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Friday, September 4, 2020

Elliott Wave Update ~ 4 September 2020

Now that the story broke on the "NASDAQ whale" who was helping to drive this illiquid market higher (as I have been suggesting that calls are driving buying which are driving calls and everyone is front running the same things). It seems that loop may be broken. Once a trade like that is announced, there is very little chance it will keep working as it has been.  But you never now, you got Portnoy's Piped Pipers relentless buy the dips.

Primary count is that the market has topped. It is in the process of tracing the beginning waves down of the coming bear market.
And on the weekly, waves (3) and (5) touched on a parallel trendline of waves (2) and (4). So it is an ideal spot to mark (5).
Apple even had a nice impulse pattern lower.
Squiggles are only 3 waves down though and that is true of every major index (SPX, INDU, NDX, COMP) looks the same. So I'm not sure what to make of it. 

The market topped Wednesday close. We have had 13 hours of trading since. 8 hours of decline, and 5 hours of vigorous retrace where prices have finished less than 38% Fibonacci retrace of the decline. 
Post-parabola price action: Perfect.

We are missing premarket waves on the gap down though so we'll see what happens

Here is the all-sessions wave chart which looks more like 5 waves down. E-minis looks sort of the same. The DJIA doesn't.
DJIA is proposed ending truncated. Elliott Wave's Robert Prechter put out a special bulletin suggesting just that. I've been saying since may that if the Wilshire/SPX reach new highs, the DJIA and NYSE likely won't. So far that has been true.
Yields surged today.
Due to the depth of the selling the last 2 days, the Wilshire "secondary" count was replaced with a true alternate count. Since the pullback was commensurate with June's pullback, the waves may be related. We show that relation with the following top alternate count.

There is no need to discuss this too much at the moment. We have our "virgin space" intact.

This count proposes that the downdraft has just become our new trading range for a while and will last many more weeks. The key though is that the low today is an important low.  It will have to hold firm for this count to take hold and blossom.  I'm not sure the market is done unwinding for the moment (unless they let it wind back up a bnit). The market makers may be willing to try and defeat the NASDAQ WHALE once and for all and cause massive pain along with retail pain. This would require more rigorous selling. Pushing the overnight minis lower would do that trick.

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