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Tuesday, September 8, 2020

Elliott Wave Update ~ 8 September 2020

There has been no panic yet in this selloff that now sees the NASDAQ off by more than 10%. Elliott Wave International would call this price action "stair-stepping" down. Perhaps in a series of "ones" and "twos".

Lower lows and lower highs. Today's rally was not as vigorous as the one that occurred Friday. 
Each major index was in agreement every step so far. A lower low in the morning and then another lower low in the late afternoon. The Composite and NDX even had lower lows at the closing bell. They seem to be leading the charge. 
Primary count is that the top is in. I mean how many ways can we slice and dice the 11 year rally?
The Composite counts well as complete with a major price channel break.
The VIX has not matched the June selloff peak. Not really any panic going on (yet). But if that is a wedge, VIX prices should be heading higher than the June VIX peak very shortly.
Lower lows in market price, VIX did not panic. It almost looks like the VIX is consolidating for a bigger move higher in VIX price. And that would match the market perhaps consolidating for a big move lower in price - i.e. - the panic moment or "third of a third" wave down.
But we have been here before and Lucy always seems to pull the ball away from Charlie Brown at the last minute. Hence we have our alternate count in that the market will find a price low and rebound hard. 

The count doesn't really "look" correct. But its the best alternate we have for now if the market has not yet reached its ultimate Grand Supercycle peak.
One clue that the above alternate may not be correct is that the Industrials have already breached their June peak in price. So the above alternate doesn't work well in the INDU. Also the INDU is a proposed truncated 5th wave which is of course, a very bearish setup.  Truncated 5th waves are, in effect, second wave rallies that end and 3rd waves follow.
Tesla and Apple seemed to have lost the mojo at the moment. Once a stock goes parabolic and when the fever finally breaks, it very hard to regain that lightning magic in a bottle and turn it all back on again. 

Probably Tesla will rally $100 since I posted that LOL. Updated chart from last week. It wasn't invited into the SPX because Elon Musk is not politically correct enough.  Yes, the stock market has become a politically correct institution on its face just like society.  
And Apple had a long term trendline goal which it hit and has retreated since.
GOVERNMENT DEBT.
10 year prices have held at support. But there is not much support underneath for quite a while.
Our 3 month count. Hrmm, we have upward movement as our count was suggesting. Lets see if it follows through.



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