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Tuesday, June 9, 2020

Elliott Wave Update ~ 9 June 2020

[Update 21:45 EST]: I added a lot of charts over the course of tonight I have one thing left to say about this historic run we've had here.  The primary count is wave (2). Remember back in the beginning/middle of wave (2) pointing out all the open gaps down that could be filled?

Remember pointing to the breakaway gap at the top and basically saying "If this is wave (2), this top gap should never be filled. I still believe that to be true. If wave (2) ends in a gigasmic orgy of high volume churn that fails at the gap, (2) would still be probably (2) which implies the nastiest (3) down you ever saw next.  Well, that's the theory anyway. If (2) is soon over, naturally (3) follows...

Big day tomorrow, Fed day. Lots of excitement all around now that the NASDAQ Composite has breached 10,000 intraday.

The wave count has likely reached, or confirmed, at a minimum, the top of Minute [iii] of wave C or 3.  Which implies the market is tracing out Minute [iv] and then [v] to finish wave C or 3.

The preferred subcount of where to put [i] and [ii] of wave C or 3 is below.

The reason (also because I like the look) for the preferred subcount is because it is possible to consider (2) complete at yesterday's high. This is to illustrate that there exists enough waves to consider the count complete as is. I'm not claiming it is, I am claiming there are enough waves in place. It would look better if it stabbed modestly higher.

And yes that's a possible topping head and shoulders pattern with neckline. Just stating the obvious. The triangle is quite obvious as well.   The market always has a way of giving us choices huh? One pattern suggests a stab upward, the other quite the opposite.
If the high of C of (2) is already "in", it would look like this below. This doesn't look finished though, wave [v] is very short. However it illustrates that the form would be correct. It could even stab a small amount higher as we already have a possible triangle at [iv] as shown above on the 15 Minute chart.

Again, if the 90% retrace mark from the March lows is not obtained, it still works well as wave (2). Regardless, the short term objective is to find and confirm the peak of "C" or "3".


The other count is that the market is working on 5 waves to a new all-time high on the Wilshire. In this case wave 3 will peak somewhere, maybe inside the open gap down from February and a sharp wave 4 down to finish above the blue virgin space would be the next likely major market move. This wave 4 will relieve some of the excess bullishness that exists on an extreme scale.

This subcount of 3 is in a form of a bunch of nested ones and twos, and threes and fours with the blue "virgin space" in between. It is an acceptable way to label but only assuming the market is going a bit higher still.  Its neat though how the nesting works and helps you count. But it doesn't work well if yesterday was the peak of (2).

Blue virgin space is key to the entire structure.  The recent gap up is likely only a temporary virgin space that will likely be filled by Minor 4 which should be scary but stop short of wrecking the bullish overall count. This is all an educated logical wave counting guess because every subwave nested four should have its price range revisited at least once. The little range right above the blue virgin space is a small iv of (iii) of [iii] of 3 is a strong target of 4.
Intraday squiggles of a possible wave [iv] triangle either completed or a bit more choppiness tomorrow to complete it.  Wave (d) would be the complex wave.
Or a triangle like this. You can't rush triangles. They like to try and reform if they can. One of the sub waves should be "complex", usually almost wave (c) or (d). So its likely to be lively near Fed time.
I'll tack on more stuff here later. (or sooner)

BPSPX. Never been a higher high in 20 years. I'm not sure how they calculate this, but it went up today despite the negative day.  Everything is getting boosted and rotated and bid on like crazy. Shit stocks are being bid in a mad frenzy by the hordes of Robinhood traders.  No one cares. There is a serious disconnect that suggests we are reaching a super major peak one way or another. Just how much longer it lasts is why we are counting waves to begin with. Hertz with a market cap of $1B despite bankruptcy. 
Seen on Marketwatch today. Some people probably wonder why I would care about what some silly daytrader says about Warren Buffett or some guy from Wharton claiming the March lows will never be visited again. 

I don't care about that, what I care about is the headline. The way a site like Marketwatch probably works is the "team" has a consensus day to day on what they will write about or post. And its largely based on their mini-herd mood of the day.  That is what I am using to help gauge overall sentiment. 

