The Overnight Liquidation Break Was a Crucial Piece of Information: Here’s What I Think it May Mean

To reiterate my view: I believe we are in a correction, and am interested in discovering its conclusion. Now, this weekend, I discussed the possibility that the S&P 500 may only be roughly half way through the correction, indicating that we may have a large drop ahead of us. That’s still possible, but it’s becoming less likely in part because it was predicated on Bitcoin entering a triangle of primary B-wave degree. And a B-wave sits in the middle of a move, not at its end.

However, the S&P now does not appear to be in a triangle as I was exploring, which may mean that bitcoin is not in a B-wave triangle, but rather a 4th-wave triangle. And those happen closer to the end of a move, rather than in the middle.

In other words, instead of looking like this:

BTC

It may actually be this:

BTC

And Bitcoin can go down to the January lows without also taking the whole equity ship into the bath with it.

Now, I’m just exploring possibilities here, and trying to respond to market generated information as it comes to me. And I think it’s important to accept that equities failed to replicate a triangle formation here. And instead, this whole move off the February low just looks like a beautiful 1-2. I know it sounds ridiculous given the lack of any persistent bid, and I could be wrong. But the structure just looks too good to me right now. A leading diagonal 1 is typically followed by a very deep 2, and at least for the time being, the overnight break and sharp reversal looks picture perfect to me.

The move down from the March 3rd high is clearly “corrective,” full of overlapping waves. And if we’re correcting down, then the trend here is up. At least that’s the theory, and we will know soon. I present some targets here for minuette (orange) 3 and minor (green) 3. If we start heading in that direction, I will certainly gain even more confidence in this count, and a break below the February 24th low will invalidate this.

ES

I know it’s been a painful and difficult market. One reason that has been so is the sheer wave degrees we have been working in. This correction is likely of cycle degree, with each leg consisting of primary degree sections. These are just massive market structures unfolding. But, I think there is a growing possibility that they may have come to an end.


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