Howl @ The MoonI posted a bullish idea for SPY (linked) where I did not go into detail about the wolfe wave - I am seeing major confluence with EWT, wolfe wave projection, bigger picture downtrend resistance, target via an indicator I love called "ADX Breakout", and time series forecast for both SPY and QQQ . There happens to be a full moon (a SuperMoon actually) on Tuesday Morning, June 14th, so if a Wolfe Wave gets us to intial target around that time that would be interesting. I'm not going to use any moon phase analysis here, but there is something about the moon that does in fact influence investor sentiment, albeit indirectly, though I am not expert on that subject.
This post zooms in on the Bullish Wolfe Wave and is intended for both price action projection near term and education purposes (I don't see many posts covering wolfe waves though they can be $$$ in making seemingly contrarian calls, such as this). In my counts I am using <1,...,5> for the Wolfe Wave and conventional EWC (Elliot Wave count) based on the degree.
Overview of Wolfe Wave (WW) :
Occurance
- An uptrend channel for a bearish Wolfe Wave
- A downtrend channel for a bullish WolfeWave
-Horizontal channels for consolidating price periods
Rules
Wave 3 and wave 4 remained in the channel created by waves 1 and 2.
Wave 1 and Wave 2 are symmetrical with waves 3 and 4.
Wave 5 goes above the trendline created by wave 1 and wave 3 for a bearish pattern.
Wave 5 goes below the trendline created by wave 1 and wave 3 for a bullish pattern.
Regular timings between waves. It means that the time taken to complete one cycle for the waves 1-3-5 is equal.
We can see in my chart that QQQ fits the bill here. There is a signal use to confirm wave <5> called "Wolfe Waves Signals " (Props to @NXT2017 for creating this wizard signal). I like it because it doesn't give frequent signals so when it occurs it is generally the real deal if the chart setup fits the bill.
Confluence
- EW intermediate count w(4) = WW <5>; projected w(5) aligns with the <1-4> projection at the expected time such that there is perfect symmetry with time between waves (see date ranges on chart). This sets up for an initial target of 317.90 by 6/13/2022
- EW primary count circle 3 aligns with the WW EPA @ ETA - EPA is the estimated price arrival, ETA is estimated time arrival and is established as the point in time where the WW support and resistance lines intersect. The level that these intersect is an equilibrium point where supply = demand; notice that E (expected <5>), w(4), and circle 2 all will occur right around this equilibrium level if we do in fact see a bounce from here and this plays out. This confluence gives us a Target of 341 by 6/29/2022 , and this is also the level of an "open long" target using ADX Breakout (not included here, there is already a lot going on didn't want to crowd the chart; also this target is at the 4H time frame, which actually makes sense with the time to target here). My time series ARIMA(0,1,0), p=0.23, upper 80%-95% PI for June 13 is 319.69 - 324.88 so the 317.90 initial target is reasonable, statistically. My upper 80-95% for June 27 is 334.90 - 348.14, so target of 341 is plausible as well.
- The downtrend line through the 11/21/2021 high and the 3/29/2021 high is the red line visible in this chart... so for those that have doubts about WW or EWT you can think of this projection as merely a test of downtrend resistance, which is very plausible considering how much time we have spent down in the gutter attempting to end this corrective wave.
The yellow path is illustrative, expecting an impulse from apprx. yesterday's low (i.e. <5> & (4) & circle 2 on chart) toward the initial target (i.e. (5) & <1-4> resistance). From there we will see an intermediate ABC corrective wave that will also serve the purpose of re-testing the WW upper channel to ensure old resistance has become support. After that I just drew a straight trajectory to the target at 341 (i.e. circle 3 & EPA @ ETA), however, this will either be a diagonal or an impulse - I'll update with expected levels is this plays out to intermediate (C).
Sincerely,
Not Jacob Black
