I have given the NASDAQ and NVDA charts above. Have pointed out the extreme precautionary areas in both.
What does precautionary area mean in terms of elliot wave analysis
Elliot's theory is all about sentiments, with market movement showcasing the sentiments prevailing in the masses. One can see these GROUPS of movements in the short term and long term. The short-term groups fit into the larger time frame groups, or in other words, the SAME PATTERNS of market sentiments are repeated again and again in the short term or long term.
CYCLE WAVES
These are long-term waves, and in our context, they constitute the whole price action from the COMMENCEMENT UPTO NOW.
This cycle wave is ongoing now with its final 5th wave (with this there is no contradiction among all ellitocians). However, the contradictions start as to where and when this cycle wave going to end. We are onto the 5th cycle wave. By its very definition, the 5th cycle wave cannot be definitive. It can have multiple targets and CAN ALSO FINISH ABRUPTLY.
The best way forward in this scenario is to pay more attention to the SHORT TERM wave analysis on a daily basis keeping in mind the long-term ongoing 5th cycle wave.
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