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Monday, June 22, 2020

Elliott Wave Update ~ 22 June 2020 [Update 8:10PM EST]

[UPDATE 8:10 PM EST] Looks like futures are on the move. Since the SPX was almost a perfect wave C of (2) = .618 x wave A of (2), perhaps wave (c) of [ii] will be .618 x wave (a) of [ii]. This closes the gap down at 3195.44.  Obviously if we get the big overnight ramp and mega-gap up in the A.M.

But it shouldn't hold...the big 90% down day is hard to overcome and regain.  A lot of folks bailed at that price level, I would expect they double up and the selling is even harder. That's what the wave count would suggest anyway.

If it happens, looking for internal market divergences again.
[UPDATE 6:40PM EST] Counting the VIX. Remember, the VIX count does not mirror the primary count. My theory is after a big move up in the VIX, if there is a significant correction back down in either price or time, it will trace an impulse pattern back down. This is not to say that it doesn't impulse up. However, the VIX represents agitation and fear and impulsing in a nested 5 wave move back to calm is probably nature's preferred way.

It just makes sense that we don't "correct" in three waves back to a calmer state, we rather impulse. And the impulse should be 1 big nested wave toward the range of calm we are supposed go back to, even if only temporary.  That's my theory anyway.

So we have a completed impulse from the March low.  It ended in a wedge pattern which was verified by the quick move higher to a spot higher than where the wedge started.
So the recent rise produced after the big selloff also should be impulsing back toward whatever level its headed to.

Two possible counts. First is that the VIX impulse back down is completed. Start count at second double top. This is the preferred count. I like the final thrust out of the long triangle as being a final move. However, its probably missing a move lower.
The second count is that we start from the true top even if it is by only .01 difference from the second top. This means the VIX requires a lower low than [iii]. This implies higher market prices obviously to achieve this count. If you look closely at [i] down, it does not really have an internal 5 wave substructure.

If this count is correct, expect a big move down in the VIX first thing in A.M. That means market going higher of course, probably an overnight ramp. The Wilshire is in position to break up over the down trendline. It probably will.   If it does the count would look better overall for everything.
There now exists a "Dow Theory" type double non-confirmation event when comparing the NASDAQ Composite with the Wilshire 5000. The Composite (and 100) both closed at all time highs today.
Primary count is the market is taking its sweet time to roll over.  It is still trapped inside the 1 minute candle trading range from last Tuesday's open. (15 minute chart shown below).

Note again the weak internals, each one weaker than the last. The market is levitating. To break upwards, there will have to be a new surge internally.   They have been achieving this mostly with overnight ramping. So we'll see.
Wave ii counts nicely as an expanded 3-3-5 flat count. However, this count implies the market will gap down and never look back. Just sayin'.
Again, without overanalyzing every squiggle, today could be just another distribution day.
And since this blog likes to use NYSE internals, here it is.  Another lower low. And it traded under last Tuesday's open. Its still leading us lower it seems so I will keep showing it.
Wilshire Daily. Closed higher than the starter channel but it has to make a higher [ii] for the channel to move.  Technically it made a lower low today and its high is less than Friday. Extreme twos on the chart all-around.

The alternate count that the recent sideways is part of wave 4 and that wave 5 will break upwards attempting to make a new market high or at least close the open gap.
We still have a potential triangle forming in the recent trading range. The triangle could actually be part of [ii] up and the island top holds. There are a lot of options at this stage. 
Gold's pattern needs to finish. Wave (3) down in the markets is scheduled to be intense selling. Gold suffered in price in (1) down as you can see. Its finally recovered and a higher high above [iii] of 5 is all that's required. 

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