Remember, the headline could be anything they want it to be, but human social mood and herd theory suggests they write the headlines the way they do because that is how they (Marketwatch) feel and what they want to convey. Then they just go find some schmuck to back it up and its a "news" article.

The other way headlines are written is based on how the market moves then they make shit up to explain it all or go get a quote from somebody and post it. Marketwatch makes the news up as they go. That's the way it works. Their herd mentality shows up in their headlines every day.  

At a major bottom they'll post an "article" on something like "so-and-so says here is why the market is heading likely much lower". That's what they probably feel and that's what they want to write about is the key. The articles are largely meaningless but watching how these guys do their jobs day in and day out is quite insightful perhaps. They watch the tickers. They might be traders. They write the articles. 

For instance at the start of wave C breaking out, they got the guy from Wharton to say "lows will never be visited ever again!".  Then recently after the NASDAQ had made a new all-time high they extrapolated it to everything else and found some other schmuck to say "New highs are coming for the market according to so-and-so!" Sprinkled throughout you'll see the typical "wall of worry" story.

Today they insulted Warren Buffett, called him an idiot, but wrote the article from the angle that some daytrader said it.  I'm sure he did. Whatever, its all crap however you can see how the sentiment keeps shifting to outright bullishness to the point of arrogance.

So to review the shifting sentiment toward more and more bullish...1) market lows never to be revisited  2) New highs are coming!  3) Buffett is an idiot and daytrading is super easy! 

That's the mini herd of the financial guys at Marketwatch wearing their sentiment on their sleeve and masking it by getting someone else to say it and then blaring the headline. That's why its so amusing to keep an eye on it all.

Ok just seen this a second ago, these guys and gals are definitely Robinhoodin it.  I won't post anything else, you get my point. Check out the subheadlines….mood of the day, and its getting very excitable day to day.

PS - If someone sees an article on Marketwatch that headlines how "How Elliott Wave Theory got it all wrong (and especially that Daneric guy!)"...you'll know they read this blog. 

CPCE. Oh, the daily ticked up a notch LOL.
The 3 day Moving average. Extremes all around.  If the market thrusts higher still on Fed day tomorrow per thrust out of the small triangle pattern, you'll likley see no divergences on this chart. 

Its fascinating to watch it all and count the squiggles. You can see the 5 day on the right side, I just have that invisible at the moment.

VIX.  The VIX is jumping and that's likely from the outsized frenzied call action going on. Could just be a backtest.
3 of the biggest 5 volume days have come in the last 3 days. Tomorrow is likely going to top the previous 3.
A very heavy downside pressure today despite the "modest" consolidation. 1% down on the DOW, NASDAQ green. Down volume vs up on the NYSE quite heavy.

NYSE as a proxy, there is some serious selling going on and my guess is its the Goldman Sachs of the world unloading everything they can.  You got the Robinhood guys and gals gobbling it up on the other side....and mom and pop who want back in cause they are missing out on their 401K.  I thought for a minute at the end it was going to come unglued and drop hard, but the market makers kept prices up until the end of day.  Well done boys, you made it to "Fed Day" in one piece.
Oh I wanted to show this earlier, the next Fib relationship for wave C or 3 to wave A or 1 is .786 x A or 1 @ 34,089 which would just be enough to close the open down gap and stay below all-time highs.
If we get a wave [v] higher, and its healthy enough, it just might make I there.
Happle Stock. 5 Big waves.
A closed look at the last wave (5). Maybe another up and down and blow off peak?
LMT. Gap filled. It looks complete, wave [v] has (v) small waves if you look.
McClellan. See why the wave [ii] of C and now [iv] of C is placed where they are? It not only looks best on the squiggles, it fits the biggest momentum pullbacks of wave C so far. (assuming there is another high coming to confirm divergence for [v] of C or 3).
NASDAQ 5000 in 2000, 10000 in 2020. Something very zen-like about that.

5,132 peak in 2000. Doubling that is 10,264.

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