Custom Search

Wednesday, May 27, 2020

Elliott Wave Update ~ 27 May 2020

We may have just experienced the "upside surprise" or "third of a third" of wave C. Tomorrow's opening will be telling.

On the flipside, we have wave C = .382 Fibonacci x A.

Literally, within 5 Wilshire points. The target was 30,891.43 and the day high ended at 30,885.80 [Update: The chart got changed to 30,887.28]

But the top 2 primary counts are diverging greatly at this point. They always do if this was the "third of a third" up.  If I label today's high wave (2), and this turns out to be the "third of a third" spot of wave C, the divergence between the 2 counts is significant.

So we'll let the market decide the outcome. We do however have a diverging VIX still. (but that will collapse if the market is running higher in [iii] of C.)

Here is the C = .382 x A count:
Along with negative divergence in the VIX we can say the same is happening with the CPCE chart.  They support the idea that (2) is over or nearly so.
And here is the other count I mentioned above:
Formation of a new blue virgin space?  The rest of the trading week should give us plenty of clues. We could still gap down a bit tomorrow and then chug higher much like what happened today. Or, a gap up and partial close would preserve our proposed "blue box virgin space".

Note the diverging VIX still. However the VIX should finally collapse in price if this is the correct count below.
A closer look at the potential blue box virgin space for wave C of (2). The box can partially close, but at least a sliver must stay open to meet the criteria.  Note the expanding market internals as it surged upwards. That behavior fits the "third of a third" spot. 

If you were watching the market, the surge felt like a surprise didn't it? Its supposed to!

There is still a chance we have merely reached [i] of C but this implies C has way longer to run and likely much higher after the wave [ii] plunge. So this count is lower probability, also due to the technical damage that would likely occur and lost support levels. If the market plunges deep, likely (2) is over, not this count.

But, these are the things we map out ahead of time just in case.
And obviously DOW closed over 25,000 and SPX closed over its 200 DMA and over 3000. Maybe that will trigger the trading programs to buy, buy, buy and give us the rest of [iii], [iv], and [v] of C price move higher.
I'll be back for more and pile stuff here at the end of post.

Bullishness:
Dr. Fauci. I bet if we mapped his comments for the past 5 months they would largely follow social mood swings.  Pooh-poohed the virus while market was travelling to all-time highs in February. 

Jumped on the death and destruction bandwagon as social mood plunged.

Now says maybe we won't have a second wave of virus afterall (after numerous warnings to the contrary.)

I am just waiting for him to give the "all-clear" and that should mark the top of (2). We probably are not there yet and some of the country is still locked down. But everything is mostly scheduled to be all opened soon beginning of June.
Gold count hanging in there still! I gotta believe!


blog comments powered by Disqus