Trillions

There is a Showtime channel series called "Billions", starring Damian Lewis and Paul Giamatti, but apparently the show only deals with chump change. As we know, the latest stimulus packages from Congress and the U.S. central bank are now each sized in the trillions of dollars. Given that as the case, here is the longer term chart of the cash S&P 500 Index. We know the NASDAQ 100 and NDX have 'gone over the top'. We know the S&P500 has gone up past 78.6%, and may - even eventually - be on the way to 90% or more.

S&P500 Cash Index - Monthly - Degree Labels

We don't know for a 'fact' the S&P500 cash index will get to 90% or 'over the top', but it certainly can. So, why is this analyst is so 'flexible, calm & patient", and not so adamant as a certain very large Elliott Wave service is that a large market turn downwards is immediately underway? After all, who wants to be incorrect, right?

I maintain that the five-wave, non-overlapping, impulse count to the high in October, 2018 is, and was, completely and entirely correct. That conclusion is based on applying correctly sized degree labels to the chart above. These degrees have not changed since the inception of the chart. The degrees are shown as Primary, Intermediate and Minor from bottom left, and progressing up the chart to the SuperCycle. I will not engage in the practice of back-labeling long-standing waves as many Elliott analysts do at every turn.

What I am doing today is providing you with the labels at the top of 2018. It is my contention that the SuperCycle ended at that location. Since that time, we have had three Minor waves down to Intermediate (A) in December 2018, three Minor Waves up to Intermediate (B) in February 2020, and five Minor Waves down to Intermediate (C) in March 2020. This last wave down was counted as a diagonal, and could have been leading or ending. It still could be either, but at this time there isn't a good sign of a significant down turn.  So, IF this up wave makes 90% or more, it will be, yet again, be a flat wave. Why?

The three Intermediate waves down (A), (B), (C) likely make up a Primary wave lower. This is because of their total time duration, speed of the last drop, price extent, and economic impact. This is most probably Primary wave ((A)), lower. This degree designation makes sense with "the fastest drop ..", etc. comments heard on T.V. I have not seen anyone else provide this degree designation - although I don't follow every one on the internet. I can tell you it is independently derived - even if someone else comes up with it.

As such, from what I can tell, the entire era of easy impulse wave labeling has ended. We are now going to make a series of Primary waves designed to get the Cycle wave down considerably lower. The sequence should be Primary ((A)), Primary ((B)), Primary ((C)) to Cycle A, lower. The next easier to label impulse wave may not occur until that Primary ((C)) wave lower.

And, if we are in Primary ((B)), up, the market can go almost where it will, again. This is The Fourth Wave Conundrum at Cycle Degree now, and larger, and the conundrum happens at every degree of trend.

Many people said they wish I would concentrate on the longer term. I was not willing to do that until this point in time. The reason is simple, if prices 'go over the top again' it will confirm that the drop in stocks from 1929 to 1932 was SuperCycle [II]. And it would confirm that SuperCycle [II] was a SHARP wave, and that SuperCycle [IV] will be a FLAT or compound wave.

Yes, there is still a chance that the S&P500 because of the composition of it's stocks will not 'go over the top', and that the diagonal is leading. But, those probabilities are dropping every day, and the majority of diagonals are 'ending' anyway, which lowers the odds to begin with.

So, I remain flexible, patient and calm. I do maintain that it is only proper degree labeling that can result in fewer times Elliott Wave charts need relabeling, and only proper degree labeling that can help answer "where are we in the Elliott Wave count?" with any level of confidence.

You will note a lot of analysts are trying now to pair the 2011 decline with the 2020 decline and have both be of the same degree - calling 2011 Cycle II, and 2020 Cycle IV. The problem with that scenario is they both present as FLAT waves, so there is no alternation. Oh, and it requires relabeling past waves which got us to the orthodox Elliott Wave top in 2018 just fine.

Sunday Morning

I added to this post on Sunday morning to outline a couple of ways a Primary ((B)) wave 'could' evolve in the SPX, if and only if, prices eventually at least get to the 90% level. Remember, a Primary ((B)) wave must be composed of at least three Intermediate Waves (A), (B), (C), or (W), (X), (Y). The first of these options, with the Minor B wave "running flat" would take more time. 

SPX & ES - Ways to Evolve Primary ((B))

Have a nice rest of the weekend. I'm interested in your comments. P.S. This is the second post this weekend, and you may wish to review the first one, also.

TraderJoe