Let’s assume that I’m correct with this theory and it ends up proving to be spot on. What might that look like? Well if wave 1 was the 2020/21 OTC bull market (and not a one off bubble), then wave 2 would then build and expand upon what was accomplished during wave 1.
Wave 2 wouldn’t just be a revisit or retest of the first ceiling, it would begin when it broke through those ceilings and then be of a similar magnitude as wave 1 was. By most accounts, the second wave in an uptrend tends to be bigger and better than the first one. The bulls have more conviction and confidence thanks to the confirmation that breaking the first ceiling gives them. The shorts have to panic cover and since a secular uptrend on this many OTCs at once has never happened, the implications could be quite astounding.
With that being said, the time frame and scale of what we’re discussing is on a level that OTC traders aren’t used to dealing with. I believe it’s very possible that we’re not going to see just one major bullish phase where everything moves at once in a fairly short period of time. I think it’s very reasonable to think that this could be a longer duration period with many ebbs and flows along the way. Think of it this way. If the pattern we’re watching is made up of monthly candles, then that means each phase can easily be measured in months if not years. That means we could see rallies that last weeks or months then pullbacks and consolidation phases that last just as long.
Historically speaking, a chart pattern/setup on this time frame is going to need ample time to play out fully. It’s not impossible whatsoever that we could see a multiyear phase with lots of volatility but ultimately with many of these charts staying resilient over time and steadily trudging higher. I can’t stress this enough, if you plan to profit off of the #OTCSET phase, you will likely need to be ready to be patient and methodical while playing the ebbs and flows which are sure to be part of the process.
It’s possible and worth mentioning that this phase could in fact heat up at some point and be much shorter than the time frame I’m describing. Maybe we see 3 years of gains packed into 6 months of wild action. I certainly don’t know for sure what this could end up looking like, even if I’m proven to be correct with my theory. What I believe wholeheartedly is that this is an unprecedented scenario for the OTC and it’s going to manifest into something wild and special. What that exactly looks like is anyone’s guess.
While it’s easy to get worked up and excited for a major blow up to happen fast, I highly recommend taking the opposite approach. Assume this phase is going to last a long time. Assume that the market and market makers will steadily throw wrenches in our plans and try to shake out retail at every chance they can. Assume that we’ll need to test our conviction during the trying times and that when things are looking virtually perfect for a bullish catalyst, we’re going to see shenanigans thrown our way. Assume the worst and that we’ll be in for a bumpy ride, but with that said trust in the (higher probabilities of the) secular trends winning out and that these conditions are going to lend themselves to some serious Deep Fucking Value plays to emerge.