I’ve noticed a lot of BART moves in the charts lately. These are moves where whales pump the price, then consolidate/distribute, and after a short time dump. The result is a price chart that looks a little like the head silouhette of Bart Simpson, thus the name.
If we are due for such a dump, it should still follow the general rules of EW theory and correct to appropriate levels. But what’s disconcerting is the “suddenness” of these moves. Until market cap is considerably larger than currently, this is what we have to work with in these comparatively small, easily manipulated markets.
We are in the midst of a correction, but what’s not clear is whether or not we’ve finished the correction or we are still in the middle of it. In this post, I take the view that we are still in the middle of the correction, and that we have a little further to drop before resuming the upward trend.
The reasons I think this are several:
1. The wave counts show that we have completed the 3rd wave. A fib. retracement of 0.382 is very common for 4th waves, and this puts us at around a 7k region.
2. The correction thus far has exhibted some of the classic behaviour of an ABC correction, where we would appear to have finished the A leg, and are nearly finished the bull-trap B leg, now ready to commence the C leg. The target of this C leg would also put us somewhere around 7k.
3. This correction would appear to coincide with the right shoulder of an inverse H&S pattern which is not visible in this chart, but if you zoom out a bit, you will see that this right shoulder would be fully formed once it reaches the 7k region.
For these reasons, I believe we are headed to the 7k region before beginning the 5th wave of a broader trend reversal bull run.
Target 1: $7,000 (wave 4)
Target 2: $8,500 (wave 5)