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Tuesday, September 29, 2020

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.

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