PRO-ELLIOTT-WAVER

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 ...

Follow the Trend and "Trade Safe"

Follow the Trend and "Trade Safe"

The market rally continues as price grinds away  trying to reach the targets shown on the chart with today coming close to the equality between [c] and [a]. The first chart shows how the rally is sub-dividing along with all the sub-waves down to the "micro" and "sub-micro" degrees. Choppy price action since last Thursday has caused the wave formation to get a little ambivalent. The best evidence of this can be seen by the momentum which is diverging across all time frames...indicator at bottom of chart! The wave formation appears now to be forming an a-b-c x a-b-c referred to as an Elliott "double zig-zag." The way this pattern is labeled is with a w-x-y shown on the chart. There are two other alternate ways to label the choppy action but, for now this looks to be the best. This can change especially since corrective waves are by design meant to be confusing and can take more than 11 different formations. The upper targets have almost...

The past few days the market has grabbed any little piece of news that can possibly be positive. Most traders are scratching their heads trying to figure out why the market is going up. This is what happens during a bear market relief rally. However, we've been prepared for and anticipated the rally since the low three weeks ago all based on the Elliott formation. The markets are in the process of anticipating that the Corona virus will peak out and factoring this into the price. This is good because the market is always ahead of the fundamental events that take place. In our opinion better news taking place now with the virus has allowed the wave 2 correction. But, it is also our opinion that there isn't anyway that the markets can be factoring in the recession that will take place in the months ahead with this rally. When markets finish the relief rally price will reverse hard to the downside to factor in the economic disaster that the lock down of the country wil...

Following up after yesterday's video...this morning we saw a gap open higher as an "exhaustion gap" which normally takes place in a fifth wave. In this case it was wave-v of (III). Price tagged the internal trend-line (blue) with a 900 point gain and then reversed for the rest of the day to close negative. The decline is three waves down and when looking at a 10 minute chart you can see a clear 5-3-5 pattern as an a-b-c correction. The low going into the close tagged the Fibonacci 38.2% retrace of wave (III) that we have labeled as wave (iv). It's important that this decline holds the previous wave-iv of (III) at 2612.00 if this is going to be wave (iv). The chart is labeled showing the alternate count as (a) (b) (c) which would mean today was the end of wave [c] of 2 and that the next big decline is starting. This is an alternate we're watching just in case! Tomorrow should be an important day in respect to the wave formation!!! Follow the Trend...

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Pro-Elliott-Waver YouTube Video Subscribe Todays update includes a video explaining the short term market moves. There will be more videos including short, medium and long term charts coming. Most but not all of the videos will be for members only that have subscribed so be sure to click the link above and subscribe. Each video will also have an icon in the lower right corner near the end of the video that you can click on to subscribe and also the sidebar of the blog.  If you have a problem subscribing send an email to harlan@proelliottwaver.com so we can get it working.  If our primary wave count scenario continues to form the markets will be extremely exciting, for traders, and will also be very scary...stay tuned! Follow the Trend and "Trade Safe"

It is hard to believe that this market wants to rally, so bad! Even though today was a big down day caused by the near doomsday news on the coronavirus....it is just a pause before the market tries to rally again......This is the true definition of a "bear market rally." Since the end of the first five wave decline over a week ago the market has been in a relief rally. The decline completed wave 1 and the corrective rally underway now, when finished, will complete wave 2. Wave 2 will form three waves that we are showing as [a]-[b]-[c]. Yesterday's high reached the Fibonacci 38.2% retrace of the entire decline and also touched the upper trend-line. The high on Monday completed wave [a] with today's decline as part of wave [b] which when complete should start another rally leg for wave [c] of 2. Notice how the wave structure of the market matches right with the fundamental news events. Price had finished it's first [a] wave rally and just needed a...

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After Monday morning's gap down open the market went sideways and then fell to a slight new low on Wednesday. The best way to count this price action is that it was all part of wave (iv) of [III]. We've labeled the formation as w-x-y with wave-y forming a "running triangle."  The push to a new low as wave (v) of [III] brought the S&P price right to the area where [III] is 1.618 x [i]. Yesterday and today the market could only muster a small bounce to the center channel line before turning down into the close to make a new low for the week. The chart above is labeled showing the small rally could be wave (a) of [iv]. The new low today would be an irregular wave (b) of [iv] and we would see a bigger rally next week as (c) to complete the wave [iv] correction. Much lower prices on Monday and we would have to conclude that wave [iv] is going to be very small and is complete at today's high. Wave [v] down would already be underway with targets ...

The last time we posted a short term chart the market had just finished the first wave down...."minute" wave [i]. Since then price had a three wave retracement for wave [ii] and then fell apart in wave [iii] down Wave [iii] set multiple historic records that would be expected but, we have to remember that this is just the first small degree waves from the all-time-highs that will eventually be part of the sub-waves of much larger degree waves down as the "Bear Market" evolves over time. The 60 minute Dow chart shows that yesterday's low has all of the sub-waves for a complete five waves for wave [iii]. Since this morning's action saw a new low in the Dow but not in the S&P we have labeled it as an (a) and (b) to start the wave [iv] corrective rally with wave (c) currently underway now. Wave [iv] could see price retrace back to the previous smaller degree wave (iv) of [iii] which is the most common target area. Also the Fibonacci scale on the ...

