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Thursday, May 21, 2020

Elliott Wave Update ~ 21 May 2020

Primary count is that there is a final squiggle higher for wave (2) to meet the target range of Wilshire 30,421 - 30,475 (now at 30,477 after today) as explained in last night's update.

Again, there are enough waves in place to consider wave (2) complete.

Ever since the market gapped up and jumped higher than the Fib 61.8% retrace (29,780 Wilshire), it has been moving sideways in a seemingly consolidation move for the past 4 days. This is why we hold out hope that a final thrust higher may still be coming to meet our narrow target range. Tomorrow will probably add clarity to the situation one way or another.

The intraday waves have been choppy and that may signal that its trying to triangulate itself higher.
The top alternate has been discussed at length in the last few updates as well as the separate post last night on the open gap VIX situation. We would assume wave [i] of C price peak is either the high from a few days ago or (possibly) will occur tomorrow.  Then a pullback for [ii].

Or, if we get a big gap down open creating the price low for wave [ii], prices stabilize, and eventually reverses, then that would fit this alternate count as well.

Any further pullback than the lower pink parallel line where I have [ii] would probably be too deep and the market would be in danger of coughing up all the hard earned gains it has been putting in for over a month now.   Then probably wave (3) down would be finally be in motion.

So to reiterate, the market probably cannot afford to pull back too deeply for [ii] or too much technical damage will occur for both the market in terms of resistance/support and the wave count.

Basically wave C would be a mini-me of wave A. Half the price, half the time but with about the same slope of ascent, etc. 

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