Category Archives: Indices

Below are analyses that have been published for S&P 500, Nasdaq, FTSE, DJIA, Russell 2000:

FTSE Elliott Wave Technical Analysis – 10th May, 2016

FTSE breached the channel confirming a trend change. Thereafter, it continued lower as expected.

Summary: FTSE may have just begun a second wave correction. It may end in a few days about 6,279. But look out for surprises to the downside because it is possible it may end more quickly. The target remains at 3,796.

MONTHLY ELLIOTT WAVE COUNT

FTSE monthly 2016
Click chart to enlarge.

At the monthly chart level, FTSE is the clearest bear market.

The cyan trend line is drawn across the two major swing lows in the bull market which began on March 2009. This bull market trend line has been breached by a close well over 3% of market value, indicating a trend change from bull to bear.

The 200 day moving average is now declining (shown on the technical analysis daily chart at the end of analysis). Price has made a series of lower lows and lower highs. FTSE is in a bear market until proven otherwise.

From an Elliott Wave perspective, the downwards movement labelled intermediate wave (1) to the low in February 2016 has well overlapped back into the high labelled primary wave A of February 2011. This downwards movement may not be a fourth wave correction within an impulse unfolding upwards. So the prior wave up labelled cycle wave X or b must be over and it must be a three wave structure.

The cyan bull market trend line has provided resistance.

Super Cycle wave (II) is seen as either a large flat correction, a double flat or a double combination.

If Super Cycle wave (II) is a large flat, then within it cycle wave a was a regular flat and cycle wave b was a zigzag and 1.05 the length of cycle wave a. The length of cycle wave b indicates the most common type of flat, an expanded flat, may be unfolding. Cycle wave c downwards must subdivide as a five wave structure. Cycle wave c would be expected to end substantially below the end of cycle wave a at 3,460. At 1,477 cycle wave c would reach 1.618 the length of cycle wave a.

If Super Cycle wave (II) is a double flat, then the first flat in the double was a regular flat labelled cycle wave w. The double is joined by a three in the opposite direction, a zigzag labelled cycle wave x. Now a second flat correction should unfold sideways for cycle wave y. Cycle wave y would look similar to cycle wave w, with two large market crashes within it. It should end about the same level as cycle wave w at 3,460, so that the whole movement is a sideways structure.

If Super Cycle wave (II) is a double combination, then the second structure in the double for cycle wave y may be either a zigzag or a triangle. Either of these should reach down only to about the same level as cycle wave w at 3,460, so that the whole structure has a sideways look to it.

Of all these three options the simple expanded flat labelled cycle waves a-b-c is the most likely because expanded flats are very common structures.

WEEKLY ELLIOTT WAVE COUNT

FTSE weekly 2016
Click chart to enlarge.

Intermediate wave (1) subdivides as an impulse. Intermediate wave (2) is subdividing as a zigzag. Only when the small blue channel about this zigzag is breached to the downside may confidence be had that it is over.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 7,122.7.

DAILY ELLIOTT WAVE COUNT

FTSE daily 2016
Click chart to enlarge.

A five down looks fairly clear for FTSE. This should be expected to be followed by a three up. Minor wave 2 would most likely end about the 0.618 Fibonacci ratio. It may last a few more days.

However, technically it may also be over. It would be relatively brief and shallow though at only 0.342 of minor wave 1 and lasting only two days. It is possible it may be over but looks more likely it will continue higher.

The first target for intermediate wave (3) is at 3,796 where it would reach 1.618 the length of intermediate wave (1). If price gets to the first target and the structure is incomplete, or if price keeps falling through the first target, then the second target would be used. At 2,172 intermediate wave (3) would reach 2.618 the length of intermediate wave (1).

Intermediate wave (3) must make a new low below the end of intermediate wave (1) at 5,499.51.

TECHNICAL ANALYSIS

FTSE daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

Neither Google / Yahoo data feed nor StockCharts provide volume data for FTSE. Comments on volume are taken from Yahoo Finance data.

The rise in price for 10th May comes on lighter volume. The rise in price is not supported by volume. This supports the Elliott wave count.

At the low, the candlestick for 6th May completes a hammer. Now the 9th and 10th of May complete a bullish engulfing pattern. This indicates a trend change but does not indicate how high the next wave may go.

