Monthly Archives: July 2014

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AAPL Elliott Wave Technical Analysis – 30th July, 2014

It’s make or break time for my wave Elliott wave count with AAPL. Any movement above 100.72 would invalidate the wave count and indicate AAPL is in a new upwards trend.

I expect to see downwards movement from AAPL from this point. The long term target is 53.53 which may be seven months away.

Click on charts to enlarge.

AAPL weekly 2012

I expect that AAPL is within a correction for intermediate wave (4) which is unfolding as a zigzag. Intermediate wave (4) may find support, and may end, at the lower edge of the Elliott channel drawn here.

Intermediate wave (3) is just 2.88 longer than 4.236 the length of intermediate wave (1).

Intermediate wave (2) is a zigzag, with no Fibonacci ratio between minor waves A and C within it. Minor wave C is clearly longer than minor wave A.

I would have expected intermediate wave (4) to most likely exhibit better alternation with intermediate wave (2) and not be a zigzag, but so far minor wave A within intermediate wave (4) looks like a clear five wave impulse. We may see alternation between these structures in the length of their A and C waves. I have seen this happen before, albeit rarely.

Within intermediate wave (4) minor wave C may be close to equality in length with minor wave A.

Intermediate wave (2) was a deep 82% correction. At this stage intermediate wave (4) is showing alternation in depth of correction by being very shallow, and should continue to be. The lowest I would expect it to go may be the 0.382 Fibonacci ratio of intermediate wave (3) at 43.48, but because of its shallowness it looks like it may not reach that low.

Intermediate wave (4) may not move into intermediate wave (1) price territory below 28.99.

AAPL weekly 2012

Minor wave B has almost no room left for movement. It may not move beyond the start of minor wave A above 100.72.

This wave count relies upon my analysis of minor wave A downwards as a five wave impulse.

Within minor wave A there are no adequate Fibonacci ratios between minute waves i, iii and v. Minute wave iii is shorter than minute wave i, and minute wave v is the shortest.

Within minute wave iii there are no adequate Fibonacci ratios between minuette waves (i), (iii) and (v). This is not actually unusual for AAPL; I have found it to only rarely exhibit nice Fibonacci ratios which does make target calculation more difficult.

Minor wave B is seen as a double zigzag. The second zigzag is now complete.

The aqua blue trend channel is a best fit. When this channel is clearly breached by downwards movement then I shall have full confidence in the target at 53.53, or at least that the direction is down and extremely likely to make a new low below 55.01. Minor wave C is extremely likely to make at least a slight new low below minor wave A to avoid a truncation.

AAPL daily 2012

The daily chart focusses on the structure of the final wave up within minor wave B: minuette wave (c) of the second zigzag.

The small orange channel is drawn using Elliott’s technique about minuette wave (c): draw the first trend line from the ends of subminuette waves i to iii, then place a parallel copy on the end of subminuette wave ii. Only when this channel is very clearly breached with a full daily candlestick below it and not touching the lower trend line will I have confidence in this trend change. While price remains within this channel we may yet see more upwards movement.

At 53.53 minor wave C would reach equality in length with minor wave A. Minor wave A lasted seven months, so minor wave C may be about an even duration.

S&P 500 Elliott Wave Technical Analysis – 29th July, 2014

Overall downwards movement was expected for Tuesday’s session, and we have a red candlestick. Price moved higher first though, and remains below the invalidation point.

Summary: Another fourth wave correction may have arrived last Friday. This would be confirmed with movement below 1,955.59. We may get this confirmation this week. This correction may last either 13 or 21 days. In the short term for tomorrow I expect a third wave down to continue towards 1,946.

Click on charts to enlarge.

The aqua blue trend lines are critical. Draw the first trend line from the low of 1,158.66 on 25th November, 2011 to the next swing low at 1,266.74 on 4th June, 2012. Create a parallel copy and place it on the low at 1,560.33 on 24th June, 2013. While price remains above the lower of these two aqua blue trend lines we must assume the trend remains upwards. This is the main reason for the bullish wave count being my main wave count.

