Whip It – Whip It Good
By
Avi Gilburt
When I think of a b-wave, the word “whipsaw” usually comes to mind. And, as I have said many times in the past, a b-wave is the most variable and unpredictable wave within the Elliott Wave structure. That is why it is so common to see whipsaw during that segment of the structure. And, it is what makes 2nd and 4th waves so treacherous.
So, as we have been tracking a b-wave rally last week, it seemed to have come to a conclusion towards the end of the week, as we seemingly saw a 5-wave decline from that high, suggesting that the c-wave had likely begun.
This reminds me of something I read in Frost & Prechter, which struck a chord in me many years ago. When discussing triangles, they noted that many people often view a triangle as completed well before it actually completes. And, I would assume the same may be said of b-waves as well. And, that may be why they are so notorious for whipsaw.
As the market was approaching the lows today, I posted an alert in the room noting the positive divergence that was evident on the 5-minute ES chart which really should not be present during the heart of a 3rd wave decline. The market bottomed not long after, and began the rally we are seeing right now. In fact, I can just about count a sloppy 5 waves up off today’s low. And, since it did so while moving through the pivot, it has opened the door to the whipsaw b-wave about which I was warning earlier this morning in the update I posted to the full membership.
Of course, as I also outlined in another alert I sent out today, this could be a 1-2, i-ii downside set up. While it is rare to see a wave i of 3 extend towards the 1.00 extension of waves 1-2, due to the sizeable extension that wave 3 would have to attain to get us to our target below for the c-wave, it is not a wholly unreasonable count.
But, as I said, it is rare to see this type of ratio for a wave i of 3. Due to this rareness, I am leaning towards this actually being the [c] wave rally in the yellow b-wave structure. Should we instead break down below today’s low, then the red count comes back to the forefront. But, as long as the next pullback is corrective and holds over today’s low, then I am going to be looking higher for the next few days to complete a more protracted, complex and frustrating b-wave, as presented in yellow. Thereafter, I will be seeking another 5-wave decline to signal that a c-wave decline has begun.
In the bigger picture, nothing has really changed. I still think we are setting up a test of the c-wave box below us over the coming weeks. So, until I see anything that suggests otherwise, I am still viewing that as the most likely path at this time.
