Elliott Wave Update ~ 30 September 2020

Prices have rallied a tad over 50% of the entire decline over the past many days since the low. This indicates the best bearish wave count is that the market is in wave [ii]. Also, a potential base channel has finally formed from market peak. This "base" channel should be containing prices toward going lower in a stair-step manner and eventually will plunge through the bottom in an acceleration panic "third of a third" down at some point. Well, that's the ideal bearish Elliott Wave scenario anyways.

So the squiggle count would look like this. Minute [ii] would take the form of a complex corrective combination structure. (Much like our proposed Minor wave 4 took the form of a complex corrective combination count - see chart above)

This chart could still be labeled [i]-[ii], (i)-(ii), but since the low, a 5 wave impulse up exists which really can only be labeled in a bearish manner such as I have below as wave c of an expanded 3-3-5 flat.

The other possibility is that only wave (a) of [ii] has formed and wave [ii] is taking the form of a 5-3-5 zigzag pattern. In this case, expect wave (b) pullback in some manner (likley into the gap below) and then wave (c) will be another impulse upwards finishing the zigzag pattern to [ii].

The top alternate count that has the market eventually making new all-time highs would have the recent up move over the last few days wave [i] of 5 up. This count sucks but if there is a new high, than its the best interpretation.  Minute [ii] pullback would form a potential inverted head and shoulders bottoming pattern.

Note how the count does not change the basic substructures, it merely rearranges the labeling in how the substructures connect. 

CPCE. Amazing they are trying to re-light the fire that brought about the August surge. They damn well may succeed. There was no panic in a 14% correction of the Nasdaq...

And finally a red candle on the monthly. In September. 

10 Year yields. The wedge count is losing its potential. Unless the stock market horribly collapses right here and now (our Minute [ii] count suggests just that!) and scares everyone into bonds for the time being.  Its getting interesting...

Elliott Wave Update ~ 29 September 2020

We've shown 2 ways to count a bearish squiggle count and tonight we'll add a third. They all basically imply the same thing(s) in the long run. The 4th count is that the market low for Minor 4 of Intermediate (5) to new highs is in and the market is working on the recovery to eventual new market highs.

The bearish counts in order from most immediate bearish to least immediate bearish.

1. Series of ones and twos. The market should break lower harder no later than tomorrow in this count.

2. A very long winded Minute [ii]. This is bearish in that once 5 small waves up from the low forming the final corrective pattern of [ii] is confirmed, the market should turn lower.

What's potentially nice about this count is that a proper "base" channel could form from the peak.

3. This is a new count in that it can be considered that Minute [i] ended at the price low and the market is in Minute [ii] up. Yesterday's overwhelmingly positive up volume ratio in the SPX would be the kickoff for [ii]. In this scenario, the market has much more time and freedom to retrace any length back upwards as long as new market highs are not met.  Therefore the market has much more time, perhaps a week + and can find its footing to retrace a good amount.

This count presumes wave v of (iii) of [i] ended in a small truncation resulting in the odd rally wave to where we have (iv) marked.  This would then account for the a-b-c pattern (and not a 5 wave impulse) that followed up to (iv).

However this count is a bit contrived.  The wave (iii) assumes truncation and has a big blob of waves in the middle of it which is not ideal. The entire structure is a wedge. Wave (ii) is very long-winded compared to wave (iv). 

But sometimes the market likes to hide its intentions as best as possible.  Wave (iv) does not overlap with wave (i) so in that regard its a conceivable pattern.

Elliott Wave Update ~ 28 September 2020

Another overnight induced manic open. The sustained up volume ratio on the SPX daily was by far the highest since the March 24th "kickoff" day for Wave (5) to new all-time highs.  This is quite a development and it portends to either a "kickoff" to wave 5 of (5) higher (alternate count that market highs are not yet in), or the market just "shot its load" so to speak in a furious attempt to keep prices from plunging in wave [iii] down.

The other major up volume ratio day came prior to the March 23rd low. In fact the next day, the market was 12% lower. So in that context, today may have peaked in wave (ii) of [iii] down. 

There is another possible way to label the bearish count although it really doesn't change anything.  A move to the parallel line from the peak would finish off wave [ii] - or if you prefer wave (ii) of [iii] - and form our "base" channel from peak. We'll see. Every time I anticipate that this channel will form, it doesn't.  If it is going to this is the place.

Here is the alternate count to market new highs. The count kind of sucks and doesn't look right. But its the best we can do with what has occurred so far.

Elliott Wave Update ~ 25 September 2020

 

Elliott Wave Update ~ 24 September 2020

Well, the market immediately moved lower confirming 5 waves down to form wave (i) of [iii] from the Fed Day peak of last weak labeled Minute [ii].  Prices landed on the proposed bottom shelf of the base channel line and bounced today but only in 3 waves before pulling back.

We have a big target box for Minuette (ii) of Minute [iii] down. It has already met the minimum corner; however Minuette (i) down took 5 days so we can expect perhaps an appropriate retrace as a result.

Prices overlapped the June peak which begins to eliminate certain bullish counts to new highs.

And the view from our head and shoulders pattern. Note how the gap above (neckline) in early August to start forming the large topping pattern is now a potential resistance.

Weekly:

The only real viable alternate count left (in which the market highs are not yet in) is that the early September peak wave the top of wave 3 and that wave 4 is taking the shape of a zigzag and forming a bullish falling wedge pattern. 

Elliott Wave Update ~ 23 September 2020

 Yesterday's update was stated we need another move lower to confirm the bearish count(s). The market made a great effort today to get there but didn't quite make it.  We'll see what the overnight brings.