Bullish Wave Count.

S&P 500 daily 2014

There are a couple of things about this wave count of which I am confident. I see minor wave 3 within intermediate wave (1) as over at 1,729.86 (19th September, 2013). It has the strongest upwards momentum and is just 0.76 longer than 2.618 the length of minor wave 1. At 455 days duration this is a remarkably close Fibonacci ratio. The subdivisions within it are perfect. If this is correct then minor wave 4 ends at 1,646.47 and this is where minor wave 5 begins.

Minor wave 5 may be only one of two structures: a simple impulse or an ending diagonal. At this stage an ending diagonal looks very unlikely; minor wave 5 is unfolding as an impulse. If minor wave 5 has passed its middle then I would expect to see more divergence between price and MACD develop over coming weeks.

Along the way up towards the final target I would expect to see two more corrections complete: the current correction for minuette wave (iv) and one more for minute wave iv.

Minuette wave (iv) may not move into minuette wave (i) price territory below 1,858.71.

At 2,218 minor wave 5 would reach equality in length with minor wave 3. This target may be met in October.

I have drawn a parallel channel about minuette wave (iii) using Elliott’s first technique: draw the first trend line from the highs of subminuette waves i to iii, then place a parallel copy on the low of subminuette wave ii. A clear breach of this channel to the downside would provide strong confirmation that minuette wave (iv) has arrived. Minuette wave (iv) may reach as low as the 0.618 Fibonacci ratio of minuette wave (iii) at 1,881.28, which would provide alternation in depth of correction between minuette waves (ii) and (iv) and would see downwards movement find final support about or just above the upper aqua blue trend line, continuing a pattern which has lasted about a year now.

The large maroon – – – channel is copied over from the weekly chart. It is drawn in exactly the same way on bull and bear wave counts. For the bull wave count this channel is termed a base channel about primary waves 1 and 2. A lower degree second wave should not breach the lower edge of a base channel drawn about a first and second wave one or more degrees higher. The lower maroon – – – trend line differentiates the bull and bear wave counts at cycle degree and monthly chart level.

Main Hourly Wave Count.

S&P 500 hourly 2014

If subminuette wave iv is seen as a barrier triangle then subminuette wave v would be expected to be either very short or a very long extension. This main wave count expects subminuette wave v is over and was very short. The alternate looks at the possibility of an extended fifth wave.

Minuette wave (ii) was a shallow 37% sideways moving combination. Given the guideline of alternation minuette wave (iv) is most likely to be a deep zigzag or double zigzag correction. Minuette wave (ii) lasted a Fibonacci 34 days. I would expect minuette wave (iv) to be shorter in time and last either 13 or 21 days because zigzags do tend to be shorter than combinations. So far it has lasted only three days.

Minuette wave (iv) should breach the channel containing minuette wave (iii) so movement below the lower orange trend channel on the daily chart is very likely.

At 1,946 micro wave 3 would reach 1.618 the length of micro wave 1. Micro wave 3 should show an increase in downwards momentum and so I would expect momentum to further increase tomorrow.

I am now more confident that micro wave 2 is most likely over and micro wave 3 downwards has just begun. Within submicro wave (3) no second wave correction may move beyond the start of its first wave above 1,981.37.

Draw a base channel about micro waves 1 and 2: draw the first trend line from the start of micro wave 1 to the end of micro wave 2, then place a parallel copy on the end of micro wave 1. I would expect micro wave 3 to have the power to break through support at the lower trend line, and along the way down upwards corrections should find resistance at the upper edge of the channel.

This main hourly wave count would be confirmed with a new low below 1,955.59.

S&P 500 5 minute 2014

Alternate Hourly Wave Count.

