Initially, I thought that once we got to 208, we would go down again because the first leg down from 218 to 197 took a form of a 5 wave sequence, which meant there would be another leg down once the retracement has completed.
However, what stood out on Tuesday was the bullish structure of the retracement in yellow. This lead me to make the same argument as the one I made on Friday: there should be another leg up to complete the retracement from 197, once the retracement of that retracement has completed. EWT does not allow for the retracement in cyan to extend beyond the start of the yellow sequence, which lead me to say that if TSLA breaks 198, I will roll my short puts out because my count will turn out to have been wrong.
My 2nd count turned out to be wrong while my 1st count correct. What went wrong was I tried to go in too deep, counting the yellow retracement and giving it too much weight. Waves at this level can be very deceiving due to the truncated timeframe and low volume. Instead of 198-210-198-210, the entire retracement was just a simple 198-210.
Here's the updated chart
It's not guaranteed at this moment that 191.8 was the bottom of wave A, although I give it a very high chance. If it is not the bottom, then we'll be looking at a leading diagonal for wave A, like so:
The implication of a leading diagonal A lies in the full potential of the correction. While a simple zig zag A targets 187, a leading diagonal would target 161. So let's see if TSLA can break out from this falling wedge or does it need another test of the lower trendline. The immediate bounce would still target 207+ but what happens after can be drastically different.
*Leading diagonals are very rare compared to zig zags.
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