Potential Start Of Bull Market

2021년 9월 24일

Overview:
I believe that BB has hit its bear market bottom and is starting its bull cycle, the arrow on the chart shows where I believe we are at in the current cycle compared to the previous cycle.

I've highlighted the full bull/bear market cycles with a white box on the chart. The reason the first cycle was much shorter than the second is simply due to having very low liquidity, this is seen in every asset class. Once a stock (or any asset for that matter) is established enough and has a market cap of tens of billions of dollars at it's bull cycle peak, it starts to follow similar timelines, just look at APPL's recent ~1000 day cycles or Bitcoins 4 year cycles.

Now onto why I believe that BB is starting its bull cycle. There's a few reasons why I believe that BB has started its bull cycle which are- the ABC correction has completed, price action broke through the downward bear market resistance, there's been a long-term accumulation and there's a potential bull market uptrend line forming.

ABC correction:
The ABC correction has already played out. We see the first lower low in the recent cycle, market with a white "A" followed by the first lower high, market with a white "B". What happens next is the "C" wave, which breaks the bull market support line causing a massive retracement. What also typically happens in the "C" wave is there are 5 major impulse waves down (grey numbers). Just because the ABC correction is completed doesn't mean the bull market will start right away, there's often a long term accumulation period which follows the bear market.

Accumulation
The accumulation period is when institutional investors start accumulating before the next bull cycle. The accumulation phase takes place between the bear market bottom and the start of the bull market. This is the best time to buy the stock if you're planning to trade cycles. Accumulation phases can often be long and drawn out when an asset isn't yet established enough for market cycle timelines to be known by the general public, which is what we see in BB. Accumulation phases are also meant to turn retail investors away by having little volatility in the price action, making the average person think its a "boring" stock.

Resistance break
In BB's previous cycle there were 2 major resistance lines. The strongest was a downward resistance (red line) which, once broken, formed the bull market uptrend line (blue line) and started the first wave of the bull cycle. The second resistance (red line) wasn't nearly as strong as the first, but getting to it and breaking it creates the first higher high which is confirmation of the bull market. From there you see impulse waves 1-5 play out which is the bull market in its entirety. Recently, BB has broken its major downward resistance and back tested it as support. Since price action "hugged" the top resistance line (multiple closes back to back rather than just wicks touching resistance) before the breakout, it shows that the break was strong and it's unlikely that bullish momentum wouldn't continue.

Another thing I'd like to go more in depth in is the bull market uptrend support line (blue line). In the previous cycle BB started forming the uptrend support line right before the breakout of the downward resistance, which started wave 1. Wave 1 deviates hard from uptrend support line, then wave 2 holds the support line as support before going parabolic, which happens to every asset class in a cycle. In the current cycle, BB not only broke the downward resistance but has formed a support line which it's held before and after the break, similar to the previous cycle. I would expect this line to be (somewhat) held until the break of the second resistance level. After the break, price action should start going parabolic as we see the first impulse wave of the bull cycle.



What to expect
The previous bull cycle hit the 1.414 Fibonacci retracement level on the logarithmic scale and got above the 3.414 Fibonacci retracement level on the regular chart. If the same were to happen for the coming bull cycle, the price targets would be ~$500 to $680. Personally, i find the logarithmic chart more accurate when it comes to using the Fibonacci retracement tool which means i think the price target would most likely be a minimum of $680. Please note that this would take 5+ years to come to fruition, similar to the previous bull cycle.