Price is finding some resistance at the 200 day moving average.

ADX is increasing indicating the market is trending downwards. ATR is still declining indicating a trend has not yet started, or that there is something wrong with this downwards trend so far.

RSI is neutral. There is room for price to rise or fall. There was slight divergence between RSI at the low of the 6th May and the low of 4th May. This indicates some upwards movement which is unfolding.

Stochastics is returning from oversold.

This analysis is published @ 04:02 a.m. EST on 11th May, 2016.

Nasdaq Composite Elliott Wave Analysis – 4th May, 2016

Last Nasdaq analysis expected upwards movement to end at resistance at the bear market trend line. Price has turned short of the line.

Summary: Nasdaq has had a trend change. The target for a third wave down is 3,227. It may be met in about another ten weeks.

New updates to this analysis are in bold.

BEAR WAVE COUNT

MONTHLY CHART

Nasdaq Composite monthly 2016
Click chart to enlarge.

Grand Super Cycle wave II may be an incomplete flat, combination or double flat.

A new low below 2,861.51 would invalidate the bull wave count and confirm a huge market crash.

All subdivisions are seen in exactly the same way, only the degree of labelling is different.

If Grand Super Cycle wave II is a combination, then super cycle wave (y) would be a zigzag or triangle.

If Grand Super Cycle wave II is a double flat, then super cycle wave (y) would be a flat correction ending about the same level as super cycle wave (w) at 1,160.

If Grand Super Cycle wave II is a regular flat, then super cycle wave (c) would be a five wave structure to end below super cycle wave (a) at 1,160 to avoid a truncation.

WEEKLY CHART

Nasdaq Composite weekly 2016
Click chart to enlarge.

The degree of labelling within downwards movement from the all time high only has been moved up one degree this week.

Downwards movement from the all time high may be a first wave for primary wave 1, a deep second wave correction for primary wave 2, and now an incomplete third wave for primary wave 3.

Primary wave 1 may have ended with a truncation. This is possible after the prior move of minor wave 3 moved “too far too fast”.

Primary wave 3 must move far enough below the price extreme of primary wave 1 to allow for room for the following correction of primary wave 4 to unfold and not move back into primary wave 1 price territory.

So far within primary wave 3 intermediates (1) and (2) are complete. A third wave at two large degrees may be just beginning.

The prior bull market trend line was breached by a close (on a daily basis) by more than 3% of market value on 24th August 2015. This indicated the market had changed from bull to bear. The same technique will be used again, in the opposite direction.

A bear market trend line is drawn from the all time high to the first major swing high within the bear market labelled intermediate wave (2). The bear market should be expected to remain intact while price remains below this trend line. When this trend line is breached by a close (on a daily basis) of 3% or more of market value, then it would be indicating a trend change from bear to bull.

DAILY CHART

Nasdaq Composite daily 2015
Click chart to enlarge.

The channel about intermediate wave (2) has been clearly breached by downwards movement. Price fell short of the bear market trend line.

Minor wave 1 may be incomplete. When it is done, a bounce for minor wave 2 may last a few days and would still most likely correct to the 0.618 Fibonacci ratio of minor wave 1. The small cyan trend channel is a best fit about this downwards movement. When it is clearly breached by upwards movement, then minor wave 2 would most likely have started.

Minor wave 2 may not move beyond the start of minor wave 1 above 4,969.32.

BULL WAVE COUNT

MONTHLY CHART

Nasdaq Composite monthly 2015
Click chart to enlarge.

Grand Super Cycle wave II is seen here as over in just 31 months. This is possible, but it is more likely it would last longer than this.

This wave count sees Nasdaq in a Grand Super Cycle wave III upwards.

There is no Fibonacci ratio between cycle waves I and III.

Super Cycle wave (I) is an incomplete impulse. Within Super Cycle wave (I), cycle wave IV may be complete.

Cycle wave II was a very deep 0.91 zigzag lasting 17 months. Cycle wave IV may have exhibited alternation as a shallow flat lasting just 7 months. This is possible, but what is equally as possible is cycle wave IV may continue sideways as a double flat or double combination. Only a clear five up on the daily chart would eliminate these possibilities. A trend change at cycle degree requires confirmation with a new high above 5,176.77 (to invalidate the bear count) and a five wave structure upwards on the daily chart.

