Daneric's Elliott Waves

We must still assume the SPX challenges the huge open chart gap just above it. The count seems to be missing a squiggle or two.

I will say there are enough waves to consider Minor 2 over, but again, probably need to be patient a bit more.

Wave [c] would equal wave [a] in both time and price possibly Tuesday’s opening bell on the 22nd Of November. But as you can see, the entire Minor 2 wave structure can only – at least at this time, be counted on the whole as an [a]-[b]-[c] corrective wave upwards. The channeling is that of a classic 5-3-5 zigzag.

The hourly chart shows the price/time relationship if wave [c] = [a] in both. 4118 would close the open gap fully. I know this is pushing things, but I generally pushed things with the count down to a Minor 1 low back in early October and the patience proved true. A further price rise through the gap will absolutely crush any remaining bears and get retail back fully on board. Just in time of course.

Maybe we need a DOW theory non-confirmation. Keeping an eye on it. Need another wave up on the DJIA to finish [v] of C of (2).

The only blip in the primary counts is that the weekly has a significant positive RSI divergence and for it to “play out” prices would go above where we have Minor 4 marked on this chart and thus making the SPX and Wilshire counts the exact count as we have the DJIA in as shown above. This implies Intermediate wave (2) would likely back test the red trendline (again) and time-wise would probably take until mid-January, minimum, 2023 or possibly longer. We have to be prepared for this possibility.

But first things first. The S&P hasn’t even broken into its open chart gap down yet.

Again, the size of the waves are huge yes?

Here is that same chart literally zoomed in. If the weekly positive RSI divergence was to fully develop, that implies prices are going above where Minor 4 is marked just as the DJIA is close to doing breaking above its previous pivot high. And that would take some time I suppose although it sure didn’t take much time for the DOW.

Anyways, this technical aspect of weekly positive divergence has been on my mind, and this would be the likely result if it played out fully.

The entire structure is a “classis” opening move leading expanding diagonal triangle, and it is hard to ignore. The overlapping deep retraced waves along with expanding megaphone shape is a huge structure. And if it pans out to be accurate in that it is a wave (1) – or even just wave (A) of something else down, the wave (3) or wave (C) will be a spectacular downfall.

We would just have to patiently wait for it though.

What would spark this “news-wise”? What would be the market’s excuse? I suppose a temporary cease-fire deal in the Ukraine war where 2 weary armies sit things out for the winter.

In our simplified EW count of the SPX, the count allows for another small wave higher. It doesn’t have to happen there are enough waves in place. Additionally, the “time and price” factor of Minor wave 2 retrace is ideal as it is.

Back when Minor 2 was first developing, the count allowed for time and price as this chart from a month ago suggests spx60-9.png (1565×1464) (danericselliottwaves.org)

The 61.% Fib (from Intermediate wave (2) peak) and Veterans Day of the 11th give or take a few days seemed doable. And so, it has. We have double Fib resistance along with SPX 4000 resistance. It seems a “foregone” conclusion that the SPX will close that massive open chart gap down that lies just above, but sometimes if that’s what everyone expects, then the opposite happens. Or at least the pathing to get there is not a direct route.

Despite what others are saying, last week was not a “breadth event” as I like to say. In fact, last Friday’s data shows divergence and I don’t have today’s data, but it will show even more divergence tomorrow. Basically, today could have been Minor 2 high occurring on decent negative breadth day.

JUNK is lagging. Still a risk-averse market.

The DJIA is trying to mask the overall rot that exists underneath on the market as a whole. The size of the waves is huge compared to what came before. In my estimation a huge beginning set of waves to a bear market could indicate that the overall collapse will be prolonged and deep. And of course, I am predicting the end of the world as we know so yeah, there ya go.

Looking for peak hourly RSI which would suggest the peak of wave iii of (iii) of [c] of 2. Then after peak RSI, the unfolding of the subsequent waves to proper Minor 2 peak. The big open gap seems an obvious target and the 200 DMA.

As EWI likes to say, nine waves down constitute an impulse move.

These are HUGE waves since the peak and the market has been rocked. It’s as if the market is fighting itself in a futile effort.

