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Friday, August 5, 2016

Elliott Wave Update 5 August 2016

The Wilshire made a solid new series of highs, The long term count has switched to the best altnerate. Instead of cycle wave b of (a) we should probably label it primary wave [5] of cycle wave V is nearly ending.  [5] of v actually gives more clarity to the situation. It sharpens the count.

From a technical perspective it makes sense. Note the RSI waning since the 1990's. You would expect to see the strongest readings of RSI in a wave 3 and lessen and diverge in wave 5. Certainly we are seeing that now.
If this count is correct, wave (5) of [5] of V is over 61.8% Fibonacci related to the size of wave (1). If it carried to a 1:1 ratio we are probably looking at DOW 20000 sometime end of this year or early 2017.
However shorter term count suggests that won'thappen because wave 1 of (5) of [5] is a long wave so far.
And since I like the Global Dow not reaching new highs, the above count looks ok.
Shortest term count is starting to really dial things in. Its a fun time to be a wave counter again!
With all that said, A curious pattern in the DJIA:
With all that said above, as far as in terms of social mood, if the markets continue with strength through or near the election or "just hold up" Hillary will likely win the election and perhaps big based on where intermediate social mood is at the moment. She is associated with the rising social mood of the 1990's. Donald Trump is associated more with a negative mood for the past year (market went sideways since June 2015).

So there really is no fretting over who will win the election. If social mood turns sour hard enough prior to the election, Donald will surge again and might just win. He certainly has no problem selling out his events even when he is down in the "polls". If the market holds up well into the election, I predict Hillary will likely win and maybe easily. However since a historic top is due to take place, once the downturn has begun I predict she will be the most hated president in history based on a collapsing social mood. She will be faced with a mainstream media likely to turn on her also succumbing to social mood events. This is not my bias speaking, merely an outcome of social mood theory.

Hillary is associated with a rising  market, Donald gains strength in a declining market. Again this is a cause and effect situation. Social mood moves in a direction, stock market reflects that mood, outcomes of the overall mood result in social mood decisions such as election outcomes. Its not the other way around and no one can control the overall mood although they surely try.

Look at the Real Clear Politics poll average in the Presidential race since last year.
Notice that when the stock market plunged or lagged reflecting sour social mood, Donald Trump surged. When the market spiked higher (such as now) Hillary surged.

In any event, no matter who wins the election, the stock market is due for a significant and historic top  shortly thereafter or before the election. Therefore a historic collapse is due after the final wave count. If Hillary is President, she may well be run out of office, possibly impeached for high crimes and misdemeanors. If Trump is President, the same fate may very well await him although I am less certain about that because he is a product of a long diverging negative social mood to begin with.

We live in interesting times, stay tuned, I am not going anywhere!

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