Hello fellow traders. In this technical blog we’re going to take a quick look at the Elliott Wave charts of NIKKEI . Break of February 5th peak has made the cycle from the 12.26 low incomplete to the upside. The price structure is calling for more strength toward 22214-23476 area. At this stage short term cycle from the 02/08 low is also showing incomplete sequences. We believe that February cycle can be unfolding as Elliott Wave Zigzag structure, when now doing 3rd leg up © of Zigzag. In the following article, we’re going to explain the Elliott wave Pattern and Forecast.
Before we take a look at the real market example, let’s explain Elliott Wave Zigzag pattern.
Elliott Wave Zigzag is the most popular corrective pattern in Elliott Wave theory . It’s made of 3 swings which have 5-3-5 inner structure. Inner swings are labelled as A,B,C where A =5 waves, B=3 waves and C=5 waves. That means A and C can be either impulsive waves or diagonals. (Leading Diagonal in case of wave A or Ending in case of wave C) . Waves A and C must meet all conditions of being 5 wave structure, such as: having RSI divergency between wave subdivisions, ideal Fibonacci extensions and ideal retracements.
At the graphic below, we can see what Elliott Wave Zigzag structure looks like. 5 waves up in A, 3 wave pull back in B and another 5 waves up in C.
Now, lets’ take a look what Elliott Wave Zigzag looks like in the real market.
NIKKEI 1 Hour Elliott Wave Analysis 02.14.2019
Short term cycle from the 20169 (02/08 ) low ended as 5 waves structure. It’s labelled as wave (A) blue. We believe wave (B) pull back is correcting cycle from the 02/08 low, unfolding as another ABC Zigzag. We got 5 waves from the peak, and current bounce can be only wave B of (B). Another leg down C red is expected to complete proposed pull back. Once (B) pull back completes we should ideally get more strength in wave © red due to incomplete bullish sequences we have in the December’s cycle.
NIKKEI 1 Hour Elliott Wave Analysis 02.18.2019
Eventually we got another short term leg down, and wave (B) pull back can be done with ABC red inner structure. As far as the price stays above last short term low, next leg up © blue can be already in progress. At this stage we need to see further separation from the current low and more importantly would like to see break above wave (A) blue high. That would confirmed next leg up is in progress.
NIKKEI 1 Hour Elliott Wave Analysis 02.18.2019
Recently we got new short term high. Break above the 02/14 peak- (A) blue confirmed next leg up is in progress. Now as far as the price stays above last short term low 20815, we expect to see more strength in © leg up. Proposed leg up should also have 5 waves structure.
Alternatively, if 20815 pivot gives up, we can get more complex structure in (B) blue pull back. In that case (B) pull back would be unfolding as Elliott Wave Flat Pattern.
Keep in mind that market is dynamic and presented view could have changed in the mean time. Best instruments to trade are those having incomplete bullish or bearish swings sequences. We put them in Sequence Report and best among them are shown in the Live Trading Room.