Cycle wave IV may not move into cycle wave I price territory below 2,861.51.

WEEKLY CHART

Nasdaq Composite weekly 2015
Click chart to enlarge.

Cycle wave IV is most likely to be a flat, combination or triangle to exhibit structural alternation with the zigzag of cycle wave II.

Regular flats fit well within trend channels. Their C waves normally are about even in length with their A waves. Primary wave C is just 35.97 points longer than equality in length with primary wave A.

The degree of labelling within cycle wave IV may be moved down one degree. This flat correction may be only primary wave A of a larger flat, or a triangle, or primary wave W of a double flat or double combination. A clear five wave structure upwards on the daily chart is absolutely required before any confidence may be had in this wave count.

Unfortunately, the upwards wave which has recently ended is not clear. It would subdivide both as a zigzag and an impulse. As it is impossible to determine with certainty which one it is, both possibilities must be considered. This wave count is still technically valid.

TECHNICAL ANALYSIS

MONTHLY CHART

Nasdaq Composite daily 2015
Click chart to enlarge. Chart courtesy of StockCharts.com.

A more conservatively drawn trend line from the end of March 2009 is drawn here (blue line). It was reasonably shallow, repeatedly tested, and is highly technically significant. It has been breached and provided resistance.

Since May 2010, overall, as price rose to all time highs volume declined. The bull market was not well supported by volume and is suspicious.

There was slight negative technical divergence with price and MACD at the all time high.

As price has fallen four out of five months from the all time high it comes with overall declining volume. The fall in price is not being supported by volume for Nasdaq. This is not necessarily suspicious as the market can fall of its own weight.

On Balance Volume has breached a trend line held since May 2012, (green line) which is bearish. OBV turned up and tested the green line which held. The strength of that line is reinforced. This is further bearish indication. The blue line is redrawn this week. OBV should find support at the blue line, which may initiate a bounce.

There is negative divergence between price and RSI going back to December 2013, as price made all time highs. This is a strong bearish indicator. This was also seen up to March 2000, and was followed by a 78% drop in market value to the low of 1,108 in October 2012. It does not mean that the market must make a similar fall at this time, but it is a strong bearish indicator.

DAILY CHART

Nasdaq Composite daily 2015
Click chart to enlarge. Chart courtesy of StockCharts.com.

Nasdaq is in a bear market until proven otherwise.

1. The 200 day moving average is flat to declining.

2. Price has breached a bull market trend line.

3. Price remains below a bear market trend line.

4. From the all time high, price has made a series of lower lows and lower highs.

5. Bear market rallies from the all time high have been very deep and fully retraced.

Even if one of these five conditions is broken, that would not alone be enough to confirm an end to the bear market and a new bull market. The one thing which would fully and finally confirm a new bull market would be a new all time high. Prior to that a balance of these conditions being broken would strongly indicate a new bull market.

It should always be assumed that the trend remains the same, until proven otherwise.

The bear market rally came with declining volume. The rise in price was not supported by volume and so was suspicious. Now price is falling on increasing volume. This supports a trend change and more downwards movement.

ADX indicates there is currently a new downwards trend. It is increasing and the +DX line is above the -DX line.

ATR is now beginning to increase after a long period of declining. ATR agrees with ADX; the market is trending downwards.

On Balance Volume is moving lower with price. There is no support line that has been found at the daily chart level for OBV.

RSI is not yet extreme. There is room for price to fall.

Stochastics is now entering oversold, but this oscillator may remain extreme for reasonable periods of time during a trending market. Its best use is for divergence to indicate trend weakness.

While I have found a Fibonacci 13 day moving average useful for support during recent upwards waves, a shorter Fibonacci 5 day moving average better shows support for the faster downwards waves. It may be useful here again.

This analysis is published @ 04:48 a.m. EST.

Nasdaq Composite Elliott Wave Analysis – 19th April, 2016

Last Nasdaq analysis expected upwards movement to end about 4,784. This has not happened. Price continues to move upwards.

Summary: Nasdaq is still in a bear market, until proven otherwise. A big third wave down is close. If this current bounce continues, it may end when price finds resistance at the bear market trend line.

New updates to this analysis are in bold.

BEAR WAVE COUNT

MONTHLY CHART

Nasdaq Composite monthly 2016
Click chart to enlarge.

