Another good potential squiggle count is presented below. Basically, finishing the quarter on or near a rebound high, start April with a down move (perhaps opening gap down) and then move higher to meet the underside of the long-term upper channel line as shown on the weekly.
This count has us finishing up wave [a] of Y of (2).
Remember, the Wilshire has what appears as a misprint on stockcharts. I tried to cover it up. Basically, where wave ii of (iii) is.
Original Post:
I’ might have updates as the day goes on, if so, I’ll post here at the top of the post.
Wave (2) continues on without pause. In this over-leveraged market would we expect anything different?
The ultimate target could be a backtest of the broken long term upper channel line. At the top, prices overthrew this line for quite many months. Then it finally broke under. For the bull market to continue, prices need to get back above this channel line. It’s that simple, I guess. So here we are.
Definitely in the wave (2) target zone I described a few posts ago.
I would only add that the world is setting itself up for the return of Jesus Christ. There is no “fixing” things by man’s hands. The world is hopelessly broken. Everything is a massive fraud. A lie. Everything. Our financial markets, our medical system, our governments. They spray toxic chemicals in the sky on us constantly. They demand we inject our babies with poisons. They manipulate our food and water supplies. Our corporations are corrupt, the media is corrupt, the entertainment industry is a lie. I could go on and on. It is all set up for the return of Jesus. He will right every wrong, punish the evildoers, and reward the faithful. Oh yes, the meek shall inherit the earth you can believe that!
Zelensky is headed for hell. I am sure Putin is too. The western elite has pushed for this war, and I only suspect their ultimate goal is to get Russia to heel. To eliminate Putin and wreck Russia. Zelensky is the puppet of course. Or maybe they just want a world war. It sure seems that way. In either case, the end of times biblical prophecies predicts global war. Global war to tear down the current systems, and then the Antichrist and False Prophet comes on the scene to take it all over and “reset” in Satan’s image. Nations by then will gladly hand him power. One world government, one world currency (digital), and one world religion.
Christians better be prepared as we will have to face the Antichrist’s minions prior to Jesus’s return. I rejoice nonetheless and eagerly await the great reset. For just when Satan thinks he has won, Jesus comes back and will indeed reset this earth and not to the elite’s liking. They will feel God’s wrath.
THE COUNTS
A healthy wave (2). Approaching Fibonacci 61.8% on the Wilshire and 50% on the NASDAQ. DJIA approaching 61.8%. This is about when everyone starts squealing that the bears have no clue, yadda, yadda, yadda. I’m expecting the emails any minute. Even Cramer called the bear market over last Friday, but he is usually right for a day or 2 or maybe a week. I am still thinking about April 6th is when this wave tops if not before then.
The higher end retrace has the WIlshire backtesting the brokjen neckline at about 47,000.
Short term rates still climbing. The Fed is already a full .25 point behind the market (the Fed rate is running at about .33) and the next Fed meeting is not until 28-29 April. This is why they hinted they may have to raise rates 1/2 point at the next meeting. Of course, if things get really out of hand, they could make an emergency rate raise prior to that
Best guess squiggle count for the double zigzag pattern for wave (2). Still looking for confirmation of a wave [b] of Y. I’m looking for a dip down early next week and then rally through the end of quarter on Thursday the 31st.
If you compare the above Wilshire count (which topped 1st week of November) and the DJIA chart below, you can see why a quicker, rather than longer, resolution to wave (2) would work nicely. Obviously at the tops there was significant divergence.
But this is why I use the total market Wilshire 5000 as my base index for counting waves. We have a clear 5 waves down albeit with waves 1 and 4 overlap which is not ideal. However, considering a total market in transition the Wilshire traced a remarkable pattern. Yet even so, the DJIA is interesting also. A potential leading diagonal triangle down.
Wave (2) could very well be over. A very nice 34/21 split in time for the DJIA (and SPX). The retrace in all the indices – DJIA, SPX, Wilshire, and NASDAQ Composite has more than satisfied a typical wave (2) retrace (although the Composite is lagging a bit but to be expected it is considered leading the way lower).
Junk touched on a Fibonacci 38.2% retrace but has pulled back in price. Junk should be leading the way down so this could be a something to watch. You can say it is already diverging.
Surging yields. The Fed is already about a 1/4 point behind the market. An unannounced emergency rate hike is a possibility.
My target line is like a magic magnet. Sort of like the vaccine goo.
And finally, this chart still exists. It’s not the preferred count at the moment but we still have a lower high situation intact.
