Elliot wave can NOT predict the future, but it can help you make adjustment based on market movement
1: In this chart, we "should" be in wave 5, and standard Elliot wave theoy is that wave 5 is normally the weakest impluse wave, and only has .618 to .782 extension. If we take this guidance, it normally land QQQ in the red box i posted earier. At this point, I am more inclined to believe this is indeed wave 5 because we have less volume, more volatility, and also RSI divergence in this wave, as compared to the wave 3, all of these charatcers fitting the wave 5 description
2: However, stock market always does unexpected. There is a small chance that we are still in wave 3, ie, wave 3 did not end on July and are extended to even today. In this case (ie, if QQQ does decide to go through an extended wave 3), it would rise "significantly" higher than 550 (maybe in 580-600) before having large correction
So, buying hedging here could protect the situation where it does complete wave 5 and start long awaited correction, but does not elimiate the chance to enjoy another huge run up if we extend beyond 550
I know this contradicts to our intuition, but have been practicing elliot wave for 10 years, it has taught me never to predict the market, but to constantly adjust our assesement of market based on the movement.
