Elliott Wave Update ~ 18 September 2020

Lucy is holding the football. Charlie Brown is lining up to kick it. This is a lovely bearish wave pattern.

Elliott Wave Update ~ 17 September 2020

Its seems like a long-winded (and stealth) head and shoulders topping pattern.  Which implies prices are at the far end of the pattern. Which implies massive downward implosion. Ok yeah, sure.

Non-log scale:

The NDX made a lower low today. Leading lower or bullish non-confirmation? I don't really care.

We are near one of those crossroads in which the bearish count and the alternate bullish count are just about diametrically opposed. One or the other will win out and I'll tell you, the bears have had no luck at these stages for the most part. Its Lucy, Charlie Brown, and the football. So you should probably just go long. I'll remain bearish, but like I said, I'll present the options, you decide. Buy "Safespace" on the dip. Jeesus. I hate this market....

And figure the inverted head and shoulders pattern will probably be the golden ticket...

And yes I seen the potential of this pattern developing 3 days ago to close the gap that existed which today it closed very conveniently. I am just that good, I refuse to give in to my inner bull though. But here, have at it. Every bullish pattern seems to always work out and then some. So here you go. Maybe my upwards thick blue line is too steep. 

Every day the fraud grows deeper. We are forced to swallow lies. And now they are trying to force us to repeat them.  The market is just a reflection of that greater social mood.  The financial fraud continues. 

And no, I am not trying to say the waves are lying. I am trying to say they mean just what they mean. The market is always correct and I truly believe it. I just believe it is in the final fraud stages and yet every day it is harder to swallow.  Its in the final herd stages and that may last a few more months, who knows....

Elliott Wave Update ~ 16 September 2020

Primary count is that Minute [ii] peaked today on the Fed "news" in a downward flat 3-3-5 count that retraced the entire decline a healthy 47% or so which is adequate for a wave [ii].

Price action today appeared on several occasions that wave iii of (c) of [ii] was going to charge uphill in prices. Ultimately they reversed lower both times.  Therefore wave (c) could have ended in a messy ending diagonal count as labeled below. This implies exhaustion.

Note the up volume ratio at the peak price today on the NYSE. Is that a buying climax? What should have been a "third of a third" wave up punctured a tire.

At any rate, if this is Minute [ii], it is getting "long in the tooth".  After prices collapsed in about 8 hours of trading from peak we have had 8 days of possible bearish consolidation. The consolidation may be over and the market primed for a big wave [iii] lower.

Apparently Chairman Powell can guarantee low rates for 4 years despite the huge amount of record debt sloshing around. We'll see how the market tests that theory.

Elliott Wave Update ~ 15 September 2020

The only index of the 5 we have been watching to break price above its recent pivot high was the DJIA. But after that occurred it was the only one to go into the red before end of the day.

The Wilshire just missed making a higher high above its pivot.  There are still many short term options here. Until the pattern develops more or confirms what is already labeled as [ii], we just have to be ready.

I know the market doesn't "feel" like its going to collapse here. I'm not "feeling" it. But we are not supposed to feel it coming!

The Minute [ii] flat count has enough squiggles in place to consider it complete and has achieved  a decent price retrace of the total decline.

Transports made another pivot high. This may be a small swing non-confirmation with the Industrials. It could mean nothing, but it could be a small signal for a bearish turning point.

DAX is an interesting pattern.  Bearish wedge that falls short in price?  If it has one more move up, then likely the U.S. markets are moving up to a higher Minute [ii] price also. So its worth watching.

CPCE. Back into the extreme territory. Nothing new for the past many months.

Elliott Wave Update ~ 14 September 2020

We had a lot of short term options based on what futures would do. Today was a very solid internal day. Best day since the peak as far as that goes.  It would be surprising if the market collapsed from such a solid up day.  Yet the key pivot high is still in place. The market would have more work to do to take it out.  So despite the solid up day, we still have a lower high, for now at least. The Wilshire printed an open gap up today. At some point they aim to close it, question is of course when. 

On the hourly, deep oversold has been worked off. Higher RSI, yet lower highs so far.

 
Most bearish count.  The VIX has gone limp though. 

Semi-bullish wave [ii] flat or expanded flat variation. The theme for wave (c) of [ii] is wave i of (c) is likely to be the biggest. Today would be considered the kickoff day for wave (c) of [ii].

Everything is still moving together relatively speaking.

And of course, the "rally into the election" count.  This is the count if the market all-time high is not in place.