We have a potential stopping zone for wave (2) of the Wilshire 5000. It is an area of lots of convergence. 1) 200 DMA @ 46,000. 2) 61.8% Fibonacci retrace of the entire drop from peak @ 46,140. 3) Wave Y of (2) would be 1.5 x wave W of 2 @ 46,200. 4) Fibonacci sequence #24 is at 46,368. 5) Wave Y of (2) would be 1.618 wave W of (2) @ 46,577. 6) Previous peak of 4 of (1) down is in this range.
So, the target range would be 46,000 – 46,580 thereabouts with the Fib Sequence #24 right in the middle of that range @ precisely 46,368. And then the market should run out of steam. My wave (2) target topping date is April 6th after the quarter is over and the subsequent rebalancing.
Ideally wave (2) would peak on great news (as if there has been any as of late.) A “ceasefire” (which I would judge as a temporary or false ceasefire) would fit the definition. If there is a true ceasefire, sell that news hard.
I attempted a squiggly chart. There is a misprint on the Wilshire stockcharts I try and cover it up. The retrace pattern of wave (2) appears to be a double zigzag which we would label W-X-Y in place of A-B-C. This would be typical as one zigzag was not enough in price or time. Therefore, the pattern repeats and the second zigzag is behaving as a third wave would with strength. But eventually that strength dies out in wave [c] of Y.
The Wilshire 5000 still has not violated the “lower highs” view of things although it is close. Regardless, it’s probably best that one views the current price action since Feb 24th low as an Intermediate wave (2) corrective up. The positive diverging RSI has now finished higher, and the price closing high of the Wilshire is the best since February 16th. This all points to probably wave (2) and we should keep things simple. The retrace has cleared the 38.2 % Fib and closed at about 40% retrace in total so far.
Wave (1) took 75 trading days; one could expect wave (2) to take between 30 – 40 trading days to resolve itself. Today was trading day 17 since the 24th of Feb low. However, it is not the case on the DJIA or SPX because their highs occurred in early January. Therefore, ideally wave (2) would be resolved at about 30 day’s trading which would be about April 6th. And wave (2) peak would ideally occur on “good news”. Bad news marked the low, good news should mark the high of (2).
Prices are back at major horizontal resistance. If this resistance can be cleared, prices can retrace perhaps to the upper multi-year channel line (also the head and shoulders neckline) which would be quite deep. In other words, at about or just above Minor 4 of (1).
46,368 is Fibonacci sequence #24 would be ideal for a stopping point for (2) if prices can clear near term resistance.
Let’s talk price action, technicals, and other market stuff. Back on the day Russia invaded Ukraine, my market commentary was simple. I stated the following:
I was going to get very detailed in the market action analysis today. But I’ll make it simple. We have 5 waves down on both the Wilshire 5000 and Composite. Perhaps this is simply telling us this is the end of wave (1) down.
So far that morning price low of the day of invasion has held in the Wilshire 5000, DJIA, and SPX. You know what the saying goes…”sell the rumor (in this case war), buy the news (actual war)”. And so, the market has held up technically and the Wilshire has strong positive technical divergence on the RSI. Lower price closes and higher RSI strength. We may simply be in Intermediate wave (2) as was suggested back on the 24th of February.
If that is the case, I would expect – at minimum – a 50% retrace of the price drop from the early November peak.
Again, sell the rumor is the opposite of buying the news. Horrible things have happened since the 24th and the world markets are in distress. Yet, China bounced hard yesterday as did the US markets which now have a very strong 2-day run backed by numerous technical positive divergences.
All this to say is that if this is Intermediate (2), we are likely on the back-end wave C of (2). We had about 3 1/2 months from peak with diverging peaks in the SPX and DJIA so things are a bit disjointed at the Grand Supercycle top which one could expect.
The high red daily volume bars I point out in the chart below seems, at the moment, like a washout. Forced market action lower yet the intraday pivot low was not challenged. I expected a continued rise in heavy volume down pushing prices lower but that hasn’t happened – yet. Advantage: bulls.
A possible squiggle count of (2) using the hourly. Would result in about a 50% retrace perhaps a bit more muted than was suggested with the daily chart above.
Junk perhaps bottomed in its own wave (1) down. This is important because if credit tries to repair itself a bit (nothing ever goes straight down!) the overall market should do the same. But ultimately it will fail. Like the Titanic, the fatal blow has already been dealt and many just do not realize it yet.
So, what would the DJIA and SPX look like if the 24th was the wave (1) actual low? Leading diagonal triangle. It works ok on the dailys at least.
Remember, at a Grand Supercycle top, the waves are going to be in a state of transition going to the top and rolling over. Just look at the way the DJIA counts to its top. Also, a diagonal triangle.
