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Thursday, June 4, 2020

Elliott Wave Update ~ 4 June 2020 [UPDATE: 7:30PM EST]

CPCE readings. Just wow!  Its like the VIX chart. And it looks like a giant falling wedge.
I went back 4 years...3, 5 day moving averages even lower than the cluster at the peak.
5 day moving average for last oh, 16 years. Its a record drop from all-time high panic to all-time bullishness all in about 10 weeks. Amazing. The record fast market drop to the March low did epic, historic destruction. The rise of wave (2) does not represent epic recovery. Cognitive Dissonance of record proportions.
Ok lets review the bearish setup and why tomorrow might just be a terrific plunge that catches all the Robinhood traders holding the bag.

1. A five wave count from all-time high implies this rise since the March low is countertrend.  Has made an elegant A-B-C profile on waning internals with each impulse leg.

2. Record bullish readings on the CPCE. It may not be a perfect timing indicator, but there are no bearish bets in the market right now to speak of.

3. NASDAQ 100 new All-time high, everything else well beneath still. Composite still beneath by a decent bit. Final ending diagonal triangle with overthrow and likely reversal on both the 100 and composite. Wedges are bearish. Record non-confirmations can be bearish.

4. Civil hot war has already started. Probably proof that this is a Grand Supercycle peak and subsequent rollover. 

5. Cognitive Dissonance is actually way more pronounced here at wave (2) peak than at the all-time market high. This is often the case that the first wave (2) would exceed readings from the all-time peak. We have seen that with the CPCE. It is obvious when you look at underlying economical fundamentals that there is a severe disconnect that is astounding here at wave (2). You could at least make an argument at the all-time high that it deserved to be at an all-time high, but now we are just all bullshitting each other at an epic level. Yet the talking heads invent reasons for it all. Of course they do. Lets wreck 100 American cities...maybe if we wreck 200, we'll get another DOW up 5000!

6. VIX impulse count looks complete. Intraday divergence, VIX plunged well to new lows, total market (Wilshire) failed to make new highs.

7.  A predicted June 3rd peak with predicted range of 31,825 (wave C = 1/2 of wave A) to 31,907  (Fibonacci 78.6% retrace). The morning high yesterday was 31,824.3 and the afternoon high was 31,905.8.  That seemed to be guided by Angels so I won't ignore it. 

8. Possible intraday setup for a series of small 1's and 2's down imply tomorrow will see a significant wave three down.

We'll see I guess.  Everything is teed up like a baseball ready to hit out of the park in an epic wave (3) down.  

[UPDATE 615 PM EST]I had to change wave [iv]'s triangle to make the count work.
The worry is that the same sideways pattern is playing out just like at the peak many years ago. Sideways then down.  Is the same happening here but in a mini version? Signs of distribution at a peak?

Primary count is that wave (2) topped yesterday at Fibonacci retrace 78.6% (31,907.5). Actual was 31,905.8, less than 2 points from perfect. So far that has held which implies wave (3) down has begun.
Note the profile indicators on this chart. It fits the weakening A-B-C count. 
There now may be a series of small "ones" and "two" forming to the downside intraday. The potential energy is there for a big gap down selloff tomorrow confirming wave (3) down.
Daily. Doji candle. Market forces battled but equaled in the end. Dojis near a top could = exhaustion. 69.83 RSI high seems perfect. It really shouldn't go above 70 for a wave (2).
Everything hangs in the balance. The Wilshire has created a "blue virgin space" where the third of a third wave should exist in an impulse pattern. It partially closed today (expected). It can close some more as long as a sliver stays open, the bullish count is alive.  It has seemingly committed itself, there can be no more "ones" and "twos" up, only follow-through and the creation of a bunch of nested "threes","fours" and "fives" to higher prices. If it is to go higher, it is probably now or never. Place your bets accordingly. 

If the market plunges (primary count) the UP count(s) are obviously dead.  But we must show them, because we have retraced 78.6% and that is a very deep retrace. Any more up and we are looking at the top alternate long term count possibilities becoming the primary long term counts.
The top 2 long term alt counts would depend on if we get 3 waves from the March low or 5 waves. 
NASDAQ 100 new all -time high in a wedge with overthrow and reversal. HUGE disconnect with the rest of the market.  If its a true wedge, prices should collapse. Since we are proposing that wave (3) in the Wilshire has begun, this matches overall market counts.

VIX count could be over.  It should be over if (2) is over. There was a significant divergence today in that the VIX went plunging to new lows and the Wilshire 5000 did not make new highs.  And then it broke out of the tight channel in which it was a "thrust" down from a triangle.

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