Bottom in sight; bull trap ahead

12 May 2022

Thus far, Primary wave C is difficult to determine where the internal waves are located. We have either seen the end of Intermediate waves 1 and/or 3 or something else. The projection is for Primary wave C to last 37-46 days while it drops 863.93-1117.41 points. If this range is valid, where should each intermediate wave end? This analysis will determine potential identifiers for tracking the downward movement.
INTERMEDIATE WAVE 1
LENGTH
In general, Intermediate wave 1 typically contributes 11-30% of the larger wave’s length it resides in with a maximum contribution of 53%. This means wave 1 could last 4 to 14 days and up to 24 days at the most. Waves ending in C1 (Primary wave C, Intermediate wave 1) typically make up 11-34% with a maximum of 41%. This means wave 1 could last 4 to 16 days and no more than 21. Waves ending in 2C1 typically make up 11-33% with a maximum of 39.77%. This means wave 1 could last 4 to 15 days and no more than 18 days. Cumulatively, wave 1 could last 4 to 15 days and no more than 18.
MOVEMENT
Through similar considerations, wave 1 tends to contribute 33-59% of the larger wave’s overall movement with a maximum of 104%. This means wave 1 could drop 292.48 to 669.10 with a maximum drop of 1162.11. Waves ending in C1 typically move 26-66% of the larger wave with a maximum at 91%. This means wave 1 could drop 227.64 to 735.48 with a maximum of 1016.84. Lastly, waves ending in 2C1 move 31-77% with a continued maximum of 91%. This means wave 1 could drop 272.65 to 867.64. Using these ranges, Intermediate wave 1 could bottom between 3769.66-4409.66 with middle ground between 3968.2-4409.66.
INTERMEDIATE WAVE 2
LENGTH
In general, Intermediate wave 2 typically contributes 5-12% of the larger wave’s length it resides in with a maximum contribution of 35%. This means wave 2 could last 1 to 6 days and up to 16 days at the most. Waves ending in C2 typically make up 6-12% with a maximum of 25%. This means wave 1 could last 2 to 5 days and no more than 11. Waves ending in 2C2 typically make up 8-15% with the same maximum of 25%. This means wave 2 could last 2 to 7 days. Cumulatively, wave 2 could last 2 to 7 days and no more than 11.
MOVEMENT
Through similar considerations, wave 2 tends to contribute 16-30% of the larger wave’s overall movement with a maximum of 93%. This means wave 2 could gain 139.74 to 339.64 with a maximum gain of 1047.57. Waves ending in C2 typically move 18-32% of the larger wave with a maximum at 73%. This means wave 2 could gain 156 to 358.80 with a maximum of 819.96. Lastly, waves ending in 2C2 move 19-56% with a continued maximum of 73%. This means wave 2 could move 166.05 to 628.57. Using these ranges and considering Intermediate wave 1 will likely bottom between 3968.2 – 4409.66, Intermediate wave 2 could top between 4134.25 – 4602. Stronger consideration and likelihood places the top between 4200 – 4602.
INTERMEDIATE WAVE 3
LENGTH
In general, Intermediate wave 3 typically contributes 27-43% of the larger wave’s length it resides in with a maximum contribution of 66%. This means wave 3 could last 10 to 19 days and up to 30 days at the most. Waves ending in C3 typically make up 29-44% with a maximum of 59%. This means wave 3 could last 10 to 13 days and no more than 27. Waves ending in 2C3 typically make up 26-42% with a maximum of 45%. This means wave 3 could last 9 to 19 days and no more than 20 days. Cumulatively, wave 3 could last 10 to 18 days and no more than 20.
MOVEMENT
Through similar considerations, wave 3 tends to contribute 45-70% of the larger wave’s overall movement with a maximum of 107%. This means wave 3 could drop 396.50 to 780.57 with a maximum drop of 1203.33. Waves ending in C3 typically move 60-87% of the larger wave with a maximum at 99%. This means wave 3 could drop 517.32 to 973.60 with a maximum of 1106.91. Lastly, waves ending in 2C3 move 60-82% with a maximum of 88%. This means wave 3 could drop 519.76 to 921.67. Using these ranges and considering Intermediate wave 2 will likely top between 4200 and 4602, Intermediate wave 3 could bottom between 3278.33 – 4082.24 with stronger consideration between 3680.33-4082.24.
