Elliott Wave: February 2020 - Has the Market peaked already?
This month's chart continues the path of Wave 5 as outlined in earlier monthly charts and repeated here. January's post shows expectations for the year and anticipated bumps along the way. We have now hit one of the 3-5% bumps mentioned in that post.
Current wave 3 of lower degree within wave 5 is experiencing one of those minor declines itself. It is simply a retreat to SMA50 and could even undercut that level, but if it does expectation is not by much. We are at healthy support levels for the next move upward following this decline within wave 3 of lower degree.
Fibonacci levels using larger degree wave 4 retracement (Dec 2018) project much higher levels as shown for wave 5's termination. Potential remains for 3800-3900 before it ends. Eventual termination of the current lower degree wave 3 will precede a repeat of the current process, but with expectation of a larger pullback (wave 4 within 5) later in 2020 before a final move to those highs.
Anecdotal indicators are also favorable, such as % of stocks above SMA20 approaching (MMTW) < 25%. Healthy Advance/Decline measures, MACD/PPO signal above the 0 line for major indices and analysis of self-similar patterns all provide further confidence.
The short answer to the headline question is no. I expect indices to resume their climb after this short term pullback. Future monthly posts will reflect those circumstances.
For now sit back, enjoy the Super Bowl, and prepare for what may be a challenging early start to February. I'm expecting the Groundhog to follow this message and not see a shadow on Sunday indicating an early end to winter, and the market's recent decline.
Current wave 3 of lower degree within wave 5 is experiencing one of those minor declines itself. It is simply a retreat to SMA50 and could even undercut that level, but if it does expectation is not by much. We are at healthy support levels for the next move upward following this decline within wave 3 of lower degree.
Fibonacci levels using larger degree wave 4 retracement (Dec 2018) project much higher levels as shown for wave 5's termination. Potential remains for 3800-3900 before it ends. Eventual termination of the current lower degree wave 3 will precede a repeat of the current process, but with expectation of a larger pullback (wave 4 within 5) later in 2020 before a final move to those highs.
Anecdotal indicators are also favorable, such as % of stocks above SMA20 approaching (MMTW) < 25%. Healthy Advance/Decline measures, MACD/PPO signal above the 0 line for major indices and analysis of self-similar patterns all provide further confidence.
The short answer to the headline question is no. I expect indices to resume their climb after this short term pullback. Future monthly posts will reflect those circumstances.
For now sit back, enjoy the Super Bowl, and prepare for what may be a challenging early start to February. I'm expecting the Groundhog to follow this message and not see a shadow on Sunday indicating an early end to winter, and the market's recent decline.