Month: March 2025

The [a]-[b]-[c] up to Minor 2 is practically a 1:1 ratio. A 3-wave pattern up which is corrective which implies the main trend has switched and is down.

We have a 3-wave corrective up to Minor 2. Is that enough? The overall structure and count looks good so it’s the primary count.

Today wasn’t conclusive, but the price action leans toward a Minor 2 wave up in progress. So, the primary count would be thus:

The above is not the best-looking Elliott Wave structure, but it has a more impulsive look to it rather than corrective.

The top alternate is that prices must immediately fail come Monday and head to a lower low to prove out wave [iv] of 1 down had peaked. More sideways mess would indicate Minor 2 up as in the chart above. But it’s starting to not “look right” as an EW structure. Had prices ended today at a low-of-day, then this would have remained top count.

The SPX is at a crossroads. The primary count is wave [iv] of 1 down peaked today in a 3-wave pattern zigzag. This corrective wave contrasts with the proposed wave [ii] downward flat. Time-wise wave [iv] should have ended today. The next wave [v] of 1 should be down to a lower low to Minor 1.

Any immediate higher prices complicates the count and probably indicates that Minor wave 2 is tracing out. This is what makes the pattern interesting.

The CPCE does not show any panic. Only bullishness. The majority of the equity options market is bullish on higher prices from here. It’s not necessarily a short-term predictive chart but it does display a still overall sense of complacency within the overall market in general.

The talking heads speak of a bit of panic in the air and perhaps that is coming true. But as the saying goes, don’t do what I say, do what I do (or don’t do). So, let’s look at the actual put/call ratio – CPCE – the put/call action – as of Friday’s close (I won’t have today’s close until tomorrow on Stockcharts).

Long term is way more complacent:

Shorter term shows zero days of panic as of yet. Nothing even close to the panic line on a daily basis. So don’t listen to the hype of the talking heads (blood in the water sells!). Look at what the actual money is saying. And that money still reflects an overall bullish sentiment rather than not.

3 charts that show a disparity in losses.

The NASDAQ has lost the most so far:

With the SPX almost touching “correction” territory (-10%) today. And by the way, this squiggle count is a best guess wave structure at the moment. Flawed? Does it look corrective down or more getting on with an impulsive look down? It doesn’t scream “3 waves” corrective so I tend to lean toward impulsive down.

The daily shows a drop beneath significant horizontal support. What this means is that everyone who bought the SPX since about Sep 2024 is in risk of losing money. So any gains from here cause people to bail to “get out”. That is the psychology of support/resistance.

Yet the overall drop from a log scale is really just a blip, isn’t it? This is reflective that there is really not yet any true long-term panic despite whatever talking head wants you to believe. Blood sells! Now that the “evil” Trump is President, the media wants failure of the markets.

And finally, the Dow Jones Industrials are still standing tall as can be. The loss from peak is a little bit more than half of the NASDAQ at this point. But I think that’s how it was in 2000….

The count is very good. This Elliott wave structure has many good things going for it:

1. (Red = Intermediate) Waves (1) to (5) and (2) to (4) perfectly connect on a very precise parallel channel trendline(s).
2. The subwaves are all there.
3. Wave (5) seemingly ends in an ending diagonal triangle (EDT).
4. The “proof” of the ending triangle is that prices collapsed to beyond the starting point of the EDT. That occurred today.
5. Corrective waves (2) and (4) alternate in form. Flat vs. zigzag. This is a good EW structure trait.
6. Peak RSI on the medium and long-term charts is where we expect it to be; at the subwave 3 of 3 or wave 3 in general with declining RSI strength as the wave structure advances to peak.
7. Prices bounced perfectly at the long term lower trendline. This could be the wave 1 down low. We shall see if a significant bounce occurs. It would be the logical spot.
8. Additionally, prices reached a significant horizontal support line. A logical bounce spot.

All in all, a very nice structure. And we are going with it!

Long term count:

Squiggle count seems OK.

Conclusion: The overall wave structure from a long term, medium term, and short term seems to indicate a long-term trend change. In the short term the structure supports a wave 2 bounce.