Grand Super Cycle wave II may be an incomplete flat, combination or double flat.

A new low below 2,861.51 would invalidate the bull wave count and confirm a huge market crash.

All subdivisions are seen in exactly the same way, only the degree of labelling is different.

If Grand Super Cycle wave II is a combination, then super cycle wave (y) would be a zigzag or triangle.

If Grand Super Cycle wave II is a double flat, then super cycle wave (y) would be a flat correction ending about the same level as super cycle wave (w) at 1,160.

If Grand Super Cycle wave II is a regular flat, then super cycle wave (c) would be a five wave structure to end below super cycle wave (a) at 1,160 to avoid a truncation.

WEEKLY CHART

Nasdaq Composite weekly 2016
Click chart to enlarge.

Downwards movement from the all time high may be a first wave for intermediate wave (1), a deep second wave correction for intermediate wave (2), and now an incomplete third wave for intermediate wave (3).

Intermediate wave (1) may have ended with a truncation. This is possible after the prior move of minor wave 3 moved “too far too fast”.

With intermediate wave (1) seen as over with a truncation, the structure of intermediate wave (2) now fits as a zigzag. It looks like a three.

Intermediate wave (3) must move far enough below the price extreme of intermediate wave (1) to allow for room for the following correction of intermediate wave (4) to unfold and not move back into intermediate wave (1) price territory.

The prior bull market trend line was breached by a close (on a daily basis) by more than 3% of market value on 24th August 2015. This indicated the market had changed from bull to bear. The same technique will be used again, in the opposite direction.

A bear market trend line is drawn from the all time high to the first major swing high within the bear market labelled intermediate wave (2). The bear market should be expected to remain intact while price remains below this trend line. When this trend line is breached by a close (on a daily basis) of 3% or more of market value, then it would be indicating a trend change from bear to bull.

This technique is outlined by Magee in the classic “Technical Analysis of Stock Trends”. It is simple and simple is best.

DAILY CHART

Nasdaq Composite daily 2015
Click chart to enlarge.

Within intermediate wave (3), an impulse is complete for minor wave 1.

Minor wave 2 may be a zigzag. It may end when price finds resistance at the bear market trend line.

The pink channel is a best fit about this upwards movement. When it is clearly breached by downwards movement, that shall be early indication of a trend change.

Within minor wave 2, the correction for subminuette wave iv may not move into subminuette wave i price territory below 4,747.65.

A third wave within a third wave down would be expected for this wave count when minor wave 2 is over. At 3,227 intermediate wave (3) would reach 2.618 the length of intermediate wave (1).

Minor wave 2 may not move beyond the start of minor wave 1 above 5,176.77.

BULL WAVE COUNT

MONTHLY CHART

Nasdaq Composite monthly 2015
Click chart to enlarge.

Grand Super Cycle wave II is seen here as over in just 31 months. This is possible, but it is more likely it would last longer than this.

This wave count sees Nasdaq in a Grand Super Cycle wave III upwards.

There is no Fibonacci ratio between cycle waves I and III.

Super Cycle wave (I) is an incomplete impulse. Within Super Cycle wave (I), cycle wave IV may be complete.

Cycle wave II was a very deep 0.91 zigzag lasting 17 months. Cycle wave IV may have exhibited alternation as a shallow flat lasting just 7 months. This is possible, but what is equally as possible is cycle wave IV may continue sideways as a double flat or double combination. Only a clear five up on the daily chart would eliminate these possibilities. A trend change at cycle degree requires confirmation with a new high above 5,176.77 (to invalidate the bear count) and a five wave structure upwards on the daily chart.

Cycle wave IV may not move into cycle wave I price territory below 2,861.51.

WEEKLY CHART

Nasdaq Composite weekly 2015
Click chart to enlarge.

Cycle wave IV is most likely to be a flat, combination or triangle to exhibit structural alternation with the zigzag of cycle wave II.

Regular flats fit well within trend channels. Their C waves normally are about even in length with their A waves. Primary wave C is just 35.97 points longer than equality in length with primary wave A.

The degree of labelling within cycle wave IV may be moved down one degree. This flat correction may be only primary wave A of a larger flat, or a triangle, or primary wave W of a double flat or double combination. A clear five wave structure upwards on the daily chart is absolutely required before any confidence may be had in this wave count. A new cycle degree bull market should last one to several years. Waiting for confirmation is a wise idea.

