As the World Turns
We’re at a full Elliott Wave count in the US indices, as we are in exchanges around the world. The next major move is to the downside. They may not all turn on the same day, but they should turn more or less together. Below is a selection of exchanges from countries around the world showing similar counts that suggest we’re extremely close to a major change in trend.
Above is the 9 day chart of the DAX (the Frankfurt exchange) showing the 5 wave pattern that’s near an end. Five waves up ends a trend. Look for a change of trend in the very near future. The first wave down will very likely bounce at the previous 4th wave (around 11,868) allowing for a short entry after a 62% retrace.
Above is the 9 day chart of the TSX (Toronto) showing an extraordinarily bearish ending diagonal. This exchanged is poised to implode shortly.
Above is the 9 day chart of the Nifty 50 (India) showing a similar pattern to the Toronto exchange. Ending diagonals are ending waves. This one is virtually complete with a “throw-over,” a very typical extension above the upper trendline. Ending diagonals also have dramatic turns in the opposite direction once complete.
Above is the monthly chart of the Nikkei (Tokyo) showing a five wave pattern to the upside. Note that the fifth wave also has 5 subwaves within it. This exchange is also getting very close to a change in trend.
Above is the 9 day chart of the FTSE 100 (London exchange) with a similar ending diagonal pattern
Above is the daily chart of Bitcoin showing the progress we’ve made in reaching for the sky in the past two and a half years. These are the kinds of speculative bubbles you get at the very top of a major international bubble. The euphoria at the tops of these 500 year cycles sends people into a greed frenzy, as they search for returns that have become elusive as the international indices near a top.
In analyzing this “rogue” asset, my “marker” (the pattern that gives me orientation within the larger pattern) is the two wave pattern in the middle of wave three. From there, it’s a relatively simply process to “fill in” the adjacent labelling.
Let’s look for a crash of the entire bitcoin world as the markets around the world begin to implode together. This asset is not quite done, but it’s in the fifth wave. We may see even more of a “blow-off” wave here as this final fifth wave reaches its apex.
Looking ahead, with all these indices coming down together, the momentum to the downside is going to be strong.
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The Market This Week
Here's the latest daily chart of ES (emini futures)
Above is the daily chart of ES (click to enlarge, as with any of my charts).
I have a full count on ES/SPX/NQ/NDX, etc. There are major turn dates this week and next. My preference is for a turn down early this coming week.
That doesn't necessarily mean we're going to drop on Monday, but the likelihood of an imminent drop is high. Turn dates don't provide direction, but they're strong indicators of a change in trend. I view them as secondary indicators to Elliott Wave analysis, which consists of an analysis of wave structure, wave count, and price level resistance (based upon fibonacci ratios). In this case, there is no more "up" available.
The wave structure on the 15 minute chart shows a setup for one more high, but it's the last wave in an ending diagonal and the maximum high (based upon the length of the third wave of the ending diagonal) is 2557. NQ is also at the top of a fifth wave of a larger ending diagonal with about 20 points of "play" to the upside.
With Elliott Wave, the confirmation of a change in trend is one wave down (in 5 motive waves, in this case) to a previous fourth wave level, followed by a 62% second wave retrace in three waves). A turn down there to a new low will confirm the change in trend.
Volume: Note that for some time now, volume has been expanding with selling, and drops considerably when the market heads back up. This is yet another signal of the larger, impending top. I've been predicting for quite some time here that it will drop off suddenly towards the top of the final fifth wave top. This it has indeed done.
Summary: The count is full. We're waiting for a turn down and a subsequent confirmation of a change in trend.
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