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Tuesday, June 30, 2020

Elliott Wave Update ~ 30 June 2030

Wow, what a day. So many thoughts how to organize them in a blog post?

Internally, the market was kind of weak.  For instance on the NYSE advancers vs. decliners 1.9 to 1 ratio. Up volume vs. down volume ended 2.2 to 1 ratio.  These ratios have steadily declined over the last 2 days as the market rose. So instead of increasing, it decreased.

Wave ii counts very well as an expanded flat. This was anticipated and it happened. If the market sells off terribly from here and breaks beneath yesterday's low, we can say we had the perfect count.(however....)
What was a bit disconcerting was the "blowoff" surge in prices at end of day.  Prices were trying to reach the upper base blue channel of Minute wave [i]-[ii]. They almost made it. A small little up tomorrow would finish the touch.

The market has now justifiably formed a [d] wave of a Minor 4 triangle which has been shown for well over a month as a possible pattern for Minor 4.

A selloff from here would fulfill the potential [e] wave of Minor 4. Remember, [e] waves in triangles are supposed to make you feel that the price direction has finally reversed and in this case headed down for good. But that's the emotion of an [e] wave. Ifs its a true [e] wave of a triangle, it'll head in the direction everyone things it should go (in this case down) and then find hard support and reverse hard the other way (in this case upwards). That's how triangles yank us around.

This price action can also make you think the triangle is valid and that a breakout above the previous (2) high is surely coming. However as much as [e] waves can fool us, so can fake triangles.

And that brings us to our secondary primary count. This count forms a new wave [ii] peak in an upward flat but leaves the wave (2) peak in place.  The only price requirement is that (c) of [ii] is higher than (a) and less than (2). So there is a narrow place for this count to land.
Where have we seen this price action before? Oh it just happened to be the last market Intermediate wave (2) peak in May - June 2008.  In that case Minute [ii] took twice as long as the Minute [i] drop, retraced quite deep, and also broke upwards out of a fake Minor 4 triangle.

Prices went higher than (a) - and also less than (2). And it did not strike the big downtrend line from the 2007 peak connecting to the top of (2).
 
Or just a modest higher high. Not enough to touch the "island" top, but enough to form a new [ii] high. This chart actually omits any further fake triangle action and supposes prices just continuing upwards maybe even a gap up tomorrow to finish out.
If we go "gap up and go" tomorrow this is the count to have in hand. Again, this bypasses the silly triangle [e] wave and just heads straight to [ii]. If this happened, the market would be so stretched thin that the selloff may be an amazing sight to behold.
And just so your not confused here is in fact the count for Minor 4 triangle which does imply higher prices than (2). [d] wave would have to count as some kind of double zigzag internally. Since [b] wave is the complex wave (and arguably [c] also), [d] and [e] should be simple affairs.

But the primary count has this as a fake triangle.  If this triangle pattern gets to be well-seen and finds it's way to Marketwatch, buyer beware.
The crew at MarketWatch expresses confusion.  That's because prices are in an apparent triangle action and we have now approached a supposed [d] peak.  Selloff to [e] will really have them bearish and then "BAM" prices thrust upwards and then possibly form a new wave [ii] peak (or fails to break higher than (a) and BLAM! its over, Minute [iii] down asserts itself. See I'm ready for anything!

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