Elliott Wave Update ~ 11 September 2020

I threw a bunch of primary count pathing possibilities on one 5 minute chart.  It all centers around the idea of a "base channel" forming.  Usually a one-two, one-two base channel will use the peak as the upper channel line.  

So we have 2 options for the base channel:

1. A low hanging base channel that is bouncing around stair-stepping down with lower lows and lower highs and eventually prices will break downward in a very sharp third wave acceleration channel. All the major indexes are in sync and seemingly aligned with this price action. 

2. The peak will be used to form the base channel, therefore wave [ii] has not yet completed.  Wave [ii] would count as a 3-3-5 expanded flat and take prices aggressively up toward a 55% - 61.8% retrace of the entire drop from peak and then exhaust itself. How exactly it paths to get there I have shown a few possible ways. But you get the idea.

And here the same chart without all the noise and the most bearish wave count and that implies Monday will be a crash.

Ok, added the Minute [ii] expanded flat (or downward flat) count on its own chart so its less confusing.  The key is prices should finish higher than (a) of [ii] to be an "expanded" flat.  If prices finished a bit lower than (a) of [ii] it would be called a "downward" flat. 

Note how a good wave counter doesn't change things drastically in the squiggles (unless its a bit ambiguous as the first wave down from peak usually is by design). What we alter is how we connect (label) the smaller structures together is how we get alternate counts.

CPCE. The option run to peak was just amazing.  it dwarfed the option run-up toward the February peak. However, the setup rhymes again at the moment.

Here is the option snapshot from Friday, 21 February. And the market created the huge open chart gap down on Monday the 24th. The market can be cruel. Would it dare repeat the same trick? Leave a scarring open chart gap down on a Monday?

The reason I have been focusing on these moving averages and their positioning is because one can imagine that they jostle around in a similar manner right before big market moves. The fact that currently we have the 30 day average at the lowest means that market participants have been positioning themselves for the past many days in a more bearish manner. This would be in the series of wave "ones and twos" down we have been perhaps experiencing since the peak. Then the acceleration wave lets loose in wave three and the meltdown in options begins.

In other words the options market seems to be turning and since the "NASDAQ WHALE" has supposedly left the market, there is a lot of money that can be made in the opposite direction (down). And the same "meltup" in options can occur in reverse with a meltdown in options. Gamma chasing in reverse as the Zero Hedgers like to point out.

Just wondering out loud. This is what makes the markets so interesting.

Of course that brings us to the alternate counts in that this market refuses to die before the election. It hit the perfect spot today if that is the case on the Wilshire.

But the 10 year yield count is being stubborn and may be morphing into a possible ending diagonal triangle (same with prices in reverse). 

What could scare that many people back into bonds to make them move sharply downward again to a new all-time low?  Well, one can consider a market crash might do that trick. But that would have to occur soon though or else prices may spike upwards over the blue wedgeline invalidating the count.

We'll see! Either way its exciting! This is ultimately a bearish pattern and has a violent aftermath (yields surge upwards after 5 of (5) finishes. And I don't suppose that surge will be interpreted as "bullish" anything.

Elliott Wave Update ~ 10 September 2020

Going to maintain a bearish stance here. (gee Dan, that's a surprise) In arithmetic scale, the last possible price channel from the march low was backtested at rejected today.

Again, everything is relatively aligned.  The DJIA actually made a lower low at end of day not followed (yet?) by anything else although the SPX came close. Market Makers walked prices higher this morning to attempt to close the last of the open chart gaps (Wilshire got closed). Then rejected and walked downward to attempt to close the open up gap.

Everything is very calm actually and that's a reason to bearish I suppose. There is no panic....yet. And that is as good a reason to be bearish as any.

Lots of similarities at key spots since the March low.  This time looks similar but this time may simply be sucking in the bulls rather than bears.  No one wants to short here because it keeps shaking the tree back and forth.  These intraday moves can be huge on leverage. 

The tepid exhausted bears always wait for the perfect moment but that usually never comes.  That would have been last week when I was counting up to [v] of 5 of (5).  Bears are waiting for the perfect "61.8%" fib retrace or whatever and it may just be shaking here low on the tree before taking a massive crap downward with loaded longs and very little shorts. That's how the market likes to punish. 

It could be just a [i] and wave [ii] was a 3-3-5 downward flat that ended today. Maybe we open green tomorrow for a last head fake before plunging. Winter is coming...

Again the top alternate (if the market has not peaked) is this count below. Its contrived. If the June peak is overlapped in price that breaks the count. I think the market knows this very well. And break of the June peak may very well be swift and without mercy.