On the DJIA chart below, it could be as simple as prices need to reach back toward the downward red trendline before resuming down in wave (3). As I said, if this is wave (2) we are likely on the tail end of things which being wave three – C – is the strongest and will get everyone excited about the market again before pulling the rug out. This is why the “news” is to be ignored in wave counting. The Ukraine War has demanded that equity prices keep going lower but so far they have not since the opening war salvo. This is the contrarian nature of markets.
But contrarian markets aside, a Ponzi scheme is just that – worth zero. Once a Ponzi scheme is identified it goes (correctly) toward zero despite 100% negative sentiment. There is no “contrarian” saving play. I propose that one day in the future the markets will practically do the same despite negative sentiment for they are mostly all a Ponzi scheme also.
The ultimate price rise would be a backtest of the upper channel line shown on the weekly. That would take prices above Minor 4 of (1) down.
Ok now that we got that count scenario out of the way, let’s look at what we currently actually have as waves. We have a series of one-twos so far and nothing more. Therefore, despite all my fancy market projections stated above, it would really be easy to just rollover and die in an earth-shattering “middle of the third” wave lower. The market is not to be trusted at this point. Roller-coaster waves of 2-3 % swings overnight into the daily sessions is exhausting. A high steady VIX could explode (capitulate) much higher. And although many think that certain markets have already capitulated, the overall US market has not. There has been nothing close to a”90%” downside across-the-board day just yet.
So, despite all the above I’m still bearish until proven otherwise. BUT, if this count is correct, it has run out of options. The market needs to go lower immediately for the bearish count to bear fruit.
A price push to the down trendline would still keep prices below pink (ii). This is still the primary count because until proven otherwise, we have not broken the rule of “lower highs” just yet. “Selling the rip”.
CONCLUSION
Good market technicals and certain wave counts in other indexes suggests we are in wave C of (2) and it has a bit further to play out. YET even so, I primarily count the Wilshire 5000 and until pink wave (ii) as shown on the above chart gets taken out along with the down trendline, the more bearish count remains as primary. I felt I need to address the other option more vocally than I have been.
It comes down to this: a price rise above pink (ii) likely means the Wilshire 5000 is in Intermediate (2). So, despite the positive technicals and what not, until and unless the series of “lower highs” is nullified, the more bearish count remains as primary.
LOL, 2 days left until the Fed’s decision on rates. If this is wave three up, they may have to hike a full 1/2 point which would catch the market by surprise.
Junk debt leading the way.
Composite another close well below bear market territory.
7 And it was given unto him to make war with the saints, and to overcome them: and power was given him over all kindreds, and tongues, and nations.
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.
Christians ultimately lose. The Antichrist and Satan wins (on earth). World war and famine is required. We may have the beginning of the end in that regard. Certainly, the Old-World order is broken forever and there is no going back.
Therefore, I welcome the worldwide coming tribulation/warfare/chaos/famine it only means that Christ’s second coming is imminent. Keep the faith. Despite what your Pastor told you (pre-tribulation rapture), it is not biblical. Christians must endure the tribulation. We do however escape God’s wrath. There is a difference. Read my blog post links to the left to understand.
Again, as I have said many times before, no world-wide tribulation, war, famine = no end times events. I don’t think this requires a nuclear weapon device to be released but it would certainly speed things along if it did happen. I don’t have any fear either way because Jesus Christ wins in the end regardless.
Based on the bible, I happen to think that nuclear devices will probably not occur in the tribulation, but it will occur in God’s wrath period. If we do have nuclear devices triggered in the tribulation, it probably will only be a few. But even only a couple will bring about terrible consequences.
The idiot politicians and pundits are playing a dangerous game with the Great Bear Russia, and they are doing it on purpose. I happen to think Satan is behind them all spurring them on. Putin is just crazy enough to do it. We are in danger of a nuclear device going off more so than we were prior to the 1980’s. The reason is we have forgotten the first-hand lessons of nuclear disaster.
This has a certain “feel” as if it were 1914 all over again. Nations behaving in a belligerent manner for no other reason than they have no experience with mass warfare and carnage and do not respect the power of negative social mood. All the skirmishes and subwars between 1945 and 2022 are but a minor nuisance compared to two or more nuclear nations squaring off in a real hot war. And the United States is pushing and poking and prodding the two others – Russia and China – into war.
We – the United States – are the great whore of Babylon. We will be destroyed by nuclear weapons just prior to the Battle of Armageddon. I won’t be here to see that; the rapture will have occurred 3 1/3 years earlier.
THE COUNTS
A so-called tremendous up day yet perhaps just a blip in the overall scheme of things.
