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Monday, June 1, 2020

Elliott Wave Update ~ 1 June 2020 [Update 9:20 EST]

UPDATE 9:20 EST
Sometimes you can find a spot in a similar decline and rally and the market will rhyme.

The B wave in 2000-2002 plunge. Note the rising 50 Day moving average and where it crossed the 200. Market plunged anyway.  Much as today, wave [a] was the biggest with 5 waves, wave [b] brief pullback and wave [c] stunted but still had a clear 5 waves.
A closer look. Note where the RSI peaks occurred (yes this is the daily but its a longer time frame so its appropriate in this case). And incidentally daily RSI reading never made it to "70" (overbought).
UPDATE 7:55EST

CPCE. Incredibly bullish readings. Another .46 low. Same setup as the February 19th all-time high.

So the evidence from the CPCE, Diverging VIX, RSI peak readings showing where (iii) of [iii] of both waves A and C are likely at (thus confirming the subsequent higher highs are merely waves [iv] and [v] )….and most importantly, a massive countertrend A-B-C wave structure that seems likely primed for a historic collapse. This wave (2) is one for the record books.

New highs today in the Wilshire. There are enough waves to consider the structure, wave (2) complete. There may be some more squiggles left though. VIX is still showing long-running divergence.

One reason I like to use the stock RSI indicators is not because they mean anything in real time (they largely don't) but that they can often leave typical wave structure markers. One of the most common typical wave structure marker is that peak RSI most often occur in a subwave three of three peak.

Using the 1 hour charts, we can see this potential. This can help us confirm that the count may very well be correct.
On May 20th I made some projections for wave C of (2) Since the structure seemed to running at about 1/2 the length of A, that was the preferred projection.
June 3rd was the projected peak based roughly on 1/2 of A in both time and price. 
The next day some red slope lines were added.
Today's chart. Projected peak moved up a day to June 2nd and C would not quite be 1/2 of C. It may fall short of that and the 78.6% Fib. That would be typical.
Here is what the count would be if we pop just a little tomorrow and selloff to finish C. Or C could be finished today.
Or a variation. Ascending triangle count. That would imply large gap down open perhaps only to be recovered. (e) would have to finish under the peak price of [iii] to be a valid pattern. So about that circle area looks about right.
The NASDAQ Composite has completed enough squiggles to consider the wedge over. 





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