I've spent most of the night trying to decide what is happening. I am thinking either we are seeing the start of a major risk off event or we got our wave count wrong and this is the end of the first & second wave. Now we all pretty much reckon that the world is going to turn upside down sometime soon, and we know Evergrande plus a few other property companies in China are going to implode unless the Government rescues them, plus a bunch of other stuff is going to go haywire soon, these things haven't actually happened yet, and the Chinese and everyone else are still buying lots of EV's, at least as of a few weeks ago, and there is no indication of Li demand or prices softening yet that we know of, so the triggers haven't actually gone off yet...plus none of the normal shorting misery makers are flooding the forums yet...so I am coming to the conclusion we just got the EW wave count wrong. Remember a couple of weeks ago, or was it last week? , I said the graph wasn't doing what it should be doing at that point? Well if I assume we now in wave 2, rather than wave 3, we get a 78% fib retrace of wave 1 at 831, which roughly matches the bottom of the current down channel for tomorrow, and the bottom of your log channel for tomorrow, give or take 10c for errors in curve and line drawing. It also takes us down to the 34% RSI, which is an historic reversal level for ORE. The 78% fib is the most common retrace target for wave 2 historically.
If that is the case I get a range for tomorrow (Tuesday) of 831 to 899. Now that doesn't take us out of the down channel but it does give is a significant bounce (assuming it falls first and climbs after). On Wednesday anything over 868 takes us out of the down channel and starts a new climbing channel. Obviously anything over 899 tomorrow also takes us out of the down channel too. Now following the day pattern, with Monday being a down day, Tuesday is usually an up day, so that argues for a lift Tuesday as well.
While none of the triggers floating around are especially convincing just yet - Omicron, Chinese property collapse, inflation surging, Fed tapering, US Employment miss, general US political chaos, etc (although they are all pretty serious - except for maybe Omicron), they are also still building in importance, they haven't yet flowered. On the other hand there are a bunch mitigating factors - Omicron looks like it might end up being a widely caught immunizing version of the dreaded lurgy which might actually make the whole thing go away, Chinese have lowered their RRR which will inject huge amounts of cash into debt buyback, Chinese local Govs have been instructed to prop up the property sector, stop gap funding has been past in the US congress to keep Gov running for a bit, and world-wide people seem to be awakening to the fact that they the world is being run by a pack of authoritarian dictatorial moronic arseholes and they wont be pushed around anymore - so the implosion of the world economy might not quite happen as planned. But then on the other - other hand there are reports of smart money/insiders exiting the markets, Musk just used twitter to execute the most brilliant shadow play to sell of $10b+ of Tesla shares in full public view with full public approval, all suggesting that some people think being in cash rather than shares right now is a very good idea, so that argues for this being a correction, not just a wave pattern completion...
I think for now I'll go with the wave pattern completion theory and say this will bounce around 831. We are coming into Christmas, and demand is hot, and there is money everywhere, and this last week just looked too much like a classic BEOT rug pull. All the trades have been calls on Li for months so it was asking for a massive put, but it didn't seem to trigger quite the cascade of selling they would have wanted, so it is time to go another round and do it again. Lastly we haven't had the cavalcade of disaster stories to strip confidence in the press. It doesn't feel like a collapse.
Oh, by the way - as you can see, Trading View has merged the ORE and AKE histories, as of tonight.
AKE Price at posting:
$8.52 Sentiment: Buy Disclosure: Held
