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Wednesday, June 10, 2020

Elliott Wave Update ~ 10 June 2020

Bumped this up (Updated about 20 times until it looks right). How to explain social mood over the last 30 years in an Elliott Wave picture.
[Updated 8:35 EST: Futures look on the move perhaps. Its a long night though obviously. The market sometimes bails on the final projected squiggles.

Again, since sticking with wave (2) being the count, and the fact that it has retraced 87.3% which is an extreme limit, (would we expect anything else?) I'll remind (mostly myself) that there are enough squiggles in place already to say (2) may be complete. (I showed this last night).

Or whatever. I'm tired. Good night.
 
A visual representation of social mood waves from a hierarchal representation.  [Updated, again]

Again, this is the best way I can think of to explain Elliott Wave Theory in a nutshell and why we count waves on every scale we can and why it matters.

Ok, I want to add some comments about the nested social mood wave chart below and nested waves.  The major theme is that Grand Supercycle [III] is no longer rising. What does GS [IV] imply?  An epic retreat for civilization. There likely won't be any flying cars decades from now. Instead history suggests major wars.

At best we can expect civilization to offer us no surprises.  A man or woman in 1815 would marvel at the things that had been created by 1915. A man in 1915 would be marveled at thing created in 2015.

A man in 2015 is not likely to be amazed at anything that exists in 2115. That's it in a nutshell. In fact things will likely be worse, even much worse.

Obviously major wave forces have nested waves on the backside also.  We will reach Primary [A] of a low and rebound in [B]. This is nature's way. Same will happen at Supercycle level at some point in the distant future. We'll rebound in Supercycle wave (b) helping to dampen the effects of a long winding Grand Supercycle wave [IV].

And so it goes. That is Elliott Wave theory. Nature's natural expansion and contraction at a Fibonacci rate on nested waves of progress. The Universe is always expanding. In fact the theory is that it is accelerating at the outer edges (which supports the idea of Fibonacci as a major governing mechanism).  Only the Creator has the final answers. We can only be aware that there exists a non-random system governing humankind. It will be darkest before the dawn. But dawn comes. Its a comforting thought.

If this theory is correct, and the count is roughly correct, the initial downside forces are a major disruptor because of extreme alignments of varying degrees of wave structure. However GS [IV] really has yet to exert itself, it is still in the flattening phase. However it is no longer providing upward force except for residual effects. This is why an initial collapse can be so dramatic.

Think of the  Stock Market peak in 1929 and what it wrought in its aftermath. 1929 was a peak of Supercycle (III) which is one less wave degree than Grand Supercycle [III]. This is why it is predicted that everything we experience will be worse than the Great Depression. Indeed it already revealed that to be the case.

There are even much higher wave forces at work such as Millennial (1000+ year waves). In fact, Robert Prechter theorizes based on long term data from the time of Christ and before, that this is GS [III] peak and that earth will have a GS [V] of millennial wave "__".  But you dear reader, probably will be very old or not alive at all.

One can only think of the rise and fall of the Roman Empire to imagine what kind and what degree wave they were in at the time. Mr Prechter has it roughly figured out, but you get the idea.

On a final note, even if we are actually headed to (5) of [5] of V of (V) of GS[III], (and not a wave (2) bounce) will it matter a year from now?
Again, I refer to Robert Prechter, founder of Elliott Wave International, long term chart perfectly supporting this theory of a Grand Supercycle peak as reference. It doesn't match the above exactly but you get the point.
The proposed wave [iv] of C (or 3) running triangle failed with tremendous down pressure today. Yet the market held above high support and appears to have attempted to form a new triangle resulting in a complex corrective (w)-(x)-(y) construct in which the final correction is a small triangle in place of the original bigger one.

You have seen these complex corrective constructs before. Intermediate (4) of Primary [5] to the February peak is one such construct and the only way to label the February peak in a proper Elliott wave manner. It is the largest example perhaps we have on hand.

In this case the market went to "W" and bounced hard to "X", yet it was unable to form a proper 5 wave impulse to wave (5). It needed further "correcting" which resulted in a rather large sideways triangle that ended in Y of (4). Only after all this correction was the market able to resume an impulse higher to the February peak. That is the Primary count.
Today's possible waves. Again, perhaps the triangle is labeled too early. But there are enough triangle waves to consider Minute [iv] complete.  These patterns are somewhat easy to predict. When the lower low happened today, I immediately thought this pattern was going to form and viola it did!

The market was able to steadily absorb the declining stocks under heavy selling volume so far over the last 2 days.
Whether or not it holds is the question.
The market seems desperate to continue higher and finish the assault on the breakaway open gap down from February.  Its like the Germans' advance on Moscow in the early Winter of 1941. They could see the spires of the city but they finally exhausted themselves. They dug in, but the Bear of the Red Army forced them into a long retreat. That was the apex of their advance.

Ok maybe that was a bit melodramatic, but the market is very, very stretched and beyond frothy.

Its like social mood wants to go back to the way it was for one last time. Even though everything is falling apart all around, everyone has blinders on and is either in shock or outright denial. From the coronavirus lockdowns, loss of businesses, to the social upheaval going on all around, people hope it will all abate and things go back to normal. But the primary wave count suggests even if it does abate a bit more, it will be short lived.

The primary count is wave (2) up. It is reaching the absolute limits of a credible wave (2). But if the gap holds open (likely forever for those of us able to read this), we will have marked a permanent change in social mood from here on out which is what was predicted by the Grand Supercycle peak having come and gone.

The "rollover" in mood has actually been going on since 2000 roughly and 20 years later the largest governing wave of Grand Supercycle size has peaked and starting to apply real downward negative mood pressure.  Think of a big broad slowing curve lasting from 2000 to 2040. Its peaks in 2020 and the force of Grand Supercycle [IV] has asserted itself. When combined with Supercycle, Cycle and Primary down waves going all in the same direction, the social mood forces are unable to maintain the old order that existed. You can see it breaking down quickly.

With GS[IV] no longer pushing mood upward, and Supercycle (a), cycle a, and Primary [A] all pushing downward, the only thing holding mood up is Intermediate (2). And its trying its damnest to get back to where we were. If (2) is the only nested wave pointed up, if it goes, all degrees combined point down. This is why the prediction that (3) down may be very terrible.

That is the theory of Elliott Wave. If the counts are correct on all scales, it won't be fun for anyone.
Happle Stock again. It aligns with the overall count that [v] of C of (2) in the Wilshire. Shown in non-log so you can see the parabolic rise.
Wave (5) detail.
Wave 5 of (5) detail. It took me all of 10 seconds to see this count. The waves are clear. But making and applying the labels takes a bit longer.  I like it.  Lets hope we get that little thrust up tomorrow to finish things off.  A crapload of people going into the weekend all long Apple.

What amazes me is that all the company's flagship products are almost wholly made in a communist country that loathes America.   Like nothing bad would ever happen.  Its simply amazing how complacent that viewpoint has become.  Someday we'll look back and surely say, "what were they thinking???"
CPCE. Curling up finally. But 10 MA day dropped some more of course.
VIX
BPSPX. More record-er. Every last stock that can be found is being bid no matter anything. Peak crazy.


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