TECHNICAL ANALYSIS

MONTHLY CHART

Nasdaq Composite daily 2015
Click chart to enlarge. Chart courtesy of StockCharts.com.

A more conservatively drawn trend line from the end of March 2009 is drawn here (blue line). It was reasonably shallow, repeatedly tested, and is highly technically significant. It has been breached and provided resistance.

Since May 2010, overall, as price rose to all time highs volume declined. The bull market was not well supported by volume and is suspicious.

There was slight negative technical divergence with price and MACD at the all time high.

On Balance Volume has breached a trend line held since May 2012, (green line) which is bearish. OBV turned up and tested the green line which held. The strength of that line is reinforced. This is further bearish indication. OBV has found support at the blue line. A breach of this blue line would be very strong bearish indication. This line is highly technically significant because it is long held and tested three times at the monthly chart level.

There is negative divergence between price and RSI going back to December 2013, as price made all time highs. This is a strong bearish indicator. This was also seen up to March 2000, and was followed by a 78% drop in market value to the low of 1,108 in October 2012. It does not mean that the market must make a similar fall at this time, but it is a strong bearish indicator.

DAILY CHART

Nasdaq Composite daily 2015
Click chart to enlarge. Chart courtesy of StockCharts.com.

Nasdaq is in a bear market until proven otherwise.

1. The 200 day moving average is flat to declining.

2. Price has breached a bull market trend line.

3. Price remains below a bear market trend line.

4. From the all time high, price has made a series of lower lows and lower highs.

5. Bear market rallies from the all time high have been very deep and fully retraced.

Even if one of these five conditions is broken, that would not alone be enough to confirm an end to the bear market and a new bull market. The one thing which would fully and finally confirm a new bull market would be a new all time high. Prior to that a balance of these conditions being broken would strongly indicate a new bull market.

It should always be assumed that the trend remains the same, until proven otherwise.

As price moves higher for several weeks now in a bear market rally, it comes on overall declining volume. The rise in price is not supported by volume and is unsustainable.

ADX indicates there is currently an upwards trend.

ATR disagrees. ATR declining is more normal for a consolidating market than a trending market. This upwards trend is not normal; it comes with a decline in range. This indicates weakness in the trend.

On Balance Volume is currently constrained within two trend lines. A break above the pink trend line would be a short term bullish signal. A break below the yellow line would be a short term bearish signal.

RSI exhibits divergence between price at the current high and the highs a few days ago of 1st April. This indicates that upwards movement from price is weak.

Stochastics exhibits divergence between price at the current high and the high of 3rd March. This also indicates upwards movement from price is weak.

On balance, there is enough weakness from price to judge that this upwards movement is more likely a bear market rally than a new bull market. This upwards movement should be expected to be fully retraced.

This analysis is published @ 05:07 a.m. EST on 20th April, 2016.

FTSE Elliott Wave Technical Analysis – 23rd March, 2016

Summary: FTSE remains in a bear market: lower highs, lower lows, 200 day moving average still pointing lower, and price below the bear market trend line.

WEEKLY ELLIOTT WAVE COUNT

FTSE weekly 2016
Click chart to enlarge.

DAILY ELLIOTT WAVE COUNT

FTSE daily 2016
Click chart to enlarge.

The structure of intermediate wave (2) still needs at least one more small final wave up to complete a corrective count of seven.

Redraw the channel if minor wave B moves lower. After a new high a subsequent break below the lower edge of the channel would indicate a trend change.

Intermediate wave (2) is still most likely to end about the 0.618 Fibonacci ratio at 6,453.

TECHNICAL ANALYSIS

FTSE daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

Comments on volume use data from Yahoo Finance as StockCharts do not provide volume data for FTSE.

Downwards days continue to be stronger than upwards days for FTSE. The volume profile is still more bearish than bullish.

As price moves essentially sideways, volume is overall slightly declining. Price may find some resistance at the 200 day moving average.

Price is range bound between the 200 day average and the red horizontal support line at 6,035. A breakout above or below on a day with increased volume is required before the next trend direction can be known for FTSE. Volume favours a downwards breakout which supports the Elliot wave count.

RSI is not yet extreme. There is room for price to rise.

This analysis is published @ 11:03 p.m. EST.