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Friday, July 10, 2020

Elliott Wave Update ~ 10 July 2020

Last weekend's post was meant to try and find the NASDAQ peak.  We may have found it or are very close. The counts:

Looks like a hit on the trendline in Arithmetic scale.
2 hour scale in log is a bit short. If we get a final pop Monday, look for a hit in LOG scale on this chart.

Look at the double zigzag on the Wilshire. Repeating Fractals.
The past week is a mess which is one reason I don't usually count the Composite. But it sure looks like distribution again....
I could change the waves, put [i] somewhere else or whatever. It will still look like a mess so I'll leave it alone. However, what's nice is wave [iv] orthodox low finished beneath wave [iii] high. This is the final "bounce" point and in my mind indicates [iv] is finally over. 

What looks funny is most of the waves of [iii] occurred overnight and the big gap up. But it is what it is.
Now here is the kicker.  Perhaps the theme of "compression" is again rearing its head.

Yes, there are actually enough squiggles to count this as complete! We have perhaps again a huge wave 1 of (i) and (i) itself. Then i-ii and then [1]-[2] meandering in price and time. And then the acceleration channel takes off (over the blue base channel) and it gets compressed. The blue base channel line gets backtested which might be the (iv) low based on the backtest wave is the major four wave of the structure in question.

Squint, and you'll see all the squiggles. Of course this implies Monday opens breakaway gap down.
It would be a good spot since the Composite so violated the 10 year channel line.
And parked itself above all containment for everyone to ponder for 3 days. The RSi profile is a classic wave five peak on any scale. Double divergence and a trendline touch.
Nothing really changed despite today's rally although we had to move wave [ii] on the Wilshire and SPX - but again I expected that to happen in last weekend's post, in fact I thought it would have to move earlier than today.  Yesterday it didn't look like it would rebound so high, but I guess the 50/200 DMA crossover event has to flex its muscles. Just so you can ponder that all weekend too.
9 full days of trading is a perfect timeframe for the Composite based on our count and the theme of compression.
Oh and the NASDAQ 100's may have formed an Ending Diagonal triangle.  Was anybody watching this last 3 days how prices were laboring?  That's describes an ending diagonal and then final excitement at the end with overthrow. And its parked there for the weekend! Amazing.

Who was holding over the weekend at this peak is what I want to know? I mean sentiment is sky high there ain't many greater fools left to sell too.
SPX finished at the downtrend line. VIX pretty much did also.
There is still room for a pop Monday. Look, next week will likely resolve the direction of this market one way or the other. There is actually a smidgen of negative divergence in the RSI. Just a smidgen. But in a bear market rally that can be deadly.
The above was shown on the weekend post. It was anticipated it might be higher and would have the highest weekly close since the March low and might show a smidgen of RSI divergence. It barely missed the close but it probably has divergence.
 Ok here is something interesting.

Again a fractal of the entire rally:
Now just wave 5 but its labeled like the total rally. Looks neat huh? That implies the top trendline may be touched.
If we get an early rise Monday, 10,642 - 10,655 is where we would get an early double channel hit.  We'll know Monday depending on what the futures hold.
30 Day ticking down still. The "extreme complacency " line is not meant for the 30 DMA. Again, I use Wilshire to show that its extreme yet the market is not in alignment which makes it more amazing and focused on 1 index only it seems.
Its got the same kind of setup as the February high however the setup has actually shifted lower.

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