Dogecoin Analysis

11:15 p.m New York time

What’s happening now? Dogecoin fell from its May 6 high of 0.6848, reaching a low of 0.3854 on May 11 and then bouncing back up, so far today having reached a high of 0.5402.

What does it mean? By my principle count, the decline is in the middle leg of a correction that will be followed by a declining third leg, and then either another corrective pattern or a rise above the May 6 high.

What’s the alternative? Rather than being a correction, the decline from May 6 is the start of a downtrend, with further decline to come.

[Dogecoin at 11:06 a.m., daily bars, with volume]

What does Elliott wave theory say? I chose a correction as my principle analysis because the decline from May 6 to May 11 came in three waves, in the form of a Flat. A downtrend would have five waves, as would a Zigzag correction. The degree subscripts are arbitrary and don’t represent an analysis of Dogecoin’s full history.

The rise from May 11 is a B wave by my principle analysis. B waves often — not always — will retrace a significant portion of the A wave decline.

Learning and other resources. Elliott Wave International has long been the leading analytical house based on Elliott wave theory. They make available a number of free educational materials and other resources, in addition to their for-pay subscriptions.

I recommend two books, both by people associated with EWI.

First, Elliott Wave Principle by Robert Prechter and A.J. Frost is the book that, along with Prechter’s analyses, that created the revival of Elliott wave theory. I first read it in 1984, and it has had a profound influenced on my thinking about markets ever since.

Second, I’ve found Visual Guide to Elliott Wave Trading by Wayne Gorman and Jeffrey Kennedy, both of EWI, to be a useful book that relates Elliott wave theory to practical trading. The authors are hands-on Elliotticians, and for an active trader, that’s exactly what’s needed — less theory and more how-to. The first chapter of the book gives a very nice thumbnail run down of what Elliott wave theory is all about.

Terminology. Here are some links to information about some of the technical jargon I use.

Charts. On my charts, waves have a subscript showing the degree above or below the Intermediate degree. Here are the subscripts and the degree each represents:

  • {+3} Supercycle
  • {+2} Cycle
  • {+1} Primary
  • No subscript: Intermediate
  • {-1} Minor
  • {-2} Minute
  • {-3} Minuette
  • {-4} Subminuette
  • {-5} Micro
  • {-6} Submicro
  • {-7} Minuscule
  • {-8} Subminuscule
  • {-9} Bitsy
  • {-10} Subbitsy

By Tim Bovee, Portland, Oregon, May xx, 2021

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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Based on a work at www.timbovee.com.