INTERMEDIATE WAVE 4
LENGTH
In general, Intermediate wave 4 typically contributes 5-14% of the larger wave’s length it resides in with a maximum contribution of 34%. This means wave 4 could last 2 to 6 days and up to 16 days at the most. Waves ending in C4 typically make up 5-16% with a maximum of 26%. This means wave 4 could last 2 to 7 days and no more than 11. Waves ending in 2C4 typically make up 6-20% with the same maximum of 25%. This means wave 4 could last 2 to 9 days. Cumulatively, wave 4 could last 2 to 8 days and no more than 11.
MOVEMENT
Through similar considerations, wave 4 tends to contribute 19-34% of the larger wave’s overall movement with a maximum of 85%. This means wave 4 could gain 164.45 to 379.14 with a maximum gain of 958.18. Waves ending in C4 typically move 22-37% of the larger wave with a maximum at 46%. This means wave 4 could gain 191.45 to 416.90 with a maximum of 512.44. Lastly, waves ending in 2C4 move 22-36% with a continued maximum of 46%. This means wave 4 could move 191.71 to 405.76. Using these ranges and considering Intermediate wave 3 will likely bottom between 3680.33 – 4082.24, Intermediate wave 4 could top between 3872.04 – 4487.24. Stronger consideration and likelihood places the top between 3900 – 4300.
INTERMEDIATE WAVE 5
LENGTH
In general, Intermediate wave 5 typically contributes 12-29% of the larger wave’s length it resides in with a maximum contribution of 51%. This means wave 5 could last 4 to 13 days and up to 23 days at the most. Waves ending in C5 typically make up 10-21% with a maximum of 37%. This means wave 5 could last 4 to 9 days and no more than 17. Waves ending in 2C5 typically make up 9-21% with a continued maximum of 37%. This means wave 5 could last 3 to 10 days. Cumulatively, wave 5 could last 4 to 9 days and no more than 17.
MOVEMENT
Through similar considerations, wave 5 tends to contribute 33-56% of the larger wave’s overall movement with a maximum of 90%. This means wave 5 could drop 288.55 to 631.56 with a maximum drop of 1003.99. Waves ending in C5 typically move 40-47% of the larger wave with a maximum at 60%. This means wave 5 could drop 349.11 to 533.56 with a maximum of 668.66. Lastly, waves ending in 2C5 move 40-47% with a maximum of 55%. This means wave 5 could drop 351.73 to 529.15 and no more than 618.49. Using these ranges and considering Intermediate wave 4 will likely top between 3900 and 4300, Intermediate wave 5 along with Primary wave C and Cycle wave 2 could bottom between 3370.85 – 3950 with stronger consideration between 3550-3771.
OVERALL PICTURE
The potential tops and bottoms have been plotted on the chart above for reference. We can see these targets based on the purple boxes. I laid these independent of the movement thus far. When considered with the movement we have observed I have roughly plotted where waves 1 and 2 have now likely ended. Wave 3 may have ended today with the low, however, I dislike calling the day of analysis as an actual wave end point. If 3 did not end, we may drop within the next 2 days to a very short-term bottom. Wave 4 will not be long, but there could be very large moves as another bull trap is set. This analysis does push wave 5 a little further beyond my original May 20 starting point, but it does help narrow the final market bottom. My original target is the green box, while the wave 5 box from this analysis can be found inside of it. This pending bull trap could see the market drop 400+ points inside of less than 2 weeks. A quick drop could cue additional margin calls and be the capitulation stage of this bear market correction.
Hang in there! If you have been following my analysis during this entire correction, you know the end actually is near despite the talks of long term recession. The only thing capable of giving hope and slowing inflation is if the war in Ukraine ends. My money is on something happening to Putin and Russia backing down. This immediate jubilation would provide hope that war-related supply chains for food and energy will be reversible (It won’t be quick but the market does not care). This will begin to correct some inflation which also means the Fed will not have to raise as fast or as many times as originally projected hence keeping borrowing costs lower than they would otherwise rise to by year’s end. But this is just my guess at what bottoms the market. I could be way off.