Monthly Archives: November 2013

S&P 500 Elliott Wave Technical Analysis – 27th November, 2013

Yesterday’s analysis expected price to break out of a small zone, and provide confirmation of one of the hourly wave counts. It did not do that, and price moved mostly sideways within a narrow range.

It should break out of this zone tomorrow and provide some clarity.

I am swapping the hourly wave counts over today because of the look on the daily chart.

Click on the charts below to enlarge.

S&P 500 daily 2013

This wave count has a higher probability than the alternate. Upwards movement over the last 4 1/2 years subdivides best as a zigzag. If something is “off” about the supposed recovery then it must be a B wave because there is plenty that is off in this scenario in terms of social mood.

Downwards corrections may now find support along the upper edge of the big maroon channel from the monthly chart, if the upper trend line is pushed out to encompass all of primary wave A.

Intermediate wave (5) is incomplete, with minor waves 1 and 2 and now most likely 3 completed.

At 1,864 intermediate wave (5) would reach equality in length with intermediate wave (1). This is the most common ratio between first and fifth waves so this target has a good probability. When minor wave 4 within intermediate wave (5) is complete I will add to this calculation at a second wave degree, so it may change or widen to a small zone.

Minor wave 4 may not move into minor wave 1 price territory. This wave count is invalidated with movement below 1,775.22.

I would expect minor wave 4 to find support at the upper edge of the big maroon channel copied over from the monthly chart.

S&P 500 hourly 2013

Because we have a couple of red candlesticks on the daily chart it looks most likely that minor wave 3 is over. If it were to continue from here with a final fifth wave then on the daily chart it would have a three wave look. This is unlikely.

The parallel channel about minute wave v of minor wave 3 is very clearly breached now with downwards (and sideways) movement. This is an indication that minute wave v is now over.

Minor wave 2 was a shallow 22.5% zigzag correction, and within it minute wave c was close to 1.618 the length of minute wave a.

Given the guideline of alternation I would expect minor wave 4 to be deeper than the 0.236 Fibonacci ratio, and to be any corrective structure other than a zigzag.

Minor wave 4 is most likely to be a flat correction. Within the flat minute wave a must subdivide as a three wave structure, and it may be completing as a zigzag. At 1,793 minuette wave (c) within minute wave a would reach 2.618 the length of minuette wave (a). This would see minute wave a find support at the lower edge of the channel containing minor wave 3.

There are several other structural possibilities for minor wave 4, some of which include the possibility of new highs above 1,808.42 within the next few days. At this stage on the five minute chart it looks like a zigzag or impulse is unfolding downwards, because the first wave down labeled minuette wave (a) is a sheer drop which subdivides best as an impulse on the one minute chart.

When the first three down is completed then the upper invalidation point at 1,808.42 must be removed. Minute wave b may make a new price extreme beyond the start of minute wave a at 1,808.42 if minor wave 4 is an expanded flat, regular flat, running triangle or combination.

Overall I will expect choppy, overlapping movement for about one to two weeks. As more structure within minor wave 4 unfolds I will have a clearer idea of when and where it may end. The wave count on the hourly chart will probably change over the next few days.

Minor wave 4 may not move into minor wave 1 price territory. This wave count is invalidated with movement below 1,775.22.

S&P 500 hourly alternate 2013

Alternatively, it is still possible that minor wave 3 is incomplete. For this alternate we need to see strong upwards movement tomorrow for it to make sense. It must be confirmed tomorrow with movement above 1,808.42.

At 1,826 minor wave 3 would reach 0.618 the length of minor wave 1. Minor wave 1 is extended, so minor waves 3 and 5 may not be.

At 1,821 minute wave v would reach equality in length with minute wave iii.

Within minute wave (v) subminuette wave ii may not move beyond the start of subminuette wave i. This wave count is invalidated with movement below 1,800.58.

Bullish Alternate Wave Count.

S&P 500 daily 2013

It is possible that a new cycle degree bull market began at 666.79. So far it is not yet halfway through, and I would expect it to last for a few years (at least five more years and maybe longer).

At some stage then the current upwards impulse, labeled intermediate wave (5) for the main wave count and minor wave 5 for this alternate, will be completed. At that stage both wave counts would expect a trend change. The main wave count would expect a huge cycle degree trend change, and this alternate would expect an intermediate degree trend change. If the downwards movement subdivides as a three and remains within the maroon channel then this alternate would be preferred. If it breaches the channel this alternate would be discarded.

