ES Short: Ultimate Market Top
I have to admit that this is really not the best form of Elliott Wave counts. But this is one possibility that I think is feasible and is a good risk-reward.
There are a few important points that I want to point out in this analysis (I also put two on the chart):
1. Primary Wave 1 = Sub-Wave1 of Primary Wave 5 = Sub-Wave 5 of Primary Wave 5 (I just like symmetry)
2. This week is the 34th Week since the bottom that was made in March 2020 and it is a Fibonacci Number (21+13).
3. Wave 5 is the wave that extends instead of wave 3. While this is rare, it's occurrence usually means that we are at the last stretch of a move higher than primary wave counts. Meaning, this week could be the ultimate top of the market and we could be in a bear market NOW!
Fundamentally, I have lots of people asking me about the relationship between the financial markets and the main economy. Why is the market so strong when the main economy is so bad? To answer this, let me point you to the correct data:
1. The money supply had been trending up while the velocity of money has come down (in layman's terms, it means that money given by the Fed is stuck in the financial system and DID NOT reach the main street).
2. It is known to most professionals that it takes at least 6 months for conditions in the main street to hit wall streets. Sometimes, it can take up to almost 2 years. Why? It could be because of a few things:
i) It takes time for hope to die out and reality to dawn (denial phase).
ii) Generally, people have savings.
ii) Companies do not lay off staff immediately just because a pandemic/crisis suddenly hits. There retained earnings tide things though for a period of time (think of it as company's savings). Companies, being helmed by humans, also will wait and see how things turns out before taking drastic measures that starts hurting systemically. The economy is not like dominos, it is more like Jenga.
3. An election year is usually a good year for the financial markets because statistically, it is known that a good market = reelection for incumbent. Thus it was in Republicans' interests to keep the market up (not to mention that it is in their own interest to make themselves rich). Well, at least until the election is over. Given that Trump is not re-elected, and knowing that he is at the best a Narcissist and at the worst a psychopath, we can be sure that he will be in a "I will break it rather than give it to you whole" mentality.
I can give a few more points, but the most important ones have been given. Be careful.
There are a few important points that I want to point out in this analysis (I also put two on the chart):
1. Primary Wave 1 = Sub-Wave1 of Primary Wave 5 = Sub-Wave 5 of Primary Wave 5 (I just like symmetry)
2. This week is the 34th Week since the bottom that was made in March 2020 and it is a Fibonacci Number (21+13).
3. Wave 5 is the wave that extends instead of wave 3. While this is rare, it's occurrence usually means that we are at the last stretch of a move higher than primary wave counts. Meaning, this week could be the ultimate top of the market and we could be in a bear market NOW!
Fundamentally, I have lots of people asking me about the relationship between the financial markets and the main economy. Why is the market so strong when the main economy is so bad? To answer this, let me point you to the correct data:
1. The money supply had been trending up while the velocity of money has come down (in layman's terms, it means that money given by the Fed is stuck in the financial system and DID NOT reach the main street).
2. It is known to most professionals that it takes at least 6 months for conditions in the main street to hit wall streets. Sometimes, it can take up to almost 2 years. Why? It could be because of a few things:
i) It takes time for hope to die out and reality to dawn (denial phase).
ii) Generally, people have savings.
ii) Companies do not lay off staff immediately just because a pandemic/crisis suddenly hits. There retained earnings tide things though for a period of time (think of it as company's savings). Companies, being helmed by humans, also will wait and see how things turns out before taking drastic measures that starts hurting systemically. The economy is not like dominos, it is more like Jenga.
3. An election year is usually a good year for the financial markets because statistically, it is known that a good market = reelection for incumbent. Thus it was in Republicans' interests to keep the market up (not to mention that it is in their own interest to make themselves rich). Well, at least until the election is over. Given that Trump is not re-elected, and knowing that he is at the best a Narcissist and at the worst a psychopath, we can be sure that he will be in a "I will break it rather than give it to you whole" mentality.
I can give a few more points, but the most important ones have been given. Be careful.
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