Added:
Either way, WHOOSH!
Original Post:
I have received several requests to uncage Cashzilla.
Problem: those requests happened while the market gained momentum during it's initial dive. Yes, this is a big down wave. Huge. Definitely worthy of listening to Cashzilla's disturbing, infuriated wail. But the scale of this decent is quite enormous. Even though it will appear to be a harrowing decline looking backward from the future, living it, it will feel a little more controlled, at least most of the time.
My point is that we were due for a big-picture-insignificant, but little-picture-significant, mini-Wave 2 rally. I didn't want to unleash Cashzilla into a rally, however minor, for fear that it might piss him off.
Tonight, it looks like our first mini-A is complete. Since this is part of a BIG Wave 3 down, large retracements will be less common. So it's entirely possible that this A, since it took a 3-segment form, will suffice as the full ABC retracement and we'll resume the down draft in earnest.
Big picture, it's scary to let up the shorting; any day could be huge day to the downside. Huge moves almost always take shape in the after market, to prevent public participation. Upside moves could be equally violent, maybe more so, but short lived when viewed in perspective.
This is where everyone but those with a good understanding of market action, both long and short, will get creamed. Expect to feel your own, instinctive, deeply emotional reactions to do the wrong thing, as Mother Nature tries to wipe out everyone except her most loyal natural-selectees.
The most likely move is not the most dangerous for shorts, so personally, I'm not letting up. That is: soon, we will see a 3-segment B wave down (since this is a small part of a big macro move down, chances are good it will exceed the previous Wave 5 bottom), then a very sharp 5-segment C wave up, that finishes a bit higher than the A top (probably today's high). Then we'll resume the most devastating, though not necessarily the most spectacular, down trend of our lives.
So, on this sharp B wave "head fake" down, or a big time Wave 3 down, I'll let him out to play with the buildings.
![[$zilla.png]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9Fsw6BzwIbEIsnYmcZouOhEw-9sIXkWeyYVVbmdOLjfw4-8sP2REwSExruk9LO1QkaHuIf_rMCRNFE3Bun4ztl8un8XeuBE0RoBGUnbIQv3V_3XJl6ikRjX4mWy88sZwHiqQPypSGDg/s1600/$zilla.png)
FDR you draw me back everyday fascinated to read what you have to say next. On my behalf and I'm sure on behalf of your growing list of admirers I must say a grateful thank you.
ReplyDeleteWill it be possible to attach a chart to articles like the present one, to make it easier to visualise your argument?
Yeah, I realized while I was writing that it might be hard to follow without a pic. I'll add a quick chart later this the morning. It is an important time for risk-tolerant traders to get short and stay short through the shakeouts. Thanks.
ReplyDeleteAs they say in my country "eish..." (transalation: yow!)
ReplyDeleteHow can this not be widely known? In the Information age?
ReplyDeleteThanks for your work. Helps keep me sane to see it.
It is my understanding that the B wave low would take out the A wave low. Today seems like a B wave correction of the A wave with the C wave beginning soon to take us a bit higher to that 10500 area before the collapse
ReplyDelete"It is my understanding that the B wave low would take out the A wave low."
ReplyDeleteThere is no good guideline where B might terminate. The C, if it's not already in place, would usually terminate in the Wave 4 area.
I'm going to play golf while it works itself out. The end result is the same.
This turd is pretty big...
ReplyDeleteLooks like it will require a double flush.
FDR you said:"My point is that we were due for a big-picture-insignificant, but little-picture-significant, mini-Wave 2 rally. I didn't want to unleash Cashzilla into a rally, however minor, for fear that it might piss him off.".Now i dont really understand the nuts and bolts of elliot so could you please clarify if it means that we might have a mini rally from hereon upto 10500 dow or something and then fall of the cliff or you meant something else?
ReplyDeleteAppreciate your decryption.
"FDR you said:"My point is that we were due for a big-picture-insignificant, but little-picture-significant, mini-Wave 2 rally. I didn't want to unleash Cashzilla into a rally, however minor, for fear that it might piss him off.".Now i dont really understand the nuts and bolts of elliot so could you please clarify if it means that we might have a mini rally from hereon upto 10500 dow or something and then fall of the cliff or you meant something else? Appreciate your decryption."
ReplyDeleteHi,
When I wrote that (at the end of the charts above), I was talking about the rally that had just taken place.
At that time, EWs (if you don't understand Elliott Waves, personally I think you have no chance to make money in the stock market) forecast that we were due for a Wave 3 down (top chart), or, if the 3 segment rally that just taken place was not sufficient to be the full ABC correction, but rather just a 3-segment A wave (there was no real way to know since either option could count properly), then we'd have a B wave down followed by a C wave up (bottom chart).
As is almost ALWAYS the case with nature, she came straight down to the fractal branching point, between the two scenarios, and stopped. She loves suspense.
So, still, it could go either way. One of the neat things about EWs, and a fundamental truth of Nature, is that you can fully understand the rules but not be able to forecast the future. That's what most people don't understand about EWs, and why they reject them because they think EWs are determinative model of the Universe, and they reject that idea. That is too simplistic a view of the EW principle.
If you understand DNA, you can win bet after bet on outcomes driven by DNA, that others believe is magic. But that doesn't mean the organism will survive the day. The same is true of EW insights, you can easily lose, even if you understand one part of Nature's universe. But, if you don't understand EWs, you have no hope betting regularly against someone who does.
Looks like we are getting to the moment of truth for chart # 2.
ReplyDelete