NEoWave Blog
10/25/2018 - NEoWave Staff

NEoWave stock market update

The following notification was released by NEoWave's Glenn Neely on the evening of October 24, 2018. This notice is important for NEoWave Forecasting service and Trading service subscribers as well as all Elliott Wave afficianados. Note that, at the conclusion of his notice, Mr. Neely predicts that "2019 will be an EPIC year for the U.S. stock market and the world." 

A month of almost continuous stock market decline has many NEoWave Forecasting and Trading customers asking how this impacts short- and long-term NEoWave structure. Surprisingly, despite the size of October’s sell-off, Wave labels have not changed; even so, recent action does allow for a bifurcated outlook.

Wave-d is a down-trending wave that, according to NEoWave TIME rules, must take 2-3 more weeks. Consequently, it can either consolidate for 2-3 weeks (until it runs out of time) OR push lower over the next 2-3 weeks. Below, I'll address each possibility in order.

Scenario #1 - EXPANDING TRIANGLE
If an expanding Triangle is forming since early May, wave-d has done most of the price damage it is allowed. Therefore, under this count, wave-d would have to drift sideways-or-up for 2-3 weeks before concluding wave-d at a higher low in November (see red-dashed line on the EXPANDING chart). Once wave-d is over, the S&P's final “mania” phase would begin, pushing it above 3,000 (the Dow is likely to exceed 30,000). After tremendous public excitement and historic all-time new highs, a powerful, protracted, 2-4 year bear market should begin in 2019.

Scenario #2 - NEUTRAL TRIANGLE
If a NEoWave neutral Triangle is forming instead, wave-d will push to new lows later this week and/or next. Even so, wave-d MUST hold above the bottom of the green box to maintain this count. Around early to mid November, a final rally will begin that retraces most of October’s decline but fails to make an all-time new high. From that lower high, a powerful, protracted 2-4 year bear market will begin (under this scenario, the bear market could start before the end of 2018)!

BOTTOM LINE: Wave labeling is the same for both scenarios but one (the expanding Triangle) allows for a final "mania" phase to all-time new highs into early 2019. The other (a NEoWave neutral Triangle) is less bullish. Both scenarios eventually produce a major upside pattern conclusion later this year or early next. In the end, no matter which scenario endures, 2019 will be an EPIC YEAR for the U.S. stock market and the world.