S&P 500 Elliott Wave Technical Analysis – 30th June, 2015

The wave count expected downwards movement.

Although a slight new low was made, the day completed a green candlestick.

Summary: We should always assume the trend remains the same until proven otherwise. I have a new wave count. The new wave count expects the ending diagonal structure is incomplete and the fourth wave is unfolding. A short term target for a little more downwards movement tomorrow for both wave counts is at 2,039 – 2,037.

To see a weekly chart and how to draw trend lines go here.

Changes to last analysis are italicised.

Bull Wave Count

S&P 500 daily 2015
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The ending contracting diagonal may still be incomplete. Downwards movement this week may have been minute wave iv completing as a zigzag. The structure on the hourly chart for minuette wave (c) is incomplete. A little more downwards movement should unfold this week.

The diagonal is contracting. Minute wave iii is shorter than minute wave i. Minute wave iv may not be longer than equality in length with minute wave ii at 2,022.07.

At 2,037, minuettte wave (c) would reach 2.618 the length of minuette wave (a).

The bull market trend line still has not been breached by a close of 3% or more of market value since its inception in November 2011, but it is no longer exactly where price is finding support, and the strength of that line appears to be waning. If the trend line was breached at 2,188.86 (thereabouts) then a close of 3% would be needed at 2,055. It may be that price may close at or below 2,055 this week and we may yet see new highs.

I have a preference for this bull wave count because we should always assume the trend remains the same until proven otherwise. While there is no confirmation of a bear market, I will assume the S&P remains in a bull market.

S&P 500 hourly 2015
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Minute wave iv would be an incomplete zigzag.

At 2,037 minuette wave (c) would reach 2.618 the length of minuette wave (a). At 2,039 subminuette wave v would reach 2.618 the length of subminuette wave i. This gives a 2 point target zone for downwards movement to end this week, maybe tomorrow.

Micro wave 4 may not move into micro wave 1 price territory above 2,095.38.

Alternate Bull Wave Count

S&P 500 daily 2015
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It is possible that the S&P has seen a primary degree (or for the bear count below a Super Cycle degree) trend change.

This wave count absolutely requires confirmation at the daily chart level before any confidence may be had in a primary (or Super Cycle) degree trend change. Confirmation would come with:

1. A new low below 2,022.07 to invalidate the new main wave count.

2. A clear five down on the hourly chart.

3. A close of 3% or more of market value below the lower aqua blue trend line. If the line is now breached at 2,118, then a close at 2,055 or below is required to confirm a bear market.

4. A clear five down on the daily chart.

5. A new low below 1,820.66.

As each condition is met the probability of a substantial trend change would increase.

Primary wave 4 would most likely be a time consuming flat, triangle or combination in order to exhibit structural alternation with the zigzag of primary wave 2. Primary wave 2 lasted 12 weeks. Primary wave 4 is likely to be longer in duration because combinations and triangles particularly are more time consuming than zigzags which tend to be quick corrections. Primary wave 4 may be expected to last more than 12 weeks, and may end with a total Fibonacci 13 or more likely 21 weeks.

For this more bearish wave count to be taken seriously it requires at least a clear five down on the hourly chart.

At this stage, a trend change is looking somewhat likely so I’ll list points in its favour. However, these points indicate a trend change to come and not exactly when it will happen and so they support both the main and this alternate bull wave count:

1. ADX is above 15 and rising, and the -DX line is above the +DX line indicating a new downwards trend.

2. The long held bull market trend line, the strongest piece of technical analysis on ALL charts, has been breached.

3. There is quadruple negative divergence between price and MACD on the weekly chart.

4. There is double negative divergence between price and MACD on the daily chart.

5. There is persistent and strong negative divergence between price and RSI on the monthly chart. The last time this happened was October 2007 and we all know what happened after that…

6. A long held bull trend line on On Balance Volume going back to October 2014 has been breached and is no longer providing support.

7. Nasdaq is making new all time highs. Only DJT now is required to make a new all time high to confirm continuation of a bull market. Failure of DJT to confirm the bull market does not mean a bear market exists and just indicates caution.

Bear Wave Count

S&P 500 daily bear 2015
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The subdivisions within cycle waves a-b-c are seen in absolutely exactly the same way as primary waves 1-2-3 for the bull wave count.

In line with recent Grand Super Cycle wave analysis, I have moved the degree of labelling for the bear wave count all up one degree. It is possible that the recent high was the end of a Super Cycle wave (b) or (x) and that Grand Super Cycle wave II is unfolding as an expanded flat, double flat or a double combination.

