Stock Market No New High?

By: Anthony_Cherniawski

This Wave [B] at the 2111.05 high appears to be a 3-3-3 wave affair. It would be more acceptable to have a Wave 5 at today’s high and maybe it may happen tomorrow, changing the Wave [B] to a 3-3-5 wave pattern, which is more familiar to most analysts. However, the pattern works, as is.

Should today’s high remain as labeled, it would be an end to a long, speculative affair. As Frost and Prechter write in Elliott Wave Principle, (page 79) “B waves are phonies. They are sucker plays, bull traps, speculator’s paradise, orgies of odd-lotter mentality or expressions of dumb institutional complacency (or both).” Think…central banks, pensions, stock buybacks and hedge funds.

There is a good probability of a gap down in the morning, if this analysis is correct.

The April 20 high at 2111.05 occurred on the second day from its Pi date. Today’s high is three days from its Pi date. The next Pi date occurs on July 3. This give us 52 market days of decline from the April 20 high, should it hold. It also gives us 22 market days from today to the low. Things may get interesting.

VIX appears to have made its Master Cycle low on May 27 at 13.07. Wave (Point) 5 in the Broadening formation did not make a lower low, which may be considered quite bullish for this formation. Its minimum target is 25.00 and it may go considerably higher. A breakout of the upper trendline may tell us the formation is “locked and loaded.”

Regards,

Tony

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