To give you guys an idea of why I am so supremely concerned here, I want to examine India’s Nifty 50 index because its structure here provides an excellent example of what I think is a very stealthy top. Elliotticians look for 5-wave advances and 3-wave retracements to help them to confirm direction. And even non-Elliotticians do this instinctively because the market’s fractals condition us to. Everyone, wavers or not, knows what an impulse wave feels like and what a correction feels like. It’s the reluctance and acceptance of these two basic motions that trains our collective psychologies through the experience of being in the market.
Now do you think the market is going to top so beautifully, clear its throat for us and ring a bell so that we can all get positioned just right? Of course not. It’s going to sneak up on us.
Looking at the $NIFTY, what do we see off the October high? 3 down, 5 up, clear as fucking day. And so every Elliottician (except retards like me) is going to accept that basic assessment and insist the trend is up.
But I think this may be a grand illusion.
We like to make fun of Elliotticians because they can always count a pattern however they see fit, and I’m going show you just how that is done. Watch what we can do with this index to give us the completely opposite interpretation. We’ve ended with 5-waves? That should be an impulse, but we’re Bear? No problem! lol Let’s make it a flat! 🙂 (Flats are always 3-3-5 structures.)
Now, the question is, when on Earth should we do this? Well, like I’ve said, I don’t pick a count and marry it. I try to assemble as much data as I can from as many sources as I can. What are currencies doing? What are bonds doing? How do leading stocks look? Oil? Sentiment, as best as I can determine from my perch? And if the whole nexus of that leans one way or another, I then try to fit the best count for that leaning.
So, in this case, I think the second count has a dangerous amount of promise to it, and no one’s going to easily see it because prima facie it looks so convincing as 3 down, 5 up.
It’s not going to ring a bell for us.
As goes this market, so goes others. We came within 3 points of all-time highs on $ES today. Convincing, yeah? Very.
Too convincing. Dangerously so.
It’s rung no bell for us.
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