S&P 500 hourly alternate 2014

By simply moving the degree of labeling within subminuette wave v down one degree it is possible that only the first wave within it is complete.

This alternate expects subminuette wave v to be a long extension. In my experience fifth waves following triangles are more often short than long so this wave count has a lower probability than the main wave count.

So far micro wave 2 is an incomplete zigzag. At 1,961 submicro wave (C) would reach equality in length with submicro wave (A).

On this alternate chart, the channel about micro wave 2 is a corrective channel and I would expect downwards movement to find strong support at the lower edge of this channel. The lower trend line would provide earliest differentiation between the main and alternate hourly wave counts: the main wave count would expect this trend line to be strongly breached and this alternate would expect it to provide final support.

Micro wave 2 may not move beyond the start of micro wave 1 below 1,955.59.

Bearish Alternate Wave Count

S&P 500 daily bear 2014

This bearish alternate wave count expects that the correction is not over. The flat correction which ended at 666.79 was only cycle wave a (or w) of a larger super cycle second wave correction.

The structure and subdivisions within primary wave C for the bear wave count are the same as for intermediate wave (1) for the bull wave count. Thus the short to mid term outlook is identical.

The differentiation between the bull and bear wave count is the maroon – – – channel. The bull wave count should see price remain above the lower maroon – – – trend line. The bear wave count requires a clear breach of this trend line. If this trend line is breached by a full weekly candlestick below it and not touching it then this bear wave count would be my main wave count and I would then calculate downwards targets.

We should always assume the trend remains the same until proven otherwise; the trend is your friend. While price remains above the lower maroon – – – trend line I will assume that the S&P 500 remains within a bull market.

This analysis is published about 08:15 p.m. EST.

FTSE Elliott Wave Technical Analysis – 23rd July, 2014

Last analysis of FTSE expected downwards movement to complete a correction. The target was at 6,655.22. Downwards movement reached 6,643.62 (11.6 points below the target) and turned. I expect upwards movement from here to a mid term target about 6 – 8 weeks away at 7,271.

Click on charts to enlarge.

FTSE monthly 2014

The bigger picture sees FTSE in a huge correction for a super cycle wave (II).

Super cycle wave (II) may be either a regular flat correction (labeled cycle a, b, c) or it may be a double flat or combination (labeled cycle w, x and y).

A regular flat correction would expect a five wave structure downwards for cycle wave c to move at least a little below the end of cycle wave a at 3,460.71 to avoid a truncation. Cycle wave c would be expected to last from one to several years, with a shorter time frame more likely.

A double flat or combination would expect a three wave structure downwards for cycle wave y to end about the same level as cycle wave a at 3,460.71. Cycle wave y would be expected to last from one to several years, with a longer time frame more likely. It could look like a repeat of cycle wave a.

There is divergence at the monthly chart level with MACD which supports this wave count.

Cycle wave b (or x) subdivides as a zigzag and is most likely incomplete. At 7,691 intermediate wave (5) would reach equality with intermediate wave (1).

FTSE daily 2014

Intermediate wave (5) has begun. Sideways movement since the end of minor wave 1 at 6,894.88 is very corrective, and minor wave 2 subdivides perfectly as a zigzag. There is nice alternation within minor wave 2: minute wave a is a leading contracting diagonal and minute wave c is a swift impulse.

At 7,271 minor wave 3 would reach 1.618 the length of minor wave 1.

Intermediate wave (5) would reach equality in length with intermediate wave (1) at 7,691. Intermediate wave (5) lasted seven months. So far intermediate wave (1) is in its fourth month. In another three months it may end at equality in duration with intermediate wave (1).

Upwards movement from the low at 6,643.62 is a clear five on the hourly chart. This adds confidence to this wave count.

If price breaks below 6,643.62 then minor wave 2 may be continuing as a double zigzag, flat or combination. The invalidation point would move down to 6,507.08. However, at this stage I would consider this unlikely.