I mean really, the market is still at NASDAQ 10,919 for Pete's sake! Yes bubbleland or have you forgotten?

And we already have multiple overlap with the DJIA June peak. In fact another close beneath it. 

And DOW THEORY has been potentially triggered again for a massive sell side signal. Transports made a new major (swing) high and DJIA did not confirm.

CPCE. .54 print! Wow still super bullish. Every moving average though has crossed up over the 30....

10 year still holding price support.

Do we have one more exhausted pop on the GERMAN DAX coming? I guess we'll know soon enough. It may be too shallow an angle for a wedge move.

Next to the American markets, the Germans run a close second for most corrupt. (well ok Chinese take the cake but they are Communists)

Ah, the FED bought NO ETF's in August. In fact their holdings went down in value by $64M.

Elliott Wave Update ~ 9 September 2020

Despite the big rally, still stair stepping down?  I really don't know how else to count it in a bearish manner other than what we got below. 

Wilshire 5000 didn't close its gap down, neither did the Composite or NDX. The SPX (pretty much) and DJIA did close their gaps down. However, still produced a "lower high" than the rally Friday. So every index is still in agreement, or "aligned".  The primary count is that they are aligned for a big move lower. 

Will post more soon.

Ok, here is the primary count from the hourly perspective. Primed for a "third of a third" wave down. Again, we can "tee" the count up like a golf ball, its up to Mr. Market to hit a 300 yard drive down the middle of the fairway.

The alternate count is that the market may have one slight lower low closing the virgin space gap (blue box area) or mostly closing and then rallying very hard after a "falling wedge" type pattern. Maybe it rallies on stimulus news who knows. Or whatever, who cares at this point.

But the big thing with this count is that the market will have many more weeks of (likely choppy) rally.

But the alternate count doesn't smell right. For one reason, the VIX is very high and the closer we get to election the more people are getting scared (and making threats).  Another reason is you have to "re-light" the incredible rally fires that were burning its way to a 12,000 Nasdaq.  It feels like momentum may have broken.

I heard more than 1 person tell me their plan was "get out of stocks in their 401K" right before the election and then wait and see afterwards. What if a lot of people are thinking the same?

Elliott Wave Update ~ 8 September 2020

There has been no panic yet in this selloff that now sees the NASDAQ off by more than 10%. Elliott Wave International would call this price action "stair-stepping" down. Perhaps in a series of "ones" and "twos".

Lower lows and lower highs. Today's rally was not as vigorous as the one that occurred Friday. 

Each major index was in agreement every step so far. A lower low in the morning and then another lower low in the late afternoon. The Composite and NDX even had lower lows at the closing bell. They seem to be leading the charge. 

Primary count is that the top is in. I mean how many ways can we slice and dice the 11 year rally?

The Composite counts well as complete with a major price channel break.

The VIX has not matched the June selloff peak. Not really any panic going on (yet). But if that is a wedge, VIX prices should be heading higher than the June VIX peak very shortly.

Lower lows in market price, VIX did not panic. It almost looks like the VIX is consolidating for a bigger move higher in VIX price. And that would match the market perhaps consolidating for a big move lower in price - i.e. - the panic moment or "third of a third" wave down.

But we have been here before and Lucy always seems to pull the ball away from Charlie Brown at the last minute. Hence we have our alternate count in that the market will find a price low and rebound hard. 

The count doesn't really "look" correct. But its the best alternate we have for now if the market has not yet reached its ultimate Grand Supercycle peak.

One clue that the above alternate may not be correct is that the Industrials have already breached their June peak in price. So the above alternate doesn't work well in the INDU. Also the INDU is a proposed truncated 5th wave which is of course, a very bearish setup.  Truncated 5th waves are, in effect, second wave rallies that end and 3rd waves follow.

Tesla and Apple seemed to have lost the mojo at the moment. Once a stock goes parabolic and when the fever finally breaks, it very hard to regain that lightning magic in a bottle and turn it all back on again. 

Probably Tesla will rally $100 since I posted that LOL. Updated chart from last week. It wasn't invited into the SPX because Elon Musk is not politically correct enough.  Yes, the stock market has become a politically correct institution on its face just like society.  

And Apple had a long term trendline goal which it hit and has retreated since.

GOVERNMENT DEBT.

10 year prices have held at support. But there is not much support underneath for quite a while.

Our 3 month count. Hrmm, we have upward movement as our count was suggesting. Lets see if it follows through.