Roger - that's one scenario. But also don't get locked into it.
A lot of folks even institutions are looking at that lower high RS
scenario, I know because I talk with some of these guys on a
consulting basis.
One thing that has been bothering Steve and myself is that at
the highs we cannot count 5 clear waves, only 3 waves. When
you look at the move off the early Dec lows to the early Jan highs,
you can only count 3 waves, that's a problem for the Elliot Wave
guys. Believe it or not this leaves open the possibility for the
market to actually make another high like a 5th wave blow
off.
if you think about what would cause max pain - a scenario like
that could. I know a lot of big institutions, I consult with one,
is looking to exit everything on a rally, a lot of others are as
well who were trapped in the decline. What would screw those guys
more than to have them exit all their longs around the 4500
area and for the market to keep going? Then market makes a new high
and sucks everyone back in near highs and it's the 5th wave blow
off completion that once that ends and traps them all, then you
have you long lasting bear market
just throwing ideas out there. Be like water Bruce Lee used to
say - like water will change to the form of any container it's in,
be flexible vs rigidly set in what you think has to happen
Posted by focus175 on 28th of Jan 2022 at 11:03 pm
I know there's a lot of ideas out there of what unfolds next,
but I'm curious for those that understand EW well as I'm still
trying to learn it, I count us in a potential 4th wave down, with
the potential of a 5th wave back to the lows or undercut. How high
would price need to go to negate this count of us being in a
potential 4th wave right now?
One thing about EW - it's best thought of as a mapping tool.
Quite subjective with several options. Best to combine
with other things like trend and technical analysis.
I also take into consideration the fundamental backdrop when
considering longer term positions - VALUATION matters to me and was
seemingly ignored by many in tech land last year.
Posted by kevindeng0727 on 28th of Jan 2022 at 11:57 pm
I think if only based on Elliot wave, it has to
overlap with wave 1 to completely be ruled out. Wave thory needs to
be used with other weight of evidance. i.e. I posted here back in
May/June 2020 about why the rally shouldn't be a wave B, because
there were some breath thrust signals that have never happened in
previous bear market rallys (like 95% S&P stocks above 50 dma).
Elliot wave alone is so flexible that one can virtually
make up any wave count he/she likes, so fruads love this theory
lol. Just my 2 cents.
I am curious about Matt's count for the new high scenario. An
ending diagonal or metaphone?
When have you seen as many black swan possibilities as now?
I can list 6 off the top of my head.
Evidence of weakness: Weekly macd crossed down neg
divergence, money flow weak, price fell below ema's
when they acted as support in the past, vortex bear
cross.
Posted by timebandit on 29th of Jan 2022 at 12:24 am
I'm not so sure, roger. The thing about Black Swans is you don't
see them in advance. They're not just outliers, they come out of
left field. In hindsight, everybody says of course it makes sense.
But before they happen, not so much.
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SPY bouncing around at the
Posted by roger on 28th of Jan 2022 at 05:07 pm
SPY bouncing around at the neckline, setting up for the right shoulder
Roger - that's one scenario.
Posted by matt on 28th of Jan 2022 at 06:05 pm
Roger - that's one scenario. But also don't get locked into it. A lot of folks even institutions are looking at that lower high RS scenario, I know because I talk with some of these guys on a consulting basis.
One thing that has been bothering Steve and myself is that at the highs we cannot count 5 clear waves, only 3 waves. When you look at the move off the early Dec lows to the early Jan highs, you can only count 3 waves, that's a problem for the Elliot Wave guys. Believe it or not this leaves open the possibility for the market to actually make another high like a 5th wave blow off.
if you think about what would cause max pain - a scenario like that could. I know a lot of big institutions, I consult with one, is looking to exit everything on a rally, a lot of others are as well who were trapped in the decline. What would screw those guys more than to have them exit all their longs around the 4500 area and for the market to keep going? Then market makes a new high and sucks everyone back in near highs and it's the 5th wave blow off completion that once that ends and traps them all, then you have you long lasting bear market
just throwing ideas out there. Be like water Bruce Lee used to say - like water will change to the form of any container it's in, be flexible vs rigidly set in what you think has to happen
The strong AAII negative sentiment
Posted by timebandit on 29th of Jan 2022 at 12:30 am
The strong AAII negative sentiment would tend to support a scenario of a blow off 5th wave, Matt. It's good to be aware of these possibilities.
I know there's a lot
Posted by focus175 on 28th of Jan 2022 at 11:03 pm
I know there's a lot of ideas out there of what unfolds next, but I'm curious for those that understand EW well as I'm still trying to learn it, I count us in a potential 4th wave down, with the potential of a 5th wave back to the lows or undercut. How high would price need to go to negate this count of us being in a potential 4th wave right now?
https://schrts.co/VWtMckAP
One thing about EW -
Posted by steve on 29th of Jan 2022 at 02:31 pm
One thing about EW - it's best thought of as a mapping tool. Quite subjective with several options. Best to combine with other things like trend and technical analysis.
I also take into consideration the fundamental backdrop when considering longer term positions - VALUATION matters to me and was seemingly ignored by many in tech land last year.
I think if only based
Posted by kevindeng0727 on 28th of Jan 2022 at 11:57 pm
I think if only based on Elliot wave, it has to overlap with wave 1 to completely be ruled out. Wave thory needs to be used with other weight of evidance. i.e. I posted here back in May/June 2020 about why the rally shouldn't be a wave B, because there were some breath thrust signals that have never happened in previous bear market rallys (like 95% S&P stocks above 50 dma). Elliot wave alone is so flexible that one can virtually make up any wave count he/she likes, so fruads love this theory lol. Just my 2 cents.
I am curious about Matt's count for the new high scenario. An ending diagonal or metaphone?
That's a very interesting option
Posted by kevindeng0727 on 28th of Jan 2022 at 10:28 pm
That's a very interesting option (new marginal high). I saw many ppl discussing the H&S option as well.
Also, on the SPY daily chart I don't think the bear flag is completely out? Maybe a lower probability for now.
Hope everyone have a great weekend..
When have you seen as
Posted by roger on 28th of Jan 2022 at 09:06 pm
When have you seen as many black swan possibilities as now? I can list 6 off the top of my head.
Evidence of weakness: Weekly macd crossed down neg divergence, money flow weak, price fell below ema's when they acted as support in the past, vortex bear cross.
I'm not so sure, roger.
Posted by timebandit on 29th of Jan 2022 at 12:24 am
I'm not so sure, roger. The thing about Black Swans is you don't see them in advance. They're not just outliers, they come out of left field. In hindsight, everybody says of course it makes sense. But before they happen, not so much.