Elliott Wave Update ~ 19 October 2020

I wasn't able to update Friday so lets see where things stand.

Well, we'll post the potential squiggle counts. If [ii] topped, its generally downhill. If 5 still requires a new all-time high , well, then we haven't topped (duh). So far, neither count has been outright eliminated.

However, if its [iv], we have about reached the limit of decline in which the count would still make sense.

Elliott Wave Update ~ 15 October 2020

 That's a decent impulse down from the recent high and a gap-covering wave ii rebound. We'll see.

Elliott Wave Update ~ 14 October 2020

The squiggle count is at its most ambiguous on the 5 minute chart which probably means the market is going to collapse straight to hell. 

This was yesterday's CPCE data (I won't get new data until much later). Its insane.

Elliott Wave Update ~ 13 October 2020

Tonight's chart combines last night's top two counts into one squiggle chart because I'm feeling lazy and its a pretty clear picture regardless. Consider them both "primary" counts at this stage because both counts suggest that even if new highs come, this wave up is almost over.

The first count is that the market does not make new highs and and its counted as Minute [ii]. 

The second count assumes new highs in the Wilshire and wave [iv] and [v] of 5 will trace out.

We are at SPX 3500 and the VIX keeps diverging higher ending the day at a 25.99. This is not a calm market. There is a lot of tension underneath. Its like playing craps and you think the dice is hot, you can't be beat, and you keep going "all in" on the bet. Sooner or later the house wins. Always.

Elliott Wave Update ~ 12 October 2020

Primary count is that wave 5 of (5) is tracing higher and will eventually become new all-time highs. It almost made it today. The count below is not ideal, however, there is alternation between waves 2 and 4 (flat versus zigzag) and breaks no rules. 

Of course our old count is not quite dead yet...

There was a very significant breadth thrust event triggered on the NYSE after last Thursday's close. It was not a Zweig event, as that requires a thrust from below .40 to above .615 in 10 trading days or less.  After crossing back up over .40 line, it made it on the 11th day.  This is the second breadth thrust event on the NYSE since March. the first event took 13 days to trigger. 

Thus you could argue that this event is "stronger" than the first because it did it in less time. However, looking at the 2 events there is a huge disparity between gains. 26.9% in the first event from close to close. This last event? 6.7% from close to close. I don't know if that's a significance, but its something to keep in mind.

Of course, if the breadth event ensures the market will continue higher into 2021, we would have to consider the following count in play. This would keep our count that the early September high was a 5 wave move just like I counted, however its only wave 1 of (5). 3, 4 and 5 would be much smaller most likely.

But its way too early for this speculation. I'm throwing it out here for those who consider the breadth event a long-term game-changer.

Ellliott Wave Update ~ 9 October 2020

Well, as suggested the last few days, the primary count probably suggest the market will incur new highs eventually or at least challenge them which you could say is already happening.

However its likely a fleeting moment in time. A last charge up the hill before final defeat. There are open gaps up all over the place on the Wilshire 5000 and these should be filled in due time. 

 

Elliott Wave Update ~ 8 October 2020

 The waves are impulsing up in 5 wave moves. I can assume this may be the true primary count. 

I mean look, they managed to relight the fire under the CPCE...calls going through the roof again. Its simply stunning. Hey, if the market reversed course and simply collapsed from here, we wouldn't be surprised. The bets are all still very one-sided.

Not sure if the fires can be relit for bonds though, and that's what really matters in the long run. 

Elliott Wave Update ~ 7 October 2020

 This is what's probably going to happen. If not, its going to go down.

Elliott Wave Update ~ 6 October 2020

We have an ideal wave [ii] zigzag structure which has retraced a tad of Fibonacci 61.8%. 

Yields finally snapped higher confirming that we suspect the all-time low in yields is "in".

Elliott Wave Update ~ 5 October 2020

 Not yet a higher high. Probably will happen though.

Squiggle count:

Elliott Wave Update ~ 2 October 2020

This about sums it up for the moment. Either [ii] topped or it didn't. That's the immediate challenge anyway. Lots of squiggle options for the intraday possibilities.

And the alternate count that the market has not yet peaked.

Elliott Wave Update ~ 1 October 2020

Primary count is the market is tracing Minute [ii]. There are a lot of potential variations of how this would take shape. Below shows just a couple of potential variations. There is also a gap down variation but you get the idea.


Yet, stripping away all the labels and we are left with a bearish pattern of lower lows and lower highs in an expanding downward-looking megaphone that really has yet to be broken. The pattern below is not a bullish pattern, it is generally a bearish one. Something still must occur to break the bearish pattern in order to become a bullish pattern.

That seems simplistic but sometimes you have to just look at structures how they exist right now, not how they may exist. The way this pattern exists right now, is that prices will get slammed downward hard to even lower lows. Now of course that may very well not happen at all - and we are fine with that - however, buyer beware of what exists...