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Monday, June 8, 2020

Elliott Wave Update ~ 8 June 2020

The Wilshire has retraced 87.3% of the drop to March 23rd.

So far the rise from the low is 3 waves.

If the market peaks (but does not make a new all-time high) in a 3 wave pattern from the March low, it is "corrective" and implies the Grand Supercycle ended at the February peak.

If the market traces 5 waves from the March low and achieves new all-time highs, it is the final impulse in Grand Supercycle wave [III]

All of the above options are terminal. If C of (2) or (B) peaks, either wave (3) or wave (C), minimum, goes back to the March lows to either continue the pattern or complete the pattern.

If wave 5 of (5) of [5] peaks for a new all-time Grand Supercycle wave [III], the market is due for a historic drop.

Regardless, the main task at hand is to find the peak of either Minor wave C or Minor wave 3. That has been the challenge for the past few weeks no matter how you look at the bigger picture.

If its wave (2) it should end prior to reaching 90% retrace.  Thats just a guess.  Anything above 90% can be probably be considered a possible (B) wave in a 3-3-5 flat pattern (if there are only 3 waves from the March low).

So the window for (2) is reaching its credible limit. Possible count for C of (2).  Wave [iii] and [iv] are adjusted from the weekend count and this probably even "looks" better.
Here is another count for the wave (2) or even a wave (B) that takes the market eventually through the open gap down from the February drop. If the Wilshire retraces over 90%, one could make the argument that it is wave (B) of a flat pattern in work. This still implies that after wave (B), a drop back to March lows in 5 Minor waves will be required to complete the 3-3-5 flat pattern.

And of course it would all work out simple in the end if the market is instead tracing out 5 Minor waves to a new peak.  We have yet to confirm the top of 3 in this case, so there are no definites.

If its this pattern below, the market is due for a big pullback in 4. But first the peak of 3 has to be confirmed.
And closer look of the squiggles.  If this is accurate, it'll probably be choppy water for the next few days going into Fed Wednesday. Peak of [iii] of C or [iii] of 3 is where the RSI probably surges to its peak on the daily.

No Divergence on the McClellan yet. Still ripping higher. This is a good indicator to help find the peak of C or 3 if there is a small divergence.
CPCE. I guess they were all winners afterall. No divergences.
Last time 10 day MA was this low was peak of wave (1) a long time ago.
A closer look at that time revealed a small down and up to peak which resulted in a divergence. This might reveal possible divergences to find the top of C or 3, whichever you prefer. Or it could all just end tomorrow and all bulls get the hot love shaft.

Similar CPCE setup back then as today.  Even though the market was clearly rallying in a 5th wave near a possible major peak, they just kept plowing into calls. Except back then they got a pullback and then a multi-day march to the peak of wave 5 of (1).  The contrarian thing is that we don't get the pullback and maybe this time and the market just pukes its guts out.

Vix. Gap down, then gap up. The wedge pattern is intact. To follow-thru, VIX needs a big jump up. This could imply that C or 3 is over or nearly so. We either get big (3) down, or wave 4 then 5 to new highs.  I'm still thinking big (3) down.
Wilshire went past the point where C = .618 x A but the SPX is on the verge of a perfect ratio. Just shy a few points.
Monster volume on Wilshire again. Points travelled since March low = 11,035.14.  Within .81% of Fibonacci sequence # 10,946.
Not quite ready to say no to the wedge on the NASDAQ just yet. However, it would have to collapse like really soon, as in tomorrow. Also I assume everyone has their NASDAQ 10,000 hats ready.

Monster volume again.

Sometimes the market has a way of making us disappointed though. Either way, should be fun!

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