Elliott Wave Update ~ 6 April 2020

Today's strong internals suggest that it was the kickoff of wave C of (2).

Since wave A was a 5-3-5 [a]-[b]-[c] zigzag, it might be prudent to look for another 5-3-5 zigzag to form for wave C. This would give us a "double zigzag" for wave (2).

We are probably nearing or at the top of wave [a] already. Looking for some price weakness in wave [b], then wave [c] of C of (2) to take us higher.

Double zigzags exist to make up price. The first zigzag was not enough of a retrace. Therefore the market might perform a second zigzag in order to take the wave (2) price retrace to a more acceptable level (somewhere near or above 50% retrace of the entire drop).

And of course the underside of the channel is a solid target.

And here's the channel zoomed in. It may not be exact, but its fairly close.

Elliott Wave Update ~ 3 April 2020

Primary count is that wave B of (2) is still tracing out. It retraced deeper in price. It looks like it is not finished either. Monday will be telling.

To the bottom of the marked trading range for B?

And of course there is still the chance this is merely wave 5 of (1) as shown below. However,  there is no alternation between corrective waves (2) and (4) which is not desirable. They are both sharp zigzag type correctives which is one reason this is not the top count. Also it doesn't channel well if this is 5 of (1). You can see that from the first and second charts above.

However if the market traces out down to (1) and bounces in (2) then that's what we would count it as.

Of course, ultimately wave (3) is predicted by this blog and we may well be in it already so counting squiggles is perhaps just an exercise to keep our minds occupied. Wave (3) would likely settle down to the next major price support area of the past decades and that would be previous market major tops.  Just a guess.

Elliott Wave Update ~ 2 April 2020

Yesterday's low held where we marked "B" on the Wilshire. This does not mean that B is over yet. Perhaps the market needs more consolidating to do. Perhaps there is more selling pressure for B.

This is where it can get tricky counting squiggle waves.  The entire Intermediate red (2) is corrective in nature and it can take several forms. But since its a wave (2) it typically retraces to a Fibonacci 50% (or often more). However, in this case, since we are all ****ed, I'm leaning to less than a robust retrace.

Possible pathing options for our primary count 1.) B is over, we are starting up in C of (2)  2.) B needs sideways consolidation prior to marching higher in C of (2)  3.) B will turn downward in price a bit more before finding its footing.

In these situations the market tends to favor a sideways trading consolidation move and that B is probably not over yet.  If this happens we might wind up counting any consolidation as part of wave C anyway.

The weekly shows the lower bull market channel line still makes a nice target for Red (2).

And here is that lower Bull market channel line viewed up close on our daily chart.

The above chart makes a nice stopping point for wave (2). It will have pierced the big virgin wave space (typical) and it will have "kissed" the lower channel bull market line one last time prior to wave (3) down which will absolutely crush this market. This implies (2) will retrace less than a typical 50%.  But that's ok I think in this case and I wouldn't count on anything more.

Elliott Wave Update ~ 1 April 2020

As was stated yesterday, usually a B wave will retrace at least 38.2% of the rise. Today we got that as a minimum. This does not mean B wave is over.

We have a target box for B and a target box for C.

Note the top alt is that wave (2) already peaked and we are now in wave (3) down. However, despite the nearly 1000 Dow down day, internally on the NYSE the declining volume ended the day at 6.24:1.  A bad day for sure but not a 90% down day for volume. If that picks up and follows through with more down pressure, we might be in wave (3).

But for now, we'll keep the primary count the way it is.

Wave (2) target would be either one or both thin blue virgin wave spaces created in (1) down.

Finally, the other top alt count is that wave 4 of (1) peaked and we are now just going down to finish wave (1).  This is less favorable because the entire structure doesn't adhere to channeling guidelines when you inspect the structure closer (see 1st chart above).  There were just 50 bazillion, million people thrown out of work (worldwide), so we'll assume the market will continue to operate at a speedier timeline as outlined in my primary count(s) in the charts above.

Yesterday's CPCE. 5 and 10 day MA's have come well out of panic territory. Eventually the market is setting up for an even bigger panic once we confirm wave (3) down is in works. 

Elliott Wave Update ~ 31 March 2020

Primary count is that wave B of (2) is continuing to develop. It would be normal for a Fibonacci 38.2% retracement of the recent rally.

Elliott Wave Update ~ 30 March 2020

Trying to guess the squiggle count.  Top count is that wave B of (2) is forming.  Just what form it takes we'll have to see it unfold a bit more.

Not oversold anymore by a long shot.

I'm waiting on chart data for my Breadth Thrust and CPCE charts. I'll update later tonight after the data comes in.

Elliott Wave Update ~ 27 March 2020

We were looking for immediate B wave weakness and today didn't disappoint. Corrective waves can take many forms so ultimately we don't know how the over Intermediate (2) structure will develop. However we do know wave twos typically retrace the entire wave ones usually at least 50% or very often more.

Elliott Wave Update ~ 26 March 2020

We said yesterday the market would have to keep going lower to consider that we are still in Intermediate (1) down. That quickly didn't happen. Therefore we will count the low as (1) and the market is currently tracing out wave (2).

This would make our count(s) look like this:

The squiggle count since the low works nicely as a 5-3-5 zigzag. This is a corrective structure up, not an impulse wave.

