ES Morning Update November 16th 2020

Futures up this morning as it makes a run for the all time high. I’m unsure about the wave count here? This could be the final medium wave 5 up in play now, or it could still be part of medium wave 4 down. If medium 4 down then the pop and drop last Monday put in the small A wave down of medium 4 and today’s rally is the small B wave up of medium 4 down.

This would suggest a lower high happens today and that we rollover for a small C down starting right afterwards. So far (if this wave count is correct?) we have medium 1 up from the 9/24 low to the 10/12 high lasting 18 days, and medium 2 down from 10/12 to 10/30 also lasting 18 days.

Then medium 3 up from 10/30 to 11/9 last only 10 days, which is odd for sure and suggests I’m wrong on the wave count as wave 3′s are usually equal too or longer in both time and points then wave 1′s are. But we’ll stick with it for now as I’ve noticed over the many recent years a lot of wave 1′s are longer then 3′s are. Not sure why but then again I’m not an expert at Elliottwave.

Anyway, the point to all of this is that medium wave 4 down is no where near as long in time when compared to the other waves. This is why I think it’s going to breakdown into an ABC pattern to extend the time into later this week. My hunch is that we’ll have a small C wave down start today or tomorrow and carry into Wednesday or Thursday of this week. Then Friday the do the usually choppy nothing day to “pin” the SPY at max pain for option holders. I’ve said many times that the third week of every month (called the monthly options expiration) is bullish probably some 80% of the time.

The market makers love to drive the market down into the Thursday/Friday of the second week to sell naked calls on the VIX and then run the market up the follow week to make them all expire worthless as the VIX would of course go lower. But last week the market was up into Thursday/Friday when compared to the first week of this month where the market was going down in front of the election.

So I suspect this is going to be one of those weeks that isn’t a bullish one. I’m not looking for it to fall off a cliff just yet but to be down on a weekly candle, similar to last week was. The insiders are selling all of these moves up and the retail sheep are buying. This will all end badly for the sheep soon but I don’t think we are there yet. Today I think we hold this opening rally all day long and then pullback tomorrow for the start of that small C down.

A move down to 3500 sometime this week seems more likely to me then another breakout over the current all time high. After that, who knows? Maybe the wave count is wrong and there is no medium wave 5 up? I’ll just have to cross that bridge when we get there. But I have a sneaky feeling the tricksters have another squeeze planned before this market collapses. Like up to 3675-3700 on the SPX, and maybe the fourth week of this month before Thanksgiving?

That would fool a lot of people that know the fourth week of each month is usually bearish… which it could be later in that week after another blow off top early first? That’s the week starting the 23rd with Thanksgiving on Thursday the 26th. We’ve all been around long enough to remember how many times they trick you with a surprise news event to “turn” the market big during a holiday period.

Don’t be surprised if this is when Trump wins this election and the Flash Crash happens right afterwards. I’m not forecasting that to happen or even predicting it. I’m just pointing it out for you to keep your eyes open for something tricky to happen. Have a Blessed Day.