Is This A Big Fakeout?

One of the benefits of being a part of a trading room with over 3000 members, over 400 professionals, and 15 analysts is that we all are able to take advantage of the combined wisdom of all the members and analysts in the room. Since I am but one person within this room, I am clearly unable to see all potentials the market may be throwing at us. And, thanks to the collective wisdom of the room, several people have provided me with insights today which I did not have on my own. So, there is no question that we all can benefit from the collective wisdom of the room, and for that I am grateful to you all.

First, our analyst Garrett Patten private messaged me today to tell me that he is having a hard time seeing enough stocks setting up to support a rally to 2500SPX at this time. Rather, many of them still need more pullback before they can substantiate such a run. And, since this is a market of stocks, I clearly need to take that into account in my own analysis.

Second, I have noted several times that I really do not like the high that I considered the top to the (b) wave before, because the rally into that high really counted best as a 3 wave move. Since that time, I have been struggling to understand how I can reconcile that issue with the overall market action. Well, today, Bill Adlard, one of our members and a highly acclaimed analyst in his own right, presented a count on the board which gave me insight into a truly elegant solution to the issues I was having, and I have modified the count on my chart to take advantage of his insight.

If you look at my 60 minute chart, you will see that we can actually count this seemingly 5 wave rally as a (c) wave within the b-wave still. In fact, whereas the larger (b) wave of the b-wave would have taken the great majority of the time during this corrective move, the (a) wave and (c) would now be almost equal in time, as well as in size.

Based upon this modified count, I am still in the camp of seeing much further downside in the coming weeks, and this count can still support a strong c-wave down to the 2285-2330SPX region. Moreover, as I have noted before, the IWM provides more evidence that the downside has potentially not yet completed. 

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Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ( more

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Chee Hin Teh 4 years ago Member's comment

Thanks for sharing