Here it is in log scale.  Today was a very good sized "follow-through" up day for the market on the heels of the 90% up day a few days ago. Therefore it is likely we are in Intermediate (2). Wave two's typically retrace at least in the 50% (or more) range so we'll give it more leeway to do what it will.

The overall theme is that wave (1) down has traced out, we are correcting upwards in wave (2) and an even bigger crash will occur in Intermediate wave (3).

A possible wave (2) target would be an underside kiss of the broken lower line channel. Then (3) will be even more destructive.

Elliott Wave Update ~ 25 March 2020

Again, as we said yesterday, a lower low would look ideal for our Intermediate wave (1) structure, however its not required.

Minor 4 can count as an expanded 3-3-5 flat. However, for this Minor 4 to remain the primary count, the market pretty much has to turn down now to start forming Minor 5 of (1). And at the end of day we can see how fast that was the case.

Again, Intermediate (1) may have seen its low as you can note in the alternate count.  If that's the case, then we should see Intermediate (2) keep playing out.

Note that the Fib lines were adjusted to place the 38% and 62% at the peak price points of waves 1 and 4 as that seems to line up nicely for now so we'll go with it.

Looking at the squiggles, we may have a small 5th wave failure at the end of today. Possible squiggle count below. 

Again the weekly would look better with another test of the major support (a lower low for our current wave (1) structure) prior to a proper Intermediate (2) rally.

This implies we have one more "panic" that will set everyone over the edge emotionally.

Wave 3's are typically the strongest technically but the end of wave 5's will emit the most emotion. For instance anyone still holding out hope for holding stocks (like looking at your 401K) will capitulate on the wave 5's. (And then of course the subsequent major bounce - in this case (2) - will cause them to curse their decision for bailing at the low).

Elliott Wave Update ~ 24 March 2020

Primary count is that Minor wave 4 of (1) is tracing out and once complete, the market will make a lower low to complete wave 5 of (1). This scenario would be ideal but its not required as there are enough waves in place to consider Intermediate (1) complete. This would also close the huge gap up created today.

However, today was clearly a 90% up day all around in both volume and advancers vs decliners on the NYSE. There are signs of buying enthusiasm and as was suggested last week, the market may be exhausting itself for selling.

We'll see if we get the last wave down to complete the "panic".

As also was suggested, there is significant price support and the market seems to have found that and bounced nicely. Another lower low would likely be a retest of that support and mark the bottom of (1).  Usually we can count intermediate sized waves on the weekly so another blip down would make this more satisfyingly. We can barely see wave 2 of (1), but its discernable. Wave 4 of (1) is not yet discernable.

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Elliott Wave Update ~ 20 March 2020

Updating the squiggle count, the blue box minimum target for Blue Minor wave 4 has been met. We could have some kind of Minor 4 triangle (or flat pattern) developing if the market gaps up on Monday and eventually sells off again.

The market hasn't been this oversold on a weekly basis since the great plunge in 2008. We used to think DOW 14,000 was insanely high.  We have a long way to go....

Oil.

Gold. Remember I talked about "virgin spaces" in a few posts back about how wave twos make that a target area?  Gold has a blue box area just below $500.

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Elliott Wave Update ~ 19 March 2020

Primary count below.

Gold:

Elliott Wave Update ~ 18 March 2020

Ok, there is a lot going on this chart below. You'll note that the primary squiggle count has been updated. The waves have traced more evidence therefore we have put together the best count we can.

We suppose the market is tracing a series of wave fours at various degrees which accounts for the jagged mess over the last many days.

We have target boxes for Minor 4 and Minor 5 of (1). And then, in theory, the market should have exhausted itself and bounce for Intermediate (2).

The thin blue box area running at the 50% Fib is the proposed "virgin space" of the structure. (Also known as the "third of a third"). This is where no preceding price (in blue wave 1) nor after prices (in blue waves 3 and 4) trace through a second time.  Hence this is a space that is only punctured by prices once within a 5 wave structure. This often happens near the middle so that's why I projected a 50% Fib line through it.

However the "virgin space" is always the minimum target for the next corrective structure back up (in this case intermediate red (2).

The chart below is the most bearish. It is a secondary consideration but the chart above fits better as primary count.  But heck, we'll see what happens won't we? Either way, we have a ways to go I think to finish this first Intermediate wave structure.

Weekly chart with proposed updated primary count as shown in 1st chart above.  Note the significant price support the market is coming up on. Could be our potential wave (1) resting area.

Also note how the long term channel was smashed through as I suggested it would.

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Elliott Wave Update ~ 16 March 2020

I keep trying to count the waves so that a big bounce (LOL - 2,000 pt isn't a big bounce?) is coming but I haven't really found the "third of a third" spot yet. So for now I'll count as if it hasn't come yet.

Therefore this wave count is the most immediate bearish. This supposes that the true panic spot of this 5 wave (BLUE) structure has yet to reveal its moment.  I probably made the wave count one size too small overall, but for today we'll keep it like this. I'll relabel it one degree higher tomorrow, I'll have more time and maybe we'll have more information on what the market intends to do over the next few days.

In log scale. Often the wave 1 - 2 channel will form and then the wave 3 channel breaks away from it and accelerates downward.

GOLD.

I was correct about the 1 point rate cut prediction. The market dictated it.

Look at the volume....Looks like a peak-type volume.

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