S&P 500 Elliott Wave Technical Analysis – 26th November, 2014

Another green candlestick and mostly sideways movement fits the Elliott wave count. The structure is managing to complete below the target, and may manage to end by the target.

Summary: I expect upwards movement for tomorrow’s session to a short term target at 2,077. About this point I expect another small fourth wave correction.

Click on charts to enlarge.

Bull Wave Count

S&P 500 daily 2014

I will favour neither the bull or bear wave count. Both are viable and both expect this current upwards impulse may again be close to completion.

To see a weekly chart with subdivisions and how to draw trend lines and channels click here.

Upwards movement from the low at 666.79 subdivides as an almost complete 5-3-5. For the bull wave count this is seen as primary waves 1-2-3.

Within intermediate wave (5) minor wave 2 is an expanded flat and minor wave 4 is a zigzag. Minor wave 3 is 14.29 points longer than 1.618 the length of minor wave 1.

At intermediate degree there is also a very close relationship between intermediate waves (3) and (1): intermediate wave (3) is just 0.76 points less than 2.618 the length of intermediate wave (1).

The aqua blue trend lines are traditional technical analysis trend lines. These lines are long held, repeatedly tested, and shallow enough to be highly technically significant. When the lower of these double trend lines is breached by a close of 3% or more of market value that should indicate a trend change. It does not indicate what degree the trend change should be though.

There is triple technical divergence between MACD and price at the weekly chart level.

There is now no longer technical divergence between price and MACD at the daily chart level.

I would expect the final top to form a slow curving structure, like a double head and shoulders or a rounding top. At the high volume should be low. Once the high is in place the new downwards trend may begin with slow movement, and deep second wave corrections. These would form two right hand shoulders, or the right hand side of a rounding top. When the neckline is formed, and eventually broken I would not expect to see an increase in volume, but I would expect to see an increase in momentum.

Movement below 1,820.66 could not be a second wave correction within minor wave 5, and so at that stage the final fifth wave would have to be over. A trend change at primary (bull count) or cycle degree (bear count) would be confirmed.

S&P 500 hourly 2014

Wednesday began with more sideways movement, not downwards movement. Micro wave 4 completed as a regular contracting triangle. This fits very well on the five minute chart. Thereafter, price moved upwards to begin micro wave 5.

At 2,077 micro wave 5 would reach 0.382 the length of micro wave 1.

Keep drawing an Elliott channel about subminuette wave iii: draw the first trend line from the highs labelled micro waves 1 to 3, then place a parallel copy on the end of micro wave 2. Look for upwards movement to find resistance and end when it touches the upper trend line.

Subminuette wave iv to come should show up on the daily chart as one to four red candlesticks or doji. Subminuette wave iv should break below the parallel channel containing subminuette wave iii, and may not move into subminuette wave i price territory below 2,038.70.

Technical divergence between price and MACD should continue.

S&P 500 5 minute 2014

Bear Wave Count

S&P 500 daily bear 2014

This bear wave count differs from the bull wave count at the monthly chart level and at super cycle wave degree. To see the historic picture go here.

The subdivisions within primary waves A-B-C are seen in absolutely exactly the same way as primary waves 1-2-3 for the bull wave count.

For both wave counts now that minor wave 5 may be a complete structure on the hourly and five minute charts, I have an alternate wave count which moves the degree of labelling within it all down one degree. A completion of a five wave impulse up within minor wave 5 may be either minor wave 5 in its entirety, or it may only be minute wave i within minor wave 5.

At cycle degree wave b is over the maximum common length of 138% the length of cycle wave a, at 161% the length of cycle wave a. At 2,393 cycle wave b would be twice the length of cycle wave a and at that point this bear wave count should be discarded.

This analysis is published about 09:08 p.m. EST.