A Special Surprise Outcome to Keep in Mind

I’m going to walk through an additional scenario here because there are many outcomes that I believe we may still face and this is the scariest, so you should know it. Just to reiterate my primary long-term view here: I now believe that the indices are closely replicating the Nasdaq’s 3-wave melt-up leading to the 2000 top. I see 3-wave corrective structures almost everywhere now. I believe the big primary (pink) B is in, but I want to talk about a scenario in which it’s not quite in. Our first attempt off a low here and we shouldn’t get too confident just yet.

Presently, I think there’s a good chance we’ve completed or are soon to complete minute (blue) 1, and we should see a pullback for 2. It would look like this:

But, just to scare you, I want to raise a possibility. That intermediate (orange) E needs to be a 3-wave move. And, as I’ve got it labeled above, it’s an A-B-C in minor (green) degree. However, we must be mindful that it is also possible that that 3-wave move was just the A of a larger 3-wave move. The big huge “triangle primary (pink) B-wave” we’re in still has a lot of room between where we had a low and where the trend line actually is (that’s the green trend line coming in below the B in the charts here). Now, you’ve heard me say: “E’s often fall short of striking their trend lines” and they do—but they don’t always. And on some occasions they even poke below them.

It’s not inconceivable that we do this:

Couple reasons I bring this up. One, Bitcoin is being a little more lethargic here than I would have liked for my bullish count (here). Now, it could still strengthen, But I sort of expected it to really push up a lot faster here initially. And so long as we only have a 3-wave move off the spiky low, it may need to make one more drop to put in that minor (green) C down there below the orange box. “C” should be a 5-wave move, and it’s possible that we’re only in the 4th wave of that.

I often look at volume profiles, but don’t often include them in my screenshots because my charts are messy enough as they are, but I want to walk through a scenario because this sort of looks like something we recently saw at the October low. And I want to walk you through that.

Let’s follow the psychology here. That big steep drop (Turkey Day Massacre) took a lot of people by surprise (lol, thank goodness not me). So, people trapped. We kept selling, finally bottomed, have rallied again in what looks like a nice impulse wave. Volume profile traders are especially confident here because we’ve recaptured the POC (if you’re not familiar with that, that’s the “point of control, the red line, the price at which the most volume traded in this timeframe). Elliotticians are excited because we have a convincing impulse wave. However, I’m not so stupid so as to have only a 3-week-long memory. Hold on, I’ve seen this movie before. Next chart.

You guys remember this. Let’s follow the psychology here. That big steep drop (The Unnamed Massacre) took a lot of people by surprise (and me; I was looking for a bounce, then that drop). So, people trapped. We kept selling, finally bottomed, rallied again in what looked like a reasonable impulse wave (see how it’s in 5-waves?). Volume profile traders were especially confident there because we recaptured the POC. Elliotticians were excited (not me, I called bullshit) because we had a somewhat convincing impulse wave. But notice that we then had another segment to the correction just ahead of us before it really, finally bottomed.

It’s like in both cases, the first recapture of the POC is a terrific bull trap after they just got finished destroying the bears. These kinds of things hurt the most number of people. And that’s what the market loves to do more than anything else.

That is why I am open to this here. Not saying it will happen—just saying that this would probably take the most number of people by surprise here.

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In sum: Apple now has a 2.7 trillion dollar market cap. Where she goes we go.

I am looking for $AAPL to sell off here. If the volatility structure it is in is a triangle (read about that here), I bet $ES does this:

If the volatility structure it is in is an ending diagonal (read about that here), I bet $ES does this: