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$SPY - CONTRARIAN VIEW -
🕑 Added 2025-04-04 16:20:50 +0000 UTCOK I need to share this.
This is the contrarian view on the market.
The main reason I am sharing this is that we have a 3 wave pull back since the Top in Feb.
Wave A typically has 5 waves in it, but I don't see 5 waves so far, I see 3.
There is one other scenario where 3 waves is allowed and that is an WXY pull back which has 3 waves in it but it is not common, HOWEVER, it did happen in 2022.
So, a 3 wave pull back holding on the 0.38 Fib is typically found for Wave 4
I would be doing you all a disservice if I ignored this and it is also a reason why I have not been selling anything during this whole pull back since Feb.
The pull back since FEB has been record breaking fast and has put the market in a very oversold position, this can align with Wave B but companies are still strong....if the tariffs continue to be implemented then the strength of the companies will fade, so the longer the tariffs stay in place, the more damage they will do and ultimately complete the ABC correction we have called for.
But if Trump can sort this tariff mess quickly then the market could roar back.β¨β¨For this reason, I am going to take advantage of a potential Wave B bounce, because if tariffs end quickly, we could see this scenario above play out and there is no rejection at the Wave B rejection range
This is food for thought.
Comments
INDY
Most of the corrections had 3 waves and lasted 2-3 months. With one exception the third wave was 1.618 of the first one, and the correction found support on a fib retracement level. The current correction completes 2 months this friday 18 April, consists of 3 waves prominent on the 30 min chart with the third wave being 1.618 of the first. This correction is a 0.5 retrace of the move from the Oct 22 bottom until the 19 Feb 25 Top for both the QQQ and SPY. There was a minor squiggle which I consider as part of wave 2 which one could chart as a descending triangle.
Magopool
Dear CAP, would be plausible as a scenario an expanded flat correction with B wave going beyond wave A onset, thus hitting the "contrarian" target of 750 SPY ?
Florian
EXACTLY! If looking in the 4 hour timeframe we are in wave 3 of C. After completion either it's a W and we're going for an X OR correction is complete and we go for wave 5.
Kad
I have the same question as well
Gareth Neary
Square on my mind π
Byron Tanigawa
On the 4 hour you can make for these 3 waves to be 5-3-5 (with another low Monday) which would be a proper wave W down of a double zig zag correction WXY (just noting that I think you mean a WXY correction (no such wave sequence as XYZ). I agree though small chance itβs a single zig zag so play the bounce and find out
G4Golf
@Cap. I see what you are saying with the first wave down A. I agree, only see 1 wave on this 1D timeframe. But if shortened to 1 or 2 hours, more waves appear, possibly even 5 of them depending on how counted. Does that make any difference?
G4Golf
Unless there are special rules for WXYs, don't see why it cannot go to between 382 and 500.
Chris H
Cap covering all grounds ππ»
Dante
Cap please look my opinion in chat group: Ask questions
Faisal S
I'm thinking Trump might hold on until Powell starts cutting.. let's hope not
safoo
Wow it did touch down to .382 ($506)
Dante
Yes thank you. I ask about this scenario
Sum
SPY at 506 level now
Baktash Azizi
I think scenario makes sense!!
Jaschy
What is the current assessment if the EU imposes tariffs on tech companies? This could change everything or could this be the trigger for wave C
Magopool
All clear thanks. You also answered my question in the related chat
JG
That's the thing - no one knows whether this is a correction or bear market yet, while painful still too early to tell. Dca into quality + undervalued positions is the name of the game.
Ilia$
This view is similar to Jeese's view.. https://x.com/Micro2Macr0/status/1906505418949452162
Brian
Bc the waves are still unfolding. It takes time. He canβt predict the future
Matt
the David Hunter View
Jordan Johnson
Am I correct in saying we should either see 3 waves up to our B target (bear scenario) or 5 waves up to start sub wave 1 in this potential wave 5 (bull scenario)?
Nigel
And would our new wave up potentially go to ATH in the spy?
Nigel
Would a "quick Trump correction" remove the need / expectation for a more "expected" ABC correction which we were expecting on the assumption we were preciously near the top of wave 5?
Scott Williams
Letβs go melt up!!!
Andrea Zani
Thanks Cap. If you only see 3 waves why we were saying that we are in wave 5 in the last months?
Sum
With the pace of decline we could potentially hit .382 ($506) by today's close or early next week (to .382 or even to .5 ; notice .5 is ~ 2021 peak). If this plays out, how quick do you anticipate the recovery, ie to wave 5 target? It might mirror Covid recovery?
Alvaro VG
Could this be the same scenario for AMZN?
Giorgio
I think too many people called top weeks ago and too many people called bottom now for this to truly be the cycle top. Just my pov. Less people get it right than weβre seeing now.
Dhairya Ratti
So we might see more downside to $506 ?
Julian
my highest probability scenario would be a consolidation and let SMAs/EMAs get closer together before another leg up. this can take many months though
Julian
good job. always important to be prepared for anything
Taylor D
How does Powell's discussion today influence this? I'd imagine his resistance to rate cuts and a wait and see approach (which I personally agree with) is more likely to be bearish than bullish near-term, right?
Lennart
I do see NAS S&P and DOW all in Wave 4 right now. So wave 5 would give us the Melt Up across the board before we enter recession and bear market time.
Rob
Cap could go Wave Z as far as the 0,5 fib to complete Wave 4?
Kad
Thanks for sharing Cap, how would then the possible Y and Z waves look like over the upcoming months, if this pullback from FEB till today remains as a 3 Wave (being the X) ?
manjunath
Can we get list of best stocks to buy for wave B ? Would that be in watchlist ?
MCAL
Trying to learn fast here....π So when you say "take advantage of a potential Wabe B bounce" how will you distinguish between the opportunity to buy or sell? Is this solely linked to Trump sorting out the tariff mess? Namely, Trump sorts it out, you buy. Still in a mess, you sell? Thanks!
Daniel E (Bullish)
I wrote about this scenario this morning without the technical analysis and knowledge. But imagine ppl start offloading capital thinking the end of wave B is close, only to then see it go much higher and then fomo and start buying at much higher levels, which of course will keep the rally going higher and higher.
LD
Cap vibing with Tom Lee. Love it!
Tony Li
With the market moving so aggressively, how many times do we need to test SPY 510 level before we feel support is in Capt?
Dom
Interesting
Collin
Depends on the situation/ sentiment when it arrives Dayum. Iβm sure cap will share more about confirmation in these two scenarios.
sahilpreet Singh
Wait for rejection
MJ
wow
Paul
so exciting!
Shayanak Kundu
Crazy. This is black magic.
sahilpreet Singh
Personally I like this one more lol. Thanks for the second view cap. Itβs all tariffs-tariffs and if orange man says no tariffs no tariffs, we could be looking at melt up.
Dayum Son
Now in dilemma as when the wave B hits to sell or assume it's wave 5 π
