I last wrote about Costco here and here. I expected a strong decline, and got a powerful rally to new all-time highs instead (when the S&P did not), only to then get quite the powerful decline I had been expecting. It has created a wild and violent structure.

As things stand now, there are a few things I can say:

• At the actual high in price, there are terrific long-term fibs (from inception) that all touch up there (purple and yellow “c-waves.”) This jives well with the excellent long-term fib strikes on other stocks, such as Microsoft (here).
• That said, if we begin to count the decent from that all-time high, I don’t have much, as I don’t see good fibs from there on the way down.
• Rather, there are good fibs if I begin counting down from the high it made when the S&P 500 topped at the end of last year (creating the good A-B-C in green that composes orange A).
• In any case, it’s making something of a “diamond.”
• If it is in line with the bearish proposals made on the indices, it may be in a B-wave now (Orange). I can see two fibs just above us (orange lines).
• If we stop around here, I would look for a descent for orange C (of Pink A).
• If we keep going up, then I will need to wait until further structure develops before I can better understand the structure.

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Read more “A Glance at $COST”

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.

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My last post on $COST was here. In that post, I identified a near textbook bearish wedge that had developed. And unfortunately, that wedge never broke down and the stock rallied to new highs.

That new piece of information is telling: why didn’t the bearish structure break down?

Answer: the market may not be as bearish as we were expecting here. Given the potential for the markets as a whole to break up sharply here, we can reinterpret the structure on this stock as a large inverse, with the right shoulder probably complete.

Should this break up sharply, the target for this is over $700. We would like to see this “right shoulder” stay close to or above the “left shoulder.” Falling below the 12/2 low will begin to cast doubt on the interpretation.

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.

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Many names such as $PYPL and $TWTR have already suffered steep declines and are due for a bounce soon. It is better to look for shorting opportunities in names that haven’t yet been hit, and I found a good candidate. $COST has rallied in a clear 5-wave pattern leading to its all-time high in December of 2021.

From that peak it has had a sharp initial decline, followed by a well-formed bear flag that I believe is wrapping up now. I believe many of the tech names (such as the ones listed above) will recover soon, in—at a minimum—counter trend bounces, and while those are doing that, many names such as this one will suffer their first far more serious declines.

The minimum target for this coming decline is the top of the orange box, but it may also fall as deep as the lower end of the range, if not even further. I am looking for a 5-wave impulsive decline for intermediate (orange) C.

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.

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