Wilshire not even at the 38.2% Fib retrace yet.

Calling a Primary wave [1] low. Backtest of the up-channel line?

Seen via Zero Hedge:

And I agree 100%. This is about where we are…

The DJIA is on a differing wave count perhaps than the rest of the market. The entire structure since the early January peak has taken the form of an expanding diagonal triangle. The expected retrace of just such a formation should be very quick and powerful and deep. And that has appeared to be the case as the DJIA has retraced a Fibonacci 61.8% of the drop from January to mid-October in less than a month.

Yet today, despite a 3.7% rise of the DOW, a 5.54% rise of the SPX and a 7.35% rise of the NASDAQ, the NYSE up volume ratio was a somewhat unimpressive 5.4 to 1. Yes, a solid 80%+ up volume day but for a 1200-point DJIA rise, it seems a LOT of selling is going on underneath.

The disparity (so far) between the DJIA and the S&P500 (and Wilshire 5000) and particularly the Nasdaq Composite is stunning.

The count has been adjusted and simplified. Minor 2 of (3) down is counted as a 5-3-5 zigzag. Wave [c] of 2 would equal wave [a] of 2 at about 4116 SPX. That is next resistance. The open SPX gap down and the 200 DMA seems to be a target.

Real risk taking is lagging. This is JUNK bonds.

The top medium term alternate count is shown on the weekly. This is another test of the trendline as shown and a “fulfillment” of positive divergence of the weekly RSI. An amount of retrace of this much on the Wilshire and SPX almost suggests the DJIA may come close to achieving new all-time highs.

Still too early but I am throwing this out here (yet again) as something to consider.

According to my end times timeline, soon, global war.

The casino market awaits the election as if it’ll make a difference one way or another. The Uniparty both marches to the tune of the New World Order. You better believe it. Kabuki theatre for the masses.

The squiggle count needs a lower low to form Minuette (i) of Minute [i] of Minor 3 of Intermediate (3) down.

Today’s low overlaps wave [a] of 2 which confirms the rise from the recent Minor 1 of (3) low an [a]-[b]-[c] corrective wave.

Yesterday’s FED-day CPCE.

Today went about as well as I could hope considering yesterday’s post warning that Minor 2 high was probably “in”. We did not get a 1-point rate hike but all the same the market head faked higher and then sold off bearishly into the low at the close. Today is the proposed “kickoff” of Minor 3 of Intermediate wave (3) down in the markets and being wave 3 of (3), this should be the strongest down wave(s) yet to come.

The path of least resistance is still downwards. If the count is correct, we are looking for the first Minute wave [i] of 3 of (3). Ideally, Minute [i] should again take prices lower than the previous lows, perhaps even much lower than shown here.

I’ve changed my tune somewhat tonight based on the last 2 trading days (which have gone sideways). The price action looks like “distribution” from strong hands to weak. All the “fever” of media news articles to come out since Friday’s ramp predicting higher prices now seem suspect. And we have a wave count to back it all up.

First things first. What will the Fed do tomorrow? Well, the 3/6-month yield chart suggests that 3/4-point raise is in the bag. However, if the Fed wants to “shock” the market in a truly negative way, a full 1-point rate hike is not off the table. In fact, had the 3-month yield been only a few ticks higher, that would be a done deal.

I have been saying the “marching orders” for the Fed (from Satan) for the past year is to not help the markets at all. And so, the odds of a full 1-point hike tomorrow resulting in the biggest market collapse in a long time is palpable. If not, nevermind.

Do we have a “stealth” ending diagonal triangle that does not actually overlap waves one and four? Could be. Advancing in a-b-c formations. The disparity between the “generals” (DJIA) and the “troops” (Nasdaq and the rest of the market) is quite glaring.

Retarded DOW, which is why I, don’t use it for primary overall count. I hate this count but the rapid rise since the recent low has been historic. Over 50% of the entire decline since peak.

The overall primary count of wave 3 of (3) down is a powerfully negative predicted wave. We may on the verge of the “kickoff” of the greatest downdraft the markets have seen in many a decade.