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Wednesday, December 2, 2020

Elliott Wave Update ~ 2 December 2020

The market is holding up but sentiment in most every investor survey (NAAIM, Investors Intelligence, AAII, etc.) are all reaching or have reached multi-year extremes. The CPCE put/call ratio has seemingly becoming its own gamma-making machine and its extremes are reaching all-time marks. Its incredible in light of everything that has occurred in 2020. 

The computers (software) controlling all this market frothiness are fraudulent. (Sound familiar?) Spoofing the little guy, raking in millions for the big guys and taking everyone for a ride they will likely regret. And of course breaking the market social contract in the course of the collapse.

How is it we have fair pricing when computers are literally bidding against other computers based on other computer-generated headlines?  It will not take much to disrupt the system (yet again). The only reason it hasn't is because social mood, although rolling over at the Grand Supercycle and Supercycle level, have held up at Cycle, Primary and Intermediate cycle wave degree.  

No one actually knows how much "tipping" point of real selling (conscious human decisions to "get out") it will take to cause the software to flip in reverse and destroy in lightning fast time that which it had built on a long, shaky, fraudulent foundation. The passive investors will get crushed. 

At some point the market will discover everyone's selling point.

How long will that take? Well the CPCE is now almost reaching extreme at the 90 day average.  This has never happened and the 180 day average is fast shooting down from behind.  My prediction is that one day in the future, both averages will reach the opposite red line after a long, arduous collapse has occurred. 

And the extreme NASDAQ Composite volume ratio averages I have been showing is, I believe, proof of the computers reaching extremes on their own. The algorithms are like extreme carb eaters, and once fed a steady diet of ice cream, they have adapted to keep going. Thus the ratios are getting more and more outrageous. The algorithms simply cannot stop the path down they are going. There is no intervention!

This is why a human can eat until they are 1000 pounds. The fat regulation system (driven primary by insulin) can be programmed to cause a human to gain weight until they are utterly immobile.  Metabolic syndrome sets in quickly. But one has to have pity, because the body's response to lack of carbs will cause the person hardships and they will have almost no choice but to continue down the path to their own episode of "My 600 Pound Life". Unless that is, until they can be taught the why they get fat (fat regulation system gone haywire) and what to do about it (cut out the carbs and get their insulin system back into proper rhythm).

It seems the same with the algorithms now thoroughly dominating the markets and feeding on a massive glut of passive investments. They have adapted and the extreme ratios will keep getting more extreme until the system utterly breaks. 

On the one hand you have weekly regular injections of (made-up) money called passive investing (like how you invest "X" amount every week into a 401K index fund that your corporation borrowed for you). Even if you handed your money to a "manager", they are now following the herd and are just as passively investing as the next guy. 

On the other hand you have a smaller contingent of Robinhooders, who should not have much effect on the markets having in fact, an outsized effect at many times. 

Simply put, the system is being setup for a massive negative "shock". Once the squiggles count to the end, it could be anything that trips the market. Why? Because it will be overly ripe to reverse. 

And once the algorithms have "learnt" and adapted to an upward market all they could to their extreme limits (which they are likely nearing), the effect of "unlearning" and reversing this behavior is likely to have an outsized effect on the markets.  Outsized "sigma" move events to the negative are probably on the horizon. And when the computers finally are considered "broken" they'll likely unplug them which means humans who have also unlearnt how to handle a massively fraudulent market such as we are in will utterly fail too.

Once social mood is all aligned to the downside at the top 5 wave degrees that we track, real selling will kick in and as I said above, everyone's selling price point will be discovered. Everyone.

The extreme ratios are the footprints of the computers spoofing each other with fake volume. And in their ever increasing attempt to chase gamma, they are reaching their extremes.  Like the 600 pound person who does not commit to reversing course, they will eventually break.
The counts. Tonight I'll just toss a couple of charts and variations on the squiggles. I have no preference. But we cannot be too far away as based on all the sentiment extremes mentioned above.

The weekly: I'm wondering if we hit the RSI trendline on this chart or at least make it to 70 (overbought) on the RSI. That would likley to occur with a few weeks just by hunch.  For a projection, the blue line sits at 21 Dec and the red line at 18 January.
I'll just show one variation after another.  Here is a small ending diagonal variation.
Here is a variation that has wave [v] fulfilling a bit further up. Maybe the electoral college vote on the 14th seals the peak.  Social mood suggest the vote will occur as scheduled, and Biden will win as expected.  But I think the market will utterly collapse regardless soon after. Trump will have presciently deduced the market will collapse under Biden/Harris and Trump will not suffer any social mood negatives as a result. He will not be blamed.

In other words, Trump is going out a winner on top! And he'll remind the public of that for the next 4 years.
And thus the "winning" election will have resulted in a "Pyrrhic" victory for the Democrats.  Of course they will have no trouble evoking Martial Law, mandatory vaccines, and whatever else is required if need be (and you can include a lot of "Republicans" in that regard too). Democrats have already proven to be the most draconian in that regard when it suits them.  Or to unleash the Antifa/BLM goons on the populace when it suits them (but this will backfire on them because this will ultimately turn into a class war). And then of course the real social mood downswing will be in full tilt for the entire population.

I wonder, when the Democrats get full control, will they help engineer a total financial collapse because that's what they want to happen?  I just don't understand why that is not a reasonable stance to take.  After all, they are already practicing total population control with Covid shutdowns, checkpoints, mandatory masks, shuttering churches, and squashing small businesses in a random manner. The ruthless and godless have great power on this earth (and none in Heaven). 

The real danger of course is that social mood is still relatively near an all-time extreme peak and the population is still relatively peaceful, patient, and mostly docile. Even the inner city riots have died down. But whoever is in charge is going to get way more hardship than they anticipated once the final rollover and downside alignment occurs.  You may end up regretting getting elected to any position, anywhere, from any party.

Another squiggle variation. This holds the market up until perhaps the very last day of Trump. He will literally go out the all-time stock market winner!
Nasdaq weekly. 
I have accepted the reality that Trump won't magically be seated for another term, there seems to be too many forces aligned against him from both major political parties and the judicial system of this nation. I accept the reality that Biden will likely take over as per scheduled.  

But I have also accepted that the social contract that has kept this country together is no longer intact.  And then again that is what Elliott Wave theory is all about so it doesn't surprise me. It was in fact, predicted.

Each side vehemently blames the other. But beware the most ruthless and godless, have great power over this earth and thus others (for now). They are willing to fight harder, lie, cheat, steal and break every Commandment to eventually dehumanize you to the point where it is easy to convince others to commit murder and genocide on their behalf.

Most have never studied history. But they meant for you not to study human history and human nature and all the evilness that comes with it at great mood extremes and major turns.

Its about to get real folks. 
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