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Thursday, February 4, 2021

Elliott Wave Update ~ 4 February 2021


Nasdaq Composite total volume ratio gone mad chart.

I don't quiet understand why these volume ratios keep getting more and more extreme. I have likened it to the fact that the total volume flow to keep the entire Nasdaq Composite at 13,777 induces such a stress on the algorithms that they must flip stocks back and forth between computers more and more and more to keep things from collapsing. Simply put, I think its hard evidence of total market stress. 

The Composite:100 ratio is actually a ratio of a ratio.  The Total Composite Volume includes the 100 volume.  Same with the Composite:SPX volume. There are many Nasdaq 100 stocks in the S&P 500. So it to is a ratio of a ratio.

The NYSE comparison though is "clean". There are no Composite or NDX stocks flowing through the NYSE as far as I know.  Yet the ratio is rising just the same. Regardless, all 3 ratios keep getting bigger and bigger and bigger! This thing is going to blow at some point, I just don't know when that point is!

The total stress seems to be on the Composite (minus the NDX100) itself. All those junky Composite stocks are getting bid to the moon because they have to be in order for the Composite to go to 13,777!  The computers are under stress. 

Here is an example I just picked from the Composite listing by random. PETQ. What do they do? I don't know! Do they earn any money? Well, no! In fact 20% of their small float is shorted they have a P/E ratio of infinity.

But hey, they are trading at $34. Probably a bargain what do I know?



The daily line is set to "invisible" so there is no clutter. But the pink line shows how the daily prints just kept going lower and lower in December/January.  That small trend seems to have broken.  The 30 day MA has flattened so its probably not possible to drop any lower. The 90 and 180 day are creeping under the "extreme complacency line" which they have never done! The groupings are getting tight.

I had been showing this chart in 3,5,10, 30 day MA's in the summer of 2020. But the persistence forced me to change perspective and use much longer moving averages to reflect the insanity that is going on. 

And again, that which cannot go on forever, won't!


Yields and Stuff. 

30 year yield back in the channel.  And we have had the largest yield % increase in 30 year yields over the last year compared to the last 40 or so. This is the real danger in the market. Rising yields from an historic millennial low can in itself act as a gamma squeeze. Duration risk from bonds bought at lower yields will be a strain on bond prices. Which in turn, will strain yields, which will strain prices...see what I am getting at? Yet another overleveraged feedback loop that they cannot possibly control.

If overall debt loads were at a manageable level (they are not!) then this might not be a huge problem. But debts loads are off the charts. We all "know", in fact we all absolutely know, that debts will NEVER, EVER be repaid! We can hold that truth to be self-evident, yet we cannot see the endgame. 

That which cannot go on forever....won't!

And that "won't" is probably very near.

I like my count on prices. It was a tricky count, but that's why you come to this blog. 

Germany. NEGATIVE RATES! Oh my! Yes, ho hum right? 50 years from now they will be saying we were all insane....mass delusion. Chart is looking to escape the down channel. Bullish basing period.
Same with Japan. Talk about debt loads!  Basing, sideways consolidation. Eventually a breakout higher.  In my opinion Japan will experience financial collapse first or be the first major domino. Why? FIFO rule I guess.
Nikkei Weekly. It was all about closing the multi-decade old open chart gap! LOL

Here is FIFO.
Zooming in even further...looks like it could use a new high to close the 30 year old open chart gap.
UK yields on the rise. U.K. is the most fearful nation probably on earth at the moment. Locking down the hardest and extremely violating civil rights over the Kung-Flu. The Brits are an emasculated people. I am sorry to disparage, but they are really taking it up the ass with nary a pushback. 
And JUNK chart. Note there is no A-B-C count here. Its an impulse to the top baby! Junk debt gets more respect than every other debt out there! Its funny, but government debt is leading the way (down) this time around!


One possible way to label the squiggle count. We are either very close to absolute wave C peak or merely wave (i) of [v] of C.

"Squiggle" chart indeed. Wilshire shot up over 2000 points in about 4 days.

And the squiggle above would dovetail nicely with the DJIA which is more of an a-b-c look on the rebound.

The Wilshire 5000 made a new all-time high today as was suspected.  The close above the 50% wave relationship markers could indicate that prices will run toward a very tight Fibonacci 1.618 and .618 dual relationship that resides at a tight range centering around 42,450. 

However, we have a perfect potential non-confirmation event right here at these prices. The DJIA has not made a new high.  So right about here is an ideal spot for the Wilshire to peak.

The top alternate is that we are nearing only (i) of [v], which if true, could mean we run higher to the 42,450 marker eventually in waves (iii) and (v) of [v] of C of (B).
However like I suggested, a top here would all tie nicely into a leading expanding diagonal triangle for the DJIA with a very sharp rebound (which is supposed to happen with a LDET)
The VIX absolutely collapsed.  It may even close that gap sub-20.
I'll tack on more later.

If the market moves toward the Fib relationship mentioned above, it would hit the red upper channel line on the weekly at around....42,450.

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