How to Nail the Top of a Five Wave up Rally With a Retracement Tool

Let’s look at a five wave up rally in ES-mini futures played out from early May 2023 to the top made in late August 2023:

If we add a retracement to the whole rally you will see one interesting phenomenon, the 50% of the rally normally coincides with the low made by the wave -iv- down:

That is a verry important observation because once we get a pullback in a wave -iv- down we can reverse engineer that rule to create a forecasting tool to forecast the top of the final push higher in the wave -v- up.

Specifically, we can conclude that wave -v- up tends to top at 100% ext of the distance from the low of the wave -i- up to the bottom of the wave -iv- down projected from the low of the wave -iv- down.

Let’s add that projection: