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However, now that the red W-v is extending, i.e., subdividing in EWP terms, into the green W-1, 2, 3, 4, 5, we can see that it so far bottomed right at the 161.8% extension, and the index also peaked inside the ideal green W-4 target. Thus, we must assume the green W-5 will reach the 1.764-2.000x target zone at $3,323-3,183 contingent on holding below last Wednesday’s high at $4,374, with a severe warning for the bears above $4,129.
The BIG Picture
Since our EWP count indicates an enormous Cycle-3 wave peaked in 2024, as shown in Figure 2 below, we are currently experiencing a Cycle-4 wave. Fourth waves are typically described in EW terminology as flat corrections. Additionally, EW theory includes a rule of alternation: Wave 4 differs from Wave 2. In this context, Cycle W-2 was an extended nine-year-long zigzag; therefore, Cycle W-4 is likely to be a multi-year flat.
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