This bear wave count expects a Super Cycle wave (c) to unfold downwards for a few years, and if it is a C wave it may be devastating. It may end well below 666.79.

However, if this wave down is a Super Cycle wave (y), then it may be a time consuming repeat of the last big flat correction with two market crashes within it, equivalent to the DotCom crash and the recent Global Financial Crisis, and it may take another 8-9 years to unfold sideways.

At Super Cycle degree, wave (b) is over the maximum common length of 138% the length of cycle wave a, at 170% the length of cycle wave a. At 2,393 Super Cycle wave (b) would be twice the length of Super Cycle wave (a) and at that point this bear wave count should be discarded.

Technical Analysis

S&P 500 daily 2015
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ADX is now above 15 and rising. This again may indicate the start of a new downwards trend.

On Balance Volume came down to find support at the green trend line. A small bounce up from there should happen on Tuesday’s data. This trend line may continue to provide support. A breach of that trend line by OBV would favour the bullish alternate wave count.

This fall in price is supported by volume; the four down days saw overall increasing volume and OBV moved lower. This supports the alternate bull wave count slightly.

This analysis is published about 09:06 p.m. EST.

Nasdaq Composite Elliott Wave Analysis – 28th June, 2015

(Mostly) charts only today.

Bull Wave Count

Nasdaq Composite monthly 2015
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Nasdaq Composite weekly 2015
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Nasdaq Composite daily 2015
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Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 4,116.60. However, if the bull trend line (aqua blue) is breached by a close of 3% or more of market value, then this wave count should be discarded.

Daily Bull Alternate

Nasdaq Composite daily 2015
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By simply moving the last impulse up one degree, it is possible that Nasdaq has just seen a cycle degree trend change. This idea requires confirmation with a close 3% or more of market value below the bull market trend line.

Bear Wave Count

Nasdaq Composite monthly 2015
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The bear wave count just moves everything from the all time high at 5,132.52 all down one degree. Super cycle wave (II) may be an incomplete flat or combination.

Nasdaq Composite weekly 2015
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Nasdaq Composite daily 2015
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Technical Analysis

Nasdaq Composite daily 2015
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ADX is below 20 and flat indicating low volatility, very short swings, and no clear trend.

An upwards trend is still favoured while price is above the 34 day EMA and particularly above the bull trend line. A parallel copy of the bull trend line is created to show where price is currently finding support.

S&P 500 Elliott Wave Technical Analysis – 24th June, 2015 – Grand Supercycle

Second S&P 500 Grand SuperCycle Elliott wave analysis, from 1871.

Summary: This is my second attempt at a long term analysis for the S&P500; the two wave counts presented here are an improvement from the first attempt. The bull wave count ignores the 1840’s depression and for this reason the bear count which includes it may have a higher probability.

Bullish Wave Count

S&P 500 historic 2015
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The data prior to the inception of the S&P500 index is an amalgamation of the US stock market back to that date.

There are two approaches to the S&P500 long term analysis: either look only at data since the inception of the S&P500 in 1957, or to include an amalgamation of the entire US stock market before that date as part of the analysis. I have chosen to look at the entire market.

The data I have only goes back to 1871. This bull wave count assumes up to the market peak of 1929 a five wave impulse can be counted. This may have been a Super Cycle wave (I), and the Great Depression a Super Cycle wave (II) correction. If this assumption is wrong, then the bull wave count would not work.

If Super Cycle wave (III) began at the end of the Great Depression in 1933, then it may have ended recently in 2000. Super Cycle wave (III) would have lasted 67 years and moved price 1,523 points.

Within Super Cycle wave (III), there are no adequate Fibonacci ratios between cycle waves I, III and V. Cycle wave II is a deep 0.82 zigzag lasting 5 years, and cycle wave IV is a shallow 0.25 expanded flat lasting 9 years. There is perfect alternation between cycle waves II and IV.

Super Cycle wave (II) lasted only four years (a relatively deep quick zigzag). Super Cycle wave (IV) may be over as a more shallow flat correction, lasting 8.5 years. There is perfect alternation between Super Cycle waves (II) and (IV).

This wave count expects that Super Cycle wave (V) is underway to finally end Grand Super Cycle wave I.

It may be that a cycle degree third wave is about to complete, rather than a primary degree third wave, so the degree of labelling for the daily bull wave count may need to be moved up one degree.

