likely be around 4430 and last 10 hours. I applied this to another program which takes historical data and determines how much each micro wave comprises of the larger macro wave’s final length and movement. I took those median values which the white path pivoted at.
Minute wave 1 was expected to last 1 hour and top at 4371.54, wave 2 was 1 hour with a low at 4352.95, wave 3 was 3 hours long with a top at 4410.65, wave 4 lasted a single hour bottoming at 4386.35, and the final 3 hours were for wave 5 to top at 4426.67. I then plotted the green Minute wave numbers based on the actual market swings thus far. It appeared waves 1 and 2 were pretty spot on. Minute wave 3 likely lasted 2 more hours with a higher top at Friday’s high of 4418.
Considering all of these models it is quite possible the current market top is in. The next leg of the adventures should be down. I will complete another analysis tomorrow projecting where Intermediate wave B could end.
There is still a chance theory 2 from yesterday has occurred or will occur, but the ultimate direction for the next 1-2 weeks should be down.
METHODOLOGY
As a data scientist, I operate a modified wave theory loosely composed of rules and principles from Dow Theory and Elliott Wave Theory. All data is determined from comparing current wave locations with historical wave relationships. I develop theories based on suspected wave locations in time and lay out hypotheses to test. Once the movement occurs, I determine which path played out and repeat the process for the next movement. The light pink levels are based on most specific data, light blue is slightly broader, and yellow levels are the broader set of data used. A red level typically indicates maximum historical move for the current wave throughout the historical data.
Derivative models take the annotated waves from the above methodology and compare specific ratioed-relationships to predict future movement based off of smallest standard deviations in processed models.
