I’m going to throw another Apple wave count at you, which many of the free members, may not understand. It is the dedicated few that have followed me for years that will have a better understanding when I talk about expanded patterns. The potential for an expanded top is always present, as part of any corrective wave, and I think Apples stock pattern can fit this bill with ease.
No, we are not going into some SC, or GSC degree bear market, as nobody has ever confirmed that those two degree levels have completed anywhere, since the market peaks in 2000. Any wave count will not make sense if we don’t know when one pattern ends and another pattern starts. In May of 2016 Apple created its lowest low and then started to soar pushing to a new all time record price of $156.
Isn’t this a No-brainer simple set of 5 waves up? Well… Not after you take a closer look. The entire rally lasted a bit over 12 months before it started to reverse. The probability of a zigzag going to new record highs as part of an expanded pattern is real, if we consider that a bigger diagonal force is also in effect. We do have perfect alternation between the A5 wave and the C5 wave, which is exactly what I like to see in zigzags.
The 5 waves leading to the “A” wave in Minor degree are far bigger than those little skinny 5 wave sequences that soared to new record highs. Zigzags like this can and do show up in any diagonal pattern, and we should always look for alternating patterns, between the two sets of 5 waves.
Another zigzag may start of long and skinny, but then switch to bigger, overlapping set of choppy waves. This keeps us scratching our heads, wondering what’s going on. The thing is we don’t always see them early enough, and even when we do see them, it’s hard to believe that what we’re seeing is actually real!
I deliberately did not start the wave count going down, as it is easy to count as the start of 5 waves and wave 4 has just completed. Since we have 4 short waves, the 5th wave could extend.
My bet is that this starting bearish phase is another diagonal, where our present rally would be a wave 2 and not a 4th wave rally. This makes a huge difference in the count, especially if we need to decline 5 waves in Minor degree.
The horizontal lines are price levels, where 3 of the biggest gaps will get closed. These can all become temporary support in a bigger bearish phase. Apple’s price would eventually have to retrace that entire “A” wave bottom, after which we may land on an “A” wave in Primary degree.
The next bearish phase could all go sideways and down, with no clear 5 wave sequence decline. This would then send a signal that the big wave counts need another review.