The maroon – – – channel is an acceleration channel drawn about primary waves 1 and 2 on the monthly chart (it is drawn in exactly the same way on the main wave count, but there it is termed a corrective channel). I would not expect intermediate wave (2) to breach this channel because a lower degree (intermediate) wave should not breach an acceleration channel of a higher degree (primary) first and second wave.

The daily chart shows the structure of minor wave 5. It is incomplete. Targets are the same because they are calculated using the same wave lengths as the main wave count. This bullish alternate does not diverge from the main wave count at this stage, and it will not for some weeks (or months) to come.

S&P 500 Elliott Wave Technical Analysis – 26th November, 2013

Yesterday’s analysis expected more upwards movement from the S&P 500 for Tuesday’s session, which is how the session began. This upwards movement was followed by a deep correction so that the day ended sideways with a doji candlestick.

The wave counts remain the same.

Continue reading S&P 500 Elliott Wave Technical Analysis – 26th November, 2013

AAPL Elliott Wave Technical Analysis – 25th November, 2013

Last analysis expected upwards movement from AAPL. Price has moved slightly higher, but mostly sideways.

The fourth wave that I expected was over in last analysis looks like it is continuing further sideways as a contracting triangle. It is nearly complete.

If the triangle remains valid then there would be a high probability that this wave count is correct. At that stage I would expect a sharp upwards thrust about $27 in length.

Click on the charts below to enlarge.

AAPL Elliott Wave Chart 2013

The daily chart shows the structure of primary wave C upwards within a larger upwards correction for a cycle wave b zigzag.

Within primary wave C so far intermediate waves (1) and (2) are complete. Intermediate wave (3) is an incomplete impulse.

Within intermediate wave (3) minor wave 3 has no Fibonacci ratio to minor wave 1.

I have redrawn the channel about intermediate wave (3) again this week using Elliott’s second channeling technique. Draw the first trend line from the lows of minor waves 2 to 4, then place a parallel copy upon the high of minor wave 3. As minor wave 4 finishes redraw the channel. I will expect minor wave 5 to end midway within this channel, or about the upper edge.

Minor wave 4 is an incomplete contracting triangle. The final e wave downwards needs to complete. Minor wave 4 may not move into minor wave 1 price territory. This wave count is invalidated with movement below 496.91.

At 572 intermediate wave (3) would reach equality in length with intermediate wave (1). At 560 minor wave 5 would reach equality in length with minor wave 1. I am aware that this target zone is rather large, and so as we get closer to the end I will try to narrow it down when I can add to it at a third wave degree.

AAPL Elliott Wave Chart 2013

This hourly chart shows all of the structure of minor wave 4. For the triangle to remain valid any further upwards movement of minute wave d may not move beyond the end of minute wave b at 529.28, and the final wave down for minute wave e may not move below the end of minute wave c at 516.05.

If the triangle remains valid then the next wave upwards for minor wave 5 may travel a length about equal to the widest part of the triangle, which was $26.87.

Alternate Daily Wave Count.

AAPL Elliott Wave Chart Alternate 2013

Although the main wave count has a good overall look and fit, this alternate must be considered because the main wave count does not agree with MACD.

The strongest momentum should be within a third wave. This alternate looks at the possibility that intermediate waves (3) and (4) are over.

This alternate has a problem of proportion: intermediate wave (4) is much bigger in duration than intermediate wave (2) which gives this wave count the wrong look.

At 551 intermediate wave (5) would reach equality in length with intermediate wave (3).

Apart from a differently calculated target this alternate does not diverge with the main wave count at this stage, and the expected direction is the same.

They will diverge in the future and at that stage I will use confirmation / invalidation points to determine which wave count is correct.

S&P 500 Elliott Wave Technical Analysis – 25th November, 2013

Last analysis expected more upwards movement towards a target at 1,817, which I expected to be reached during Monday or early Tuesday.

The structure is now complete and upwards movement fell well short of the target.

The wave count remains the same.

Continue reading S&P 500 Elliott Wave Technical Analysis – 25th November, 2013

S&P 500 Elliott Wave Technical Analysis – 22nd November, 2013

Last analysis expected more upwards movement for Friday’s session with a small increase in upwards momentum towards a short term target. Price has moved higher, momentum did increase slightly, but the target was not quite met. The structure is incomplete and the targets remain the same.

Continue reading S&P 500 Elliott Wave Technical Analysis – 22nd November, 2013

S&P 500 Elliott Wave Technical Analysis – 21st November, 2013

Yesterday’s analysis expected it was highly likely that a small fourth wave correction was finally over, and that price should move higher during Thursday’s session. This is what happened.

