The Big Picture "Third waves are wonders to behold. They are strong and broad, and the trend at this point is unmistakable." Those are the words that Frost and Prechter used to describe the personality of Wave 3's in their seminal, The Elliott Wave Principle: Key To Market Behavior. The takeaway from this description is that you will know a Wave 3 when you see it, and needless to say that when it comes to a big picture Wave 3 down, we haven't seen anything close to, "a wonder to behold," yet this summer. Wave 2 keeps stretching out, and up, but this too shall pass. There is absolutely no doubt as to what comes next. The only question: When does it begin? All indices shown below are in their respective Fibonacci reversal windows and can turn down at any time. To the upside, there is still room to rise to the 68.2% retracement areas of the entire Wave 1 down (top of shaded rectangles), the nearer price rises toward those levels, the closer the reversal down becomes. Wonders To Behold - Pending In the QQQ chart above I've enabled the trend model buy/sell algorithm on the 240 minute (4 hour) chart because there is no way the market turns down in a Wave 3 without first triggering a fresh Sell signal on this model. VXX & UVXY: Intermediate Term BUYS Pending As these two charts illustrate, the measure of volatility for each is reaching into areas that have coincided with major lows and often preceded tradable spikes both in the short and intermediate term. That this pattern could be setting up in advance of a Wave 3 "Wonder to Behold" meltdown is simply too perfect a backdrop not to include in this weekend's update and as with the indices, I am monitoring the mechanical trend reversal signals for added confidence that a turn-up has occurred. The potential is there for fresh long volatility signals in both the PRO (Short-term) and Premium (Intermediate Term) Services this coming week. Tesla The other Wave 3 wonder to behold on our radar is TSLA and its exponential growth in terms of, well, everything, past, present and future. TSLA is a perfect example of how Wave 3's make themselves known by being in your face. In other words, if you have to ask, it's probably not a Wave 3. The annual shareholders meeting was held on Thursday and virtually everything Elon Musk had to discuss about the company supported my target price of $3 Trillion ($3,000 per pre-split share) within the next 3-5 years. I'll do a special overview update on TSLA after "AI Day" at the end of September as none of the AI numbers are part of my aforementioned projected price per share. TSLA shareholders over the rest of this decade will be a part of stock market history, so take days like Friday, with the shares down 6.63%, with that proverbial grain of....cobalt. “Assuming we do all these things…Tesla will probably be the most valuable company in the world*” - Elon Musk at Tesla Annual Shareholders Meeting, Aug 4, 2022 *currently Apple Computer @ $2.6 Trillion. PS - Last minute additional chart SPX Potential Double Top If the market falls apart next week, this may have been the precursor. Almost missed it.
