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Tuesday, June 2, 2020

Elliott Wave Update ~ 2 June 2020

I'll show again back on May 20th, when I relabeled the (2) rally as an A-B-C, it seemed to be running about half the time and price of A based on measurements of [i] of C. Therefore a projected June 3rd top would be ideal. Well here we are. If you are ready to abandon everything and never look at this blog again that's exactly how I would expect you to feel because that's what the market will do to you even if you try and be objective and count waves the best you can.

And even though 2 weeks ago, it was strongly suggested that wave C should have a decent relationship in both time and price to A with a projection of June 3rd to achieve that.  And that is what has largely happened so far.

I'll again remind everyone that there are enough waves in place to consider the count complete!!

It appears the VIX is capitulating, at least for a bit.  In fact if the market opens big and/or it rallies significantly, any bears or bearish opinion will likely capitulate. And that's just fine.  It was stated the VIX divergence wouldn't likely last if prices keep moving and here we are. Maybe that was the intention all along is to capitulate.  Even if its only for a day or so...
Yet we are still nearly 500 Wilshire points shy of our ideal stopping point of where wave C = 1/2 of wave A in both time and price (31,825). I would be sorely disappointed if the market failed to strive for this lofty goal.  The 78.6% Fibonacci lies at (31,907).  That is the target range for [v] of C.

Removing all the fancy wave counts and making a simple channel, if the market strikes the upper channel, we'll have made that range.  You can say wave [i], [iii], and [v] connect within a channel which is always ideal for a 5 wave impulse structure.

Back on 14 April is when it was pondered about the market filling all the down gaps except for the top one. It was recognized back then that a 76% retrace would achieve that.

So of course we are now into the top most red arrow gap.  And no, we haven't forgotten about the old bull market lower channel line.  A close back under will signal wave (3) is likely underway. The danger for bulls is, that can be achieved in 1 or 2 trading days so I think now is an appropriate time to mention it again.
And finally the market certainly has poised itself to be able to pop up significantly higher based on the potential series of "Ones" and "Twos" and the potential to create a "blue virgin space" for what would probably wind up being wave 3 of (5) to new market peak. But the count of wave (2) suggests it will be a false flag.

Main reason? Because the primary count is (2) not (5) to new all time highs, its as simple as that.
So again we have reached yet another great divergence between competing market counts. Market forces are at an absolute ripping point one way or another. The primary count is wave (2), so the call is market reversal if a break higher occurs tomorrow.

However this is how bulls would count the potential of "third of a third" of 3 of (5). If you are expecting new all-time highs, then this is likely where the key break upwards should happen. That's the EW logic plain and simple.
Yeah the (5) count weekly again in case your wondering...
Both the bearish and bullish counts have the potential to rally big tomorrow. In the bear's case, market reversal should occur as the result of complete exhaustion. This is the primary count.

If the market creates and manages to "hold" a new blue virgin space, there really is no resistance left for it to make new all-time highs eventually. 

The NASDAQ composite count supports the idea of complete exhaustion it need only try to overthrow its upper wedge line and crash in a fantastic bearish drop at the speed you won't believe. Bigly!
Updated CPCE. Daily ticked up 1 higher. Bulls bulls bulls!
And you thought I had conveniently forgotten and buried all these charts from last month and such? Of course not! But now is the day to re-post them, they all came back full circle.

And I proved my point that markets do not react to the "expected" or immediate outside events - i.e. - riots should have equaled a negative crashing market in everyone's mind.  But you know that is not true. It will move when its ready to move. It will move when the count is over and not a minute too soon.

Big day tomorrow!
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