- Major Wave 1: Starts in early April.
- Major Wave 2: Deep corrective move that cleans out the excess.
- Major Wave 3: Strong vertical impulse — already completed.
- Now we are either in Major Wave 4 or entering Major Wave 5.
🔹 Key Point: I’ve projected the 61.8% and 76.4% Fibonacci extensions of the first wave (Major Wave 1) to determine potential exhaustion targets for Wave 5.
This is one of the finer Elliott rules: Wave 5 is often proportional to Wave 1, and tends to end at 61.8% or 76.4% Fibonacci projection of Wave 1.
🧩 The Medium Matryoshka (within Major Wave 3)
Inside Major Wave 3, we also have its own clear subwaves:
(1) – (2) – (3) – (4) – (5)
These internal waves unfolded harmoniously and aligned with the larger projection. Everything fits together — like a fractal.
🪞The Small Matryoshka (final internal impulse)
This is where we are now:
We’re seeing a smaller internal substructure within what’s likely the final Major Wave 5.
This inner structure appears to have already completed waves (1)-(2)-(3)-(4), and is now preparing for the final (5).
The market may be on the verge of completing this last internal wave, which would also wrap up the entire larger sequence.
🎯 What the 61.8% and 76.4% Levels Indicate
At the top-right of the chart, I’ve marked:
- 61% Imp and 76% Imp: Fibonacci projections based on Major Wave 1, measuring its length and projecting it forward to estimate potential Wave 5 targets.
This method is particularly powerful when Wave 3 was aggressive (as it was here). In such cases, Wave 5 often ends at the 61.8% level (conservative) or at 76.4% (stretched but valid).
These zones are likely areas of exhaustion, and often act as traps or distribution zones before a deeper correction begins.
🟥 The Key Detail: A Very Shallow Wave 2
One major observation: Wave 2 of the big matryoshka was extremely shallow — it barely retraced and failed to reach significant Fib levels once Wave 1 was broken.
This may suggest the possibility of a Wave 1x, which often marks the end of a trend.
If that’s the case, we may be entering a bearish phase targeting around 22,200 points, unless Trump intervenes with a surprise or Powell cuts rates — which isn’t out of the question considering the current labor market conditions.
I’ve heard reports that the active population is shrinking, which keeps the unemployment rate at 4.6%. Many immigrants may no longer be working — either out of fear of deportation or because they’ve already been sent back — which artificially maintains the percentage.
This also means that those still employed can demand higher wages, potentially sparking new waves of inflation.
🟡 Current Key Area – Support and Institutional Bootcamp
Right now, the price has reached:
- The 61.8% extension of the big matryoshka (marked in yellow).
- A technical support zone and what I call an institutional bootcamp area.
This is where the market has paused its decline and is deciding whether to launch the final push upward, or if Major Wave 5 is already done.
🔻 Where Are We Heading?
At the moment, the best trade setups are:
- Short positions, looking for a corrective extension if Wave 5 has already ended.
- With tight stops and light exposure, since we’re still in a high-risk, decision zone (there’s a chance for one last push up).
This is not the time to go heavy.
It’s the time for discipline, waiting for confirmation, and adapting quickly.
🧠 The Key Concept I’m Applying
“I’m not just counting waves… I’m looking at how they relate to each other.”
Understanding wave relationships via proportions and repeating levels (like 61.8% or 76.4%) is what separates an advanced Elliott analyst from someone simply counting 1-2-3.
✍️ Final Thoughts
This kind of analysis keeps me grounded.
Seeing the matryoshkas, the channels, the fib zones, the institutional timing… It’s all part of the puzzle. It’s not certainty — but it is a map.
And right now, that map tells me:
Be careful. Don’t buy blindly. Let the market confirm if it really wants to do one last upward push — or if the move is already over.
We’re likely in a context of deep uncertainty.
Tariffs don’t kick in until August 8th. The labor market has clearly been manipulated. And we’ve seen how politicians on all sides are doing what they need to win narrative battles, regardless of the financial consequences.