It turns out the pink wave ii was correct — it’s just that the wave ii is much more complicated than just a single rally from 1820 to 1852.
Notice former support at 1865 is now resistance. This pattern has been highly unpredictable in wave ii — each time it looks like we are going down, it just pauses and reverses the other way.
The rally from (B) to (C) really doesn’t look like a typical impulsive wave. The majority of that rally occurred from 1938 to 1965 with only one red candle on the 5 min chart. So it’s extremely difficult to get a read here. The only hint from the market that makes sense is that it stopped at 1864 — which was former support from the prior wave.
Next time, I really should keep that in mind. Once we finish the 5-wave wave i, then I should expect wave ii to eventually hit 1864 before wave iii can proceed.
If that rally to 1855 stops short of that 1865, then it is entirely possible to test the lows, but get stalled on the way down, and then rally back to touch that support line.
Going forward, I’m expecting wave ii to be complete in the market – though always have to be cautious.
Tomorrow Wednesday the Fed will be speaking. So would be interesting if that coincided with a wave iii.