The wave counts remain the same. The main and alternate wave counts will not diverge for weeks or months.

Continue reading S&P 500 Elliott Wave Technical Analysis – 21st November, 2013

S&P 500 Elliott Wave Technical Analysis – 20th November, 2013

Yesterday’s analysis expected that a small fourth wave correction was over and that price would move higher during Thursday’s session. This is not what happened.

Downwards movement is a continuation of the small fourth wave correction as a double zigzag. Price remained above the invalidation point and the wave count is mostly the same.

Continue reading S&P 500 Elliott Wave Technical Analysis – 20th November, 2013

S&P 500 Elliott Wave Technical Analysis – 19th November, 2013

Yesterday’s analysis expected a fourth wave correction to continue, and possibly end at the end of Tuesday’s session. This is what happened.

There were several possibilities yesterday for the structure of this fourth wave, and the most common flat correction was anticipated. This structure did not complete as a flat though, and it fits best as a zigzag.

Click on the charts below to enlarge.

Main Wave Count.

S&P 500 daily 2013

This wave count has a higher probability than the alternate. Upwards movement over the last 4 1/2 years subdivides best as a zigzag. If something is “off” about the supposed recovery then it must be a B wave because there is plenty that is off in this scenario in terms of social mood.

Downwards corrections may now find support along the upper edge of the big maroon channel from the monthly chart, if the upper trend line is pushed out to encompass all of primary wave A.

Intermediate wave (5) is incomplete with just minor waves 1 and now probably 2 within it completed.

At 1,826 minor wave 3 would reach 0.618 the length of minor wave 1. Minor wave 1 is extended, so minor waves 3 and 5 may not be.

Also now at 1,826 minute wave v would reach equality in length with minute wave iii. This increases the probability of this target.

At 1,864 intermediate wave (5) would reach equality in length with intermediate wave (1). This is the most common ratio between first and fifth waves so this target has a good probability.

Within minor wave 3 minute wave ii may not move beyond the start of minute wave i. This wave count is invalidated with movement below 1,746.20.

S&P 500 hourly 2013

Minute wave iv continued lower ending just below the 0.382 Fibonacci ratio of minute wave iii.

There is a slight overshoot of the parallel channel. I will expect the next wave up for minute wave v to end either midway within the channel, or to find resistance at the upper edge.

Minute wave iv completed as a zigzag; this is how it subdivides on the five minute chart. There is some alternation between minute waves ii and iv: minute wave ii is deeper and its C wave is much longer than its A wave, and minute wave iv is shallower with an A wave longer than the C wave.

Within minute wave iv minuette wave (c) is 0.64 longer than 0.618 the length of minuette wave (a).

Minute wave iv has now lasted a Fibonacci 13 hours, and minute wave ii lasted 16 hours; they are reasonably in proportion. I expect it is now highly likely that minute wave iv is completed.

I will expect upwards movement for about two to three days to the target at 1,826.

When there is a clear five up on the hourly chart then I will have full confidence that minute wave iv is over. Prior to this confirmation the invalidation point must remain at 1,773.44. If minute wave iv continues further sideways and lower it may not move into minute wave i price territory.

Alternate Bullish Wave Count.

S&P 500 daily 2013

It is possible that a new cycle degree bull market began at 666.79. So far it is not yet halfway through, and I would expect it to last for a few years (at least five more years and maybe longer).

At some stage then the current upwards impulse, labeled intermediate wave (5) for the main wave count and minor wave 5 for this alternate, will be completed. At that stage both wave counts would expect a trend change. The main wave count would expect a huge cycle degree trend change, and this alternate would expect an intermediate degree trend change. If the downwards movement subdivides as a three and remains within the maroon channel then this alternate would be preferred. If it breaches the channel this alternate would be discarded.

The maroon – – – channel is an acceleration channel drawn about primary waves 1 and 2 on the monthly chart. I would not expect intermediate wave (2) to breach this channel. If downwards movement breaches the channel I would discard this wave count.

The daily chart shows the structure of minor wave 5. It is incomplete. Targets are the same because they are calculated using the same wave lengths as the main wave count. This bullish alternate does not diverge from the main wave count at this stage, and it will not for some weeks to come.

S&P 500 Elliott Wave Technical Analysis – 18th November, 2013

Last analysis expected more upwards movement towards short term targets at 1,804 and 1,807. Upwards movement reached 1,802.33, 1.67 points short of the first target, before turning lower.

The wave counts remain the same.

Continue reading S&P 500 Elliott Wave Technical Analysis – 18th November, 2013