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Friday, May 15, 2020

Elliott Wave Update ~ 15 May 2020 [Updates Friday Night 20:15 EST]

Well, we didn't get our gap up open. Instead it was gap down again and the market worked hard to make up for it. Incredible though that it finishes at the high going into the weekend. People are still very bullish to buy this market!

We have a confluence of events that may be a nice target to finish our proposed wave (ii) double zigzag.   Mainly we have a blue virgin space that has yet to be filled. We could use that backtest on the broken neckline. There is also an inverted head and shoulder target price that hasn't been met quite yet. Oh and also the 61.8% Fib retrace.

Lets hope we get the gap up open on Monday to fulfill the structure.

There are enough squiggles in place to consider it complete though.
Doesn't the rebound of wave (ii) on that chart above remind you of trying to count Intermediate (2) on the chart below? Its like a micro fractal of the much bigger (2) fractal.  Its also being stubborn on rolling over just as wave (2) is/was. I suspect that when wave (iii) of [iii] down does commence in earnest, its going to happen so quickly that no one will have time to ponder the meaning of it all.

Weekly.  Note how the low this week hit the lower channel line. iii of (iii) of [iii] of 1 of (3) down should bust right back underneath it.
And a closer look at that lower channel line:
[Update Friday 20:15 EST]
And finally the top alternate count if wave (2) decides it ain't over yet. As a bear I need to be mentally ready if the market moves in a big way against the primary count. In the chart below if we get that little pink wave (iii) up, it will feel like a big kick in the balls for anyone bearish the market. But in the long run, its probably just a blip in the scheme of things.

If the chart below were to occur, then look for the daily 200 DMA to be hit (30475 on the Wilshire at the moment).  And we might be looking at a new all-time high in the NDX which would create a super divergence between markets. 

There really is no reason for wave (2) to continue on. Both time and price have been more than sufficient. Steadily waning market internals and daily wave counts point to the trend being down and this thing rolling over.

I will say this though, if this chart plays out and we do get a new (2) peak, don't look for meandering little starter waves to take us back down. I think the bottom will fall out worse than what happened in (1) down because it will likely be a totally spent market devoid of any shorts left to squeeze.

To confirm the downtrend, price point second "X" must be taken out to the low side. My primary count has that happening probably next week and then you can throw this fancy alt chart in the trash.
A simpler way to make the above would be this. One thing we would likely get is a "seven wave look" on the chart for (2) which is of course a corrective count.

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