Bear Wave Count

S&P 500 historic bear 2015
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This bear wave count expects that the Depression of the 1840’s was a Super Cycle wave (II) and the Great Depression of the 1930’s was its counterpart Super Cycle wave (IV). From an historic perspective both depressions were significant, so this idea makes more sense.

The rise since the end of the Great Depression in 1933 would be a Super Cycle wave (V). Which means that a Grand Super Cycle wave I may have ended in 2000.

Within Super Cycle wave (V), the subdivisions are seen in the same way as for the bull wave count. There are no adequate Fibonacci ratios at cycle degree, but there is perfect alternation between cycle waves II and IV.

If Grand Super Cycle wave II began there, then it would most likely be incomplete. Grand Super Cycle waves should last generations, not just 8.5 years. The first flat correction would most likely be Super Cycle wave (A) of an expanded flat. But it may also be Super Cycle wave (W) of a double flat or combination.

This analysis means that the degree of labelling for the bear wave count at the daily chart level should also be moved up one degree.

This analysis is published about 04:50 a.m. EST.

S&P 500 Elliott Wave Technical Analysis – 23rd June, 2015 – Grand Supercycle

S&P 500 Grand SuperCycle Elliott wave analysis, from 1871.

Summary: The bear wave count has a better overall look.

Bullish Wave Count

S&P 500 historic 2015
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The data prior to the inception of the S&P500 index is an amalgamation of the US stock market back to that date.

There are two approaches to the S&P500 long term analysis: either look only at data since the inception of the S&P500 in 1957, or to include an amalgamation of the entire US stock market before that date as part of the analysis. I have chosen to look at the entire market.

The bull count looks more forced than the bear.

I have a Grand Super Cycle wave ending at the market peak of 24.86 in 1929. This is the same for both wave counts in this analysis. This assumes lower lows for the start of Grand Super Cycle wave I which are not on this chart. The length of Super Cycle wave (I) cannot be known so the ratios within Grand Super Cycle I cannot be calculated.

The Great Depression is seen for both bull and bear counts as a Grand Super Cycle wave II correction.

Thereafter, the wave counts look at the following upwards movement differently.

The bull count sees Grand Super Cycle wave III as incomplete.

Within Grand Super Cycle wave III, Super Cycle waves (I) and (II) are complete and Super Cycle wave (III) is within its fifth wave.

Grand Super Cycle wave III begins at 7.09 in 1933. Super Cycle wave (I) ends at 17.59 in 1937, and Super Cycle wave (II) ends and Super Cycle wave (III) begins at 8.93 in 1942.

Within Super Cycle wave (III), cycle wave I ends at 18.02 in 1946, and was 9.09 in length. Cycle wave II was a quick shallow 0.35 zigzag.

Cycle wave III ends at 1,530.09 in 2000, and was 1,515.26 in length.

Cycle wave IV ends at 666.79 in March 2009, a 0.57 correction of cycle wave III, and subdivides as a flat providing perfect alternation with cycle wave II.

Cycle wave V is subdividing as a simple impulse. Within it, primary wave 3 is nearing its end and primary wave 4 has not yet unfolded.

The biggest problem I can see with this wave count is that it must see the huge correction which unfolded during the 1970’s as a primary degree correction within cycle wave III.

Bear Wave Count

S&P 500 historic bear 2015
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The bear wave count is identical to the bull wave count up to the start of Grand Super Cycle wave III.

Within Super Cycle wave (I) of Grand Super Cycle wave III, cycle wave I ends at 17.59 in 1937, and was 10.50 in length. Cycle wave II is a 0.49 correction subdividing as a zigzag. Cycle wave III begins at 8.93 in 1942, ends at 93.32 in 1966, and was 84.39 in length. There is no Fibonacci ratio between cycle waves I and III.

Cycle wave IV looks like a flat correction which was a 0.24 depth of cycle wave III. There is perfect alternation between the deeper zigzag of cycle wave II and the shallow flat of cycle wave IV.

Cycle wave V ends at 1,530.01 in September 2000. For the bear wave count this ends Super Cycle wave (I) and so currently Super Cycle wave (II) would be unfolding as either a flat, double flat or combination.

Super Cycle wave (I) is 1,522.92 in length. A possible target for Super Cycle wave (II) to end would be the 0.618 Fibonacci ratio at 581.76.

This analysis is published about 05:24 a.m. EST.