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Wednesday, November 18, 2020

Elliott Wave Update ~ 18 November 2020

Nasty little selloff at end of day. I suppose price action can be viewed in the context of the long term count from the 2009 low. The market is attempting to break out of the upper channel line. It has already had one little "overthrow" tantrum, and today you could say that the upper trendline rejected prices (for now at least).

Here is the same chart zoomed in.
Again, I am assuming the market holds up and has more work to do. If it collapses from here that would be just fine too as there are enough waves in place to consider the count complete.

If you'll note, the squiggles that I traced out during the summer are intact. Again, its how you label the structures and stitch them together is what makes your overall count. The hourly chart below seems the very best count based on all the squiggle work.  Instead of the early June high being "3" as had been labeled before it now is best labeled as (iii) of [iii] of 3. You'll note that (v) of [iii] finished higher than (iii) of [iii]. So it all works out well. Impulses are still impulses and correctives that are best labeled as some kind of wave two or four are still labeled as such.

One thing that is noticeable is that the first half of the structure achieved great price advances in short time. Now the opposite is happening...a stretched out wave pattern with Minor 4 lasting considerable time versus Minor 2.  Its like letting loose a slinky while holding it in your hand. The springs near your hand are coiled up and the end furthest away starts to elongate and then droop (or is it the other way around? LOL)

The elongation could imply the market is tiring. Again, the Breadth events are very unusual back-to-back-to-back.  Its like a drug-addled addict who, on the verge of collapse gets a boost of adrenaline from yet another dose of drugs.  Yet the effect of the final dose of drugs is merely temporary. Eventually he has a heart attack and dies a nasty death.

IF we get another breadth event - this time a second negative - I would view it as a very bearish development.
I really like this count and feel very good about where things are. Its only near the end of patterns that things truly come together which is of course the moment that everyone bails on EW theory and overall counts.   The market tries to disguise its structure as best it can since there are so many wave counters out there. 

But in the end, it still adheres to rules and guidelines it seems. I never did get my perfect "virgin space" at the middle of wave 3 but its close enough. And we didn't get our clear EW channel either. But neither is required, particularly since there are millions of eyes watching for just such developments.  The fact that the market hid its intentions (and it did it very well) doesn't mean in the end we won't get it right.

Now combine the weekly chart (1st chart above) and this one and you have a nearly completed picture of the count since the 2009 low. Its very exciting!
Tesla seems to be fulfilling its wave count. It requires a new high still though.
Nikkei finally closer to a Fib 61.8% retrace of its all-time peak. RSI pattern fits the wave structure count very well.
30 year yield went back to the underside of its channel.

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