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Tuesday, March 31, 2020

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.

Monday, March 30, 2020

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.

Friday, March 27, 2020

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.

Thursday, March 26, 2020

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.

Wednesday, March 25, 2020

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).

Tuesday, March 24, 2020

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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Friday, March 20, 2020

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....

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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Thursday, March 19, 2020

Elliott Wave Update ~ 19 March 2020

Primary count below.

Wednesday, March 18, 2020

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.



Monday, March 16, 2020

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.

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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Thursday, March 12, 2020

Elliott Wave Update ~ 12 March 2020

Market smashed through the channel lower line.
Dollar looks like it might be forming a zigzag down which implies another 5 waves structure lower
CPCE. Finally a bit of panic as measured by this indicator.
3 month. 1 point rate cut coming?
Oil. Getting crushed.

Tuesday, March 10, 2020

Elliott Wave Update ~ 10 March 2020

I've always said over the years that counting Elliott Waves is a logical endeavor that follows rules and guidelines.

Either THE TOP is in, or it isn't. We have to have counts that account for both possibilities.

The primary count is that wave (4) of (5) ended at the W-X-Y construct with a contracting triangle in the last position. This is Elliott Wave International's primary count and they pretty much nailed the turn and predicted the downdraft.  My count had supposed we would get a smaller correction and then peak in a few months forming a final set of subwaves. No matter, as we have a peak point to count downward from shall the market do so.

However the wave structure down is only 3 waves at this point.  Also the main channel formed from 2009 is clearly intact still.  So logically, IF this is the beginning of a superstructure downward, THEN the channel will eventually be smashed through to the downside in an even BIGGER wave event that would constitute the heart of a massive subwave 3 down.

The top alternate longer term count is that the channel holds and the market makes a new peak. The market however has sustained a lot of technical damage.
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Monday, March 2, 2020

Elliott Wave Update ~ 2 March 2020

Well that screwed our count all up didn't it?