Potentially we have a very steep base channel where all the beginning wave ones and twos trace out. At some point if the bearish count pans out, we should have an acceleration breakdown through the bottom in a "third of a third". We could be getting close to that point.

In the squiggles we had a very tiny technical violation of wave iv overlapping the bottom of wave i by a mere 3 Wilshire points. Not going to quibble about that.  These things are rough patterns when starting out from a major trend change. 

Here is that stealth head and shoulders pattern I showed the other night. It was rejected at the neckline today. That's bearish price action.

CPCE incredible. SPX has lost 10% from peak but the desire to buy calls well over puts is just incredible still.  This is bullish. The drop from peak really hasn't shaken the bulls desire to try and make this market go higher.  The non-panic in the VIX is also an indicator. The market seems setup for a real third of a third down in these regards.  I guess we'll see.

And look at the 90 day moving average. Its still falling!  How much selling would have to happen to make this average go back just toward its chart high? For if this is the beginning a bear market that may well be a wave degree higher than the Great Depression, surely that 90 day moving average will some day travel back up...

Elliott Wave Update ~ 22 September 2020

Well, since the recent Fed Day peak of [ii] the market has traced only 3 waves down. Ideally, we should have another wave lower immediately to form a 5 wave move from that peak as a minimum.

So despite all the selling as of recently, we need another move lower to confirm the larger count(s).

There may be another possibility; that the market has not yet finished Minute wave [ii] flat count. The move lower would be wave (b) of [ii] and now we are starting wave (c) which should carry prices above 50% retrace of the entire decline. This would be the relentless dip-buying that has not yet abated.

The top alternate count(s) of eventual new market highs are still intact. The June peak was not yet touched in prices which is important for the bearish case as it would start to eliminate the bullish count(s).

So we technically could still have this as a count; but prices cannot really go any lower or else overlap with the June peak would invalidate this.

But the move from peak has become quite large and it may actually relate to wave 2 rather than a subwave [iv] of 3. This count kind of stinks because it has the middle section of wave 3 as a jumbled mess as opposed to the beginning and the end sections. That makes this count suspect. But we can decide all that if the market makes a new all-time high, that can be debated at that time. 

Elliott Wave Update ~ 21 September 2020

One possible count:

 

Elliott Wave Update ~ 18 September 2020

Lucy is holding the football. Charlie Brown is lining up to kick it. This is a lovely bearish wave pattern.

Elliott Wave Update ~ 17 September 2020

Its seems like a long-winded (and stealth) head and shoulders topping pattern.  Which implies prices are at the far end of the pattern. Which implies massive downward implosion. Ok yeah, sure.

Non-log scale:

The NDX made a lower low today. Leading lower or bullish non-confirmation? I don't really care.

We are near one of those crossroads in which the bearish count and the alternate bullish count are just about diametrically opposed. One or the other will win out and I'll tell you, the bears have had no luck at these stages for the most part. Its Lucy, Charlie Brown, and the football. So you should probably just go long. I'll remain bearish, but like I said, I'll present the options, you decide. Buy "Safespace" on the dip. Jeesus. I hate this market....

And figure the inverted head and shoulders pattern will probably be the golden ticket...

And yes I seen the potential of this pattern developing 3 days ago to close the gap that existed which today it closed very conveniently. I am just that good, I refuse to give in to my inner bull though. But here, have at it. Every bullish pattern seems to always work out and then some. So here you go. Maybe my upwards thick blue line is too steep. 

Every day the fraud grows deeper. We are forced to swallow lies. And now they are trying to force us to repeat them.  The market is just a reflection of that greater social mood.  The financial fraud continues. 

And no, I am not trying to say the waves are lying. I am trying to say they mean just what they mean. The market is always correct and I truly believe it. I just believe it is in the final fraud stages and yet every day it is harder to swallow.  Its in the final herd stages and that may last a few more months, who knows....

Elliott Wave Update ~ 16 September 2020

Primary count is that Minute [ii] peaked today on the Fed "news" in a downward flat 3-3-5 count that retraced the entire decline a healthy 47% or so which is adequate for a wave [ii].

Price action today appeared on several occasions that wave iii of (c) of [ii] was going to charge uphill in prices. Ultimately they reversed lower both times.  Therefore wave (c) could have ended in a messy ending diagonal count as labeled below. This implies exhaustion.

Note the up volume ratio at the peak price today on the NYSE. Is that a buying climax? What should have been a "third of a third" wave up punctured a tire.

At any rate, if this is Minute [ii], it is getting "long in the tooth".  After prices collapsed in about 8 hours of trading from peak we have had 8 days of possible bearish consolidation. The consolidation may be over and the market primed for a big wave [iii] lower.

Apparently Chairman Powell can guarantee low rates for 4 years despite the huge amount of record debt sloshing around. We'll see how the market tests that theory.

Elliott Wave Update ~ 15 September 2020

The only index of the 5 we have been watching to break price above its recent pivot high was the DJIA. But after that occurred it was the only one to go into the red before end of the day.

The Wilshire just missed making a higher high above its pivot.  There are still many short term options here. Until the pattern develops more or confirms what is already labeled as [ii], we just have to be ready.

I know the market doesn't "feel" like its going to collapse here. I'm not "feeling" it. But we are not supposed to feel it coming!

The Minute [ii] flat count has enough squiggles in place to consider it complete and has achieved  a decent price retrace of the total decline.

Transports made another pivot high. This may be a small swing non-confirmation with the Industrials. It could mean nothing, but it could be a small signal for a bearish turning point.

DAX is an interesting pattern.  Bearish wedge that falls short in price?  If it has one more move up, then likely the U.S. markets are moving up to a higher Minute [ii] price also. So its worth watching.

CPCE. Back into the extreme territory. Nothing new for the past many months.