S&P 500 ~ the most bullish week of the year (Thanksgiving)...


The most bullish week of the year (Thanksgiving) didn't disappoint bulls this year. Veteran traders know that 85% of the time the markets rally during that week but, not all traders are aware that the wave count also has to be in a position to support the rally or it doesn't happen.

Coming up will be the next most bullish week of the year (Christmas) also with an 85% track record although the size of the rallies are not as big on average as Thanksgiving.

Our last update showed how price had completed a small "triangle" that would be followed by a quick rally. The next morning the market gapped higher and rallied to a new high in an impulse five waves. Price then fell back to the area of wave-e of that "triangle" also described in the update.

We labeled that chart showing that the rally would end an "extended" fifth wave but instead only completed a smaller degree wave-[5] of wave-iii shown on today's chart.

The updated chart shows that a perfectly sub-divided five wave pattern started from the early October low that has produced every sub-wave possible. The Thanksgiving rally counts as "sub-minuet" wave-v to complete "minuet" wave-(iii).

If this is the correct wave formation then the two day decline after Thanksgiving formed wave-(iv) with the current rally as wave-(v) which will complete the rally.

It's plain to see that in the current rally there are only three waves up from last Monday's wave-(iv) low. We still need to see another new high to make this scenario work.

Any failure to make a new high with price instead falling below the area of support highlighted on the chart would raise the possibility that the rally has finished.

Our "primary" scenario is still that this rally, when complete, will finish "minute" wave-[c] to further complete wave D of the "expanded" triangle.


Gold seems to be stuck waiting for the stock market rally to finish up. As long as price stays above the blue horizontal line (top of "minor" wave 1) we'll look for a rally to highs above wave 3 on the chart to complete 5. From there we look for the price of gold to drop considerably through 2020!

Follow the Trend
and
"Trade Safe"

Comments

Post a Comment

Popular posts from this blog

S&P500 and Dow ~ the rally based on "hope" continues the bull trap...

Image
This week we watched the stock market as it continued to grind higher with only small pullbacks. The rally is being referred to as the hated rally by traders but, Wall Street has given it a new name "The Rally of Hope." While we don't have anyway of knowing when the virus will go away or when the economy will recover...we can use the charts and the Elliott Wave to show us what is likely to happen next. With each three waves up or down or five waves up or down the formation fits together like a puzzle that will eventually form one of Elliott's corrective wave patterns. This week it has become clear that the markets are tracing out "double or triple" zigzag corrective waves. This means we have eliminated nine out of the eleven possibilities. The decline that happened two days ago looks like a small wave (c). The rally from that little low was five waves shown on the chart. This means that the uptrend is still unfolding. Now, what happens next ...
Read more

S&P500 ~ the minute degree third wave rally is near complete with wave four down ready to start next week!

Image
Wave-(iv) of wave-[iii] took all of 5 hours to form and as is the norm lately was very shallow without coming close to any normal Fib targets. Although, you can see that wave-(iv) is about the same size as wave-(ii) or 94% to be exact. The patterns also alternate with wave-(ii) being a "flat" and wave-(iv) forming a "zig-zag." Price didn't waste any time moving back up to form wave-(v) to further complete "minute" wave-[iii]. Today price moved up on the open and then spent most of the day forming a small contracting "triangle." Once complete the market spiked to new highs which is referred to as "the thrust" which is always seen at the end of the "triangle" formation. The wave labels show the sub-waves-i-ii-iii-iv-and v which could be all of wave-(v). If so, wave-(v) is pretty short and hasn't reached the minimum relationship to wave-(i). However, this could be expected since wave-(iii) was the extended wave reaching a...
Read more

S&P500 ~ today's all-time-high coincided with a Fibonacci price target that turned the market down to start a short term small price correction!

Image
Last week we published charts showing our opinion of the current market structure and how the Elliott wave formation is developing. We were looking for some small degree ups and downs (4's and 5's) to complete the "minuette" wave-(iii) or "minute" wave [iii] top where we should see a small corrective move down. Since then the market has moved up in a diagonal looking pattern, although void of any over-laps, at today's high reaching the common price target where wave-(iii) is a Fib 1.618% of wave-(i). We can also see that wave-(iii) has five sub-waves i-ii-iii-iv-v. The cash market came around 10 points short of hitting the same Fib target as the futures market. This divergence could also help the correction start. Price has turned down on the day in the largest correction since wave-v of (iii) began which should indicate that the wave-(iv) correction has begun. How deep it goes is anyone's guess because of the way the market has been acting for the p...
Read more