Elliott Wave Big Picture

The retracement is definitely happening quicker than I expected, with big scary red candles, but let’s scale back a bit and look at the bigger picture.

Look at my bright blue 12345 primary wave. Even if we retrace to $8300 levels, it’s still quite a bullish retracement level between 0.5 and 0.382 fib for a wave 2.

I watched one guy’s video, he’s from the UK, a quite abusive, racist and arrogant guy; I listen to him because he’s a professional trader and perpetually bearish. I listen to him because it’s important to hear both sides to eliminate bias. He thinks we’re going down to $2800 levels. He released a video recently where his explanation for still being in a bear market is all the red volume we’re getting seems to indicate something in his mind – the opposite of a bull market he thinks. BS. Sort of. Just eyeballing volume bars gives you nothing but bias because you can’t chart that to show any real trend. The OBV on the other hand incorporates volume into a clear trend that you can work with.

Now, coming down from 19k, the 4H OBV clearly shows a flattening before a protracted downtrend. He was right when he said we were coming down from 19k into a bear market. The 4H OBV clearly shows this. HOWEVER, the 4H OBV also clearly shows that since $6500 we are clearly in an uptrend with volume to support it. Since the OBV clearly shows an uptrend, then his TA is BS. We do have volume to support an obvious uptrend, and the OBV proves this.

Now recently in this (what I believe) ABC correction, the OBV has downturned – but it hasn’t yet downturned to a point where we can conclusively say that we are still in the previous bear market – it’s too early to tell. Just like the OBV deviated from the downturn when it bounced off 6k, it can also deviate in an upturn (I believe this ABC correction is showing in the OBV as a deviation from the upturn)

What I have also drawn in bright green is an alternative path: a 12345 down. Some have postulated that we are in a primary ABCDE wave (which I’ve also drawn in green) (which is also bullish since we bounce off $6800 into a bull market again). Is this a possibility? Sure – TAs chart possibilities, not certainties.

We will know the truth by seeing if it bounces off $8350 area or not. There will be a period where the price may live in two waves simultaneously: it may have started primary wave 3, or it might be in a corrective subwave of wave 3 going down, and you will have to examine other indicators to know the truth. The start of wave 3 will be met with a lot more fanfare than a subwave of wave 3 going down – the volume will be much much bigger if we’ve started a wave 3 going up.

The start of a primary wave 3 may also start with a bit of sideways movement before suddenly shooting up, just like it did at $6500. If it does this, then it also reduces the chances that we are in a 12345 wave going down.

We are fortunate that the likely end point of the blue ABC is halfway through the green wave 3 of 12345 going down, so it's easier to see which wave we are really on.