Looking for Possible Strong 3-6 Week Move Up Starting Soon

The decline may be over or within the next few trading days. Friday's low may be the price low for the correction. This late February decline was indicated as a possibility in the last blog update although I did not foresee a severe drop. Looking for possible strong 3-6 week move up that could retrace up to 70-90% of the correction. 

Due to the severity of the decline wave 3 is no longer a valid count unless the current decline is wave C of a large flat from the April/2019 peak. The prior favored wave X count is now the best count once again for the move up from the December/2018 low to the February peak. A wave X is a middle wave between two corrective waves. The current correction wave can be a zigzag, flat or triangle so it remains to be seen which of these patterns will unfold in the upcoming months. I would say that the current move down is most likely the first part of wave A of one of those three patterns. That would indicate a new low below the current low in the next few weeks/months after the antIcipated 3-6 week rebound rally. It can't be ruled out that the current low is the end of wave A(and therefore a possible price low) for any of the above mentioned three corrective patterns. A strong move below Friday's low this coming week may negate this outlook.

The wave one count(of a possible diagonal) suggested previously as a third possibility for the December/2018 to February/2020 peak is still a valid count and would make the current correction the first segment of wave two which is usually a zigzag type corrective wave. 

S&P500 chart showing ghost feed projection(candlesticks & white line) to mid April(click to enlarge)

Wave 3 Count for Stocks Now is Best Count - A Top by End of Year?

The wave 3 count mentioned in the last post was given as a more probable count if stocks continued higher into mid January. That happened along with a decline that was also forecast into the end of January. There still could be a retest of that recent January 31st low by late this month. 

The wave count and cyclical/technical indicators show that the rising market could continue until late 2020 or early 2021 as waves 3, 4 and 5 complete.

The wave X count is still a smaller possibility. If so it would portend a decline from near current levels that could last a few months perhaps into mid-year. A third possibility is that the entire move up from the late 2018 low is a large wave 1. With that count I would be looking for the wave 1 to end within the next several weeks by late March followed by smaller waves 2, 3, 4 and 5. 

Stock Decline Looks Imminent

Many of the indicators are lining up for stocks to make at least a multi-week top sometime between now and mid-January. If so, I will label the move up from the December/2018 low as an X wave as I mentioned a couple of times before. 

There is a smaller chance that stocks are now in a wave 3 from the October/2019 low which would also be ending at any time although the decline would be not as severe with a test of the December low more likely. The wave 3 count could also be more likely then the wave X count to bring a high more toward the end of the timeframe from now to mid-January.   

Even if the wave X count is correct, I don't think there will be a huge price decline from here and would not be surprised to see higher highs later in 2020. The worst case may be a retest of the June/2019 low.

S&P500 Daily Chart (click to enlarge)

Stocks Climbing Higher

See attached chart for revised outlook. Looking for a possible high by late December.

Green arrow is the more bullish view / Red arrow is the more bearish view. It could also turn out to be a hybrid of the two. This is per my take of the technical/cyclical indicators. 

Possible Stock Market Triple Top Forming (update 10/31/19)

The S&P 500 and other indexes may be forming a triple top with the April, July and possible upcoming early September top(see chart below). That formation which is being telegraphed by typical wave pattern relationships and technical/cyclical indicators could possibly be counted as an ending diagonal which would be very bearish. This indicated 3rd swing up from the August 5th low would be about a 7 1/2% rise.

Chart of S&P 500 showing possible upcoming triple top(blue arrow)
 

Update 8/21/2019:

According to the Elliott Wave rules, if a 3rd SP500 top(wave 5) is formed in early September and it goes above the July high(yellow dashed line on attached chart), a leading diagonal OR ending diagonal could be indicated. They can also have different wave structures so that will have to be looked at also.

If a 3rd SP500 top is formed in early September and it stays below the July high, only an ending diagonal could be indicated as leading diagonal rules require that the 5th wave goes above wave 3. This scenario could also possibly be counted as an X wave at the July high.

Although ending diagonals are more common then leading diagonals, I am leaning toward the leading diagonal count which would then be followed by waves 2 through 5 of a possible 5th wave impulse over the coming one to several years.  The ending diagonal count would be very bearish as it could indicate the end of the entire move up from the 2009 low.

S&P 500 (click to enlarge)

Update 8/23/2019:

Today's weak price action reduces the chances that a diagonal is forming and It also increases the likelihood that lower prices will continue for at least several more weeks. It is still possible however but would require a 6% upmove into early September. In any case, indicators show there could be a 1-2 week rebound which may begin within the next 1-3 trading days which could allow for the leading diagonal or right shoulder of a head and shoulders top scenarios to unfold.  If the July high was the top then that would probably be labeled as the top of an X wave. 

Update 9/5/2019:

The leading diagonal wave pattern now appears to be the most likely outcome as originally described on 8/8/19. This would form a triple top with the April, July and anticipated September highs. The end of next week around Friday looks like the most likely time for that to occur. 

Update 9/16/2019:

If last weeks highs hold, none of the major indexes made a new yearly high in September. If a diagonal was formed it can only be an ending diagonal according to the rules. It could also be counted as an X wave at the July top which is what I am leaning toward. The X-wave count can also be identified as a head and shoulders top. All of these counts are bearish and the July high may hold until the end of year at the minimum.

Update 10/04/2019:
Technical and cyclical indicators are showing a possible retest of the September 
high within the next 3-5 weeks. If it goes above the September high that would 
invalidate the ending diagonal count at the September high although the X wave 
count would still be valid. See chart of S&P 500 below.

Chart of S&P 500 index with projection arrow. (click to enlarge)

Update 10/31/19:

Stocks may be on the verge of a multi-week decline as it is possible to get a completed wave count from the October low and as shown by the technical/cyclical indicators. I would not rule out another retest of the October high however. The diagonal count is also not necessarily invalidated yet by the move above the July/September highs.

S&P500 chart with arrow showing possible direction

Bitcoin Initial Coverage - Bullish (Update 10/28/19)

Bitcoin is on track for a test of the all time high around 20,000. I have a projection well beyond that but I will keep it to myself for now. 

Update 8/6/19: See chart below

Weekly bitcoin chart showing next price target(dashed line) Click to enlarge.

Update 10/28/19:

Bitcoin has most likely completed it's correction and now looks poised to test the all time highs around 20000 within the next several months(with corrections and pauses along the way). Even if the correction is not over, the price low of the correction has probably been made.