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Gold had a nice decline from the recent 1691.00 high but, as this chart shows it is clearly three waves labeled (a)-(b)-(c). This means that it's likely the three waves was wave [iv] of 5. The move up off the low has rallied back to test the high in what appears to be five waves on the 15 minute charts. Price should continue to a new high unless wave [v] has already completed which would mean a truncated fifth wave. Since truncated fifths are very rare we'll look for a new high before the end of the rally! Notice on the long term chart how well the five wave rally for wave (C) has stayed in the (blue) channel lines. Breaking below the lower channel line (on a closing basis) will signal the end of the rally that will lead to a quick move down to the previous wave 4 low of 1459.00 This will be the beginning of a larger five wave decline to unfold as wave [C] well below the wave [A] low made in December 2015. Follow the Trend and "Trade Safe"

Looking back 124 years to the beginning of the Dow Jones Industrials we can see that stock prices have traced out five waves and three waves at all degrees to where we are today. In 1929 the first wave completed from 1896 as "super cycle" wave (i) (blue). The 3 year decline from that high during the great depression formed "super cycle" wave (ii) (blue). From the 1932 low the market has been tracing out five "cycle" waves (pink) to form "super cycle" wave (iii) (blue) to where we are currently at the February 2020 highs. The "cycle" wave V (pink) started from the 1974 low after having completed an "expanding triangle" "cycle" wave IV (pink). The "cycle" wave is being sub-divided by five"primary" waves (black) as [1]-[2]-[3]-[4] and [5]. The "primary" wave [3] topped in 2000 and started an 8 year correction for "primary" wave [4] that was sub-divided at the "int...

On Friday we posted an update making a good case for a short term bearish scenario that would be followed by another rally to all-time-highs one more time. Today we are going to give traders the alternate scenario which is much more bearish than just short term. After 39 years of operating in the world of futures and options trading (with 35 years of that time spent studying the Elliott Wave) I learn one important lesson very early, which was, no matter how good the technicals and wave formations point to an indisputable conclusion for price movement going forward...there is always an alternate scenario that can happen instead. Once a trader identifies the correct wave count that the market is working in it then becomes rather easy to follow using all the rules and guidelines. These same Elliott rules will also alert you better than any other system known when you are wrong. Because of this we usually spend 90% of our time watching, looking for and calculating the alternate sce...

Early last year we were giving traders a lot of reasons to consider that the markets were still in a large correction that started from the January 2018 highs. In March last year our charts were labeled to show how a large "expanding triangle" pattern could be the wave formation that the market was working on. During the Thanksgiving and Christmas Holiday's we pointed out that markets rallied 85% of the time the week prior to each of those holiday's. With favorable economic conditions and the euphoria of the holiday's last year we saw big rallies in the stock market. The market was able to rally far enough for some of the technical indicators to shift and support a continuation of the rally. This would have meant that the December 2018 low was the end of the big correction and that the next impulse wave much higher was underway. However, for an impulse rally to be underway the market should have started a five wave pattern from the October 2019 low that c...

In the last update we were looking for gold futures to rally to a new high to complete five sub-waves of wave 5. This move would also complete (C) of the larger "primary" degree wave [B]. Today we got the push higher to prices that we have not seen in seven years. This chart of the April futures contract shows that wave 5 will equal wave 1 of the same degree at the 1630.00 area which is a good target. Today's high came close at 1626.00! We could see a smaller degree fourth and fifth up/down move to make the final high. The wave pattern down from the all time high in 2011, as five waves, to the low in 2015 is clear. The three wave corrective rally from that low over the past five years is now also clear. This means that the price of gold is ready to start the next large wave down which should be in the form of five waves. This move will take the price below 1000.00 with a perfect target being near 750.00. Once this move down completes, probably over the next...

Late Friday we saw a drop to a new low for the move down from the high that hit 3212.75. This was the first target as this was the 4th wave low of the lessor degree which is the common target after the termination of a five wave rally....indicated by the horizontal dashed blue line. The chart is labeled showing that Friday's low also completed a five wave pattern down from the high that came close to the 27.2% retracement of the previous wave [iii]...also a common wave four target. Since the decline formed five waves and since a correction can't be made up of a single five wave move we have labeled it as wave (a) of wave [iv]. We can now do a process of eliminations and assume that wave [iv] will eventually turn into a 5-3-5 "zig-zag" formation. Today's rally should be part of a retracement of the decline that is labeled as wave (b) that when complete will lead to another 5 wave decline as wave (c) of [iv]. This drop will most likely break below Frida...