Category Archives: Public Analysis

Below are analyses that have been published and made available to the general public:

S&P 500 Elliott Wave Analysis – 17th April, 2018 – Grand Super Cycle

S&P 500 Grand Super Cycle Elliott wave analysis.

Summary: From last analysis two wave counts are published. The main wave count remains valid. The alternate bearish wave count is not invalidated but should be now discarded due to a very low probability.

MAIN WAVE COUNT – BULLISH

YEARLY CHART

S&P 500 historic 2018
Click chart to enlarge.

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 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 0.42 zigzag lasting 2 years. There is alternation in depth 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.

Both Super Cycle waves (I) and (III) look to be extended in this analysis. If this is correct, then Super Cycle wave (V) may not extend.

MONTHLY CHART

S&P 500 Monthly 2018
Click chart to enlarge.

This monthly chart shows all of the possible Super Cycle wave (IV) and Super Cycle wave (V) so far.

Super Cycle wave (IV) fits as a regular flat correction, and within it cycle wave b is a 1.03 length of cycle wave a. Cycle wave c exhibits no Fibonacci ratio to cycle wave a, but it does move below the end of cycle wave a avoiding a truncation.

All subdivisions within Super Cycle wave (IV) have a good fit for this wave count. Cycle wave a fits best as a zigzag. Cycle wave b fits best as a zigzag. Cycle wave c fits best as an impulse.

Super Cycle wave (V) may be nearing completion. The Elliott channel will be important. While price remains above the lower edge of the channel, it should be assumed that Super Cycle wave (V) will continue higher. If the channel is breached by downwards movement, that may be an early indication that the upwards wave labelled Super Cycle wave (V) should be over and a new wave down should then be underway. Draw the channel from the ends of cycle waves I to III (note that cycle wave I ends with a truncation), then place a parallel copy on the end of cycle wave II. This channel was only slightly overshot at the end of cycle wave IV, but not breached. This channel has now been held for 9 years.

ALTERNATE WAVE COUNT – BEARISH

YEARLY

S&P 500 historic bear 2018
Click chart to enlarge.

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 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.

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.

However, this wave count now suffers from a very big problem. If Grand Super Cycle wave II is continuing, then within it Super Cycle wave (B) is now well longer than twice the length of Super Cycle wave (A). At the last all time high in January 2018, Super Cycle wave (B) would have been 2.48 times the length of Super Cycle wave (A).

While there is no Elliott wave rule stating a maximum limit for B waves within flat corrections, they are most commonly between 1 to 1.38 times the length of their A waves. There is a convention within Elliott wave that states when the B wave passes 2 times the length of the A wave, the idea of a flat correction should be discarded based upon a very low probability. For this reason this wave count should now be discarded.

This analysis is published about 5:55 a.m. EST.

Lara’s Weekly Elliott Wave and Technical Analysis of S&P500 and Gold and US Oil – 6th April, 2018

Lara’s Weekly is an end of week Elliott Wave and Technical Analysis of the S&P 500, GOLD, and USOIL that focuses on the mid-to-long-term picture. This analysis service is designed for investors and swing traders.

Lara’s Weekly is at this time available to the general public, but in the near future it will be available by subscription only. I will be offering a once only awesome Grandfather rate to the earliest subscribers when Lara’s Weekly is launched as a paid subscription service. To make sure you don’t miss out and not get the Grandfather rate, be notified: click on the Notify Me button below:


Lara's Weekly Masthead

S&P 500

A pullback within an upwards swing was expected, but it arrived a day or so earlier. Price remains above the invalidation point.

Summary: The upwards swing should continue next week. The first target is at 2,705. If price keeps rising through the first target, then the next target is a zone from 2,752 to 2,766.

Always practice good risk management. Always trade with stops and invest only 1-5% of equity on any one trade.

The biggest picture, Grand Super Cycle analysis, is here.

Last historic analysis with monthly charts is here. Video is here.

An alternate idea at the monthly chart level is given here at the end of this analysis.

An historic example of a cycle degree fifth wave is given at the end of the analysis here.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART

S&P 500 Weekly 2018
Click chart to enlarge.

Cycle wave V must complete as a five structure, which should look clear at the weekly chart level. It may only be an impulse or ending diagonal. At this stage, it is clear it is an impulse.

Within cycle wave V, the third waves at all degrees may only subdivide as impulses.

Intermediate wave (4) has breached an Elliott channel drawn using Elliott’s first technique. The channel is redrawn using Elliott’s second technique as if intermediate wave (4) was over at the first swing low within it. If intermediate wave (4) continues sideways, then the channel may be redrawn when it is over. The upper edge may provide resistance for intermediate wave (5).

Intermediate wave (4) may not move into intermediate wave (1) price territory below 2,193.81. However, it would be extremely likely to remain within the wider teal channel (copied over from the monthly chart) if it were to be reasonably deep. This channel contains the entire bull market since the low in March 2009, with only two small overshoots at the end of cycle wave IV. If this channel is breached, then the idea of cycle wave V continuing higher would be discarded well before the invalidation point is breached.

At this stage, it now looks like intermediate wave (4) may be continuing further sideways as a combination, triangle or flat. These three ideas are separated into separate daily charts. All three ideas would see intermediate wave (4) exhibit alternation in structure with the double zigzag of intermediate wave (2).

A double zigzag would also be possible for intermediate wave (4), but because intermediate wave (2) was a double zigzag this is the least likely structure for intermediate wave (4) to be. Alternation should be expected until price proves otherwise.

DAILY CHART – TRIANGLE

S&P 500 Daily 2018
Click chart to enlarge.

This first daily chart looks at a triangle structure for intermediate wave (4). The triangle may be either a regular contracting or regular barrier triangle. Within the triangle, minor waves A, B and C may be complete.

If intermediate wave (4) is a regular contracting triangle, the most common type, then minor wave D may not move beyond the end of minor wave B above 2,801.90.

If intermediate wave (4) is a regular barrier triangle, then minor wave D may end about the same level as minor wave B at 2,801.90. As long as the B-D trend line remains essentially flat a triangle will remain valid. In practice, this means the minor wave D can end slightly above 2,801.90 as this rule is subjective.

When a zigzag upwards for minor wave D is complete, then this wave count would expect a final smaller zigzag downwards for minor wave E, which would most likely fall reasonably short of the A-C trend line.

If this all takes a further three weeks to complete, then intermediate wave (4) may total a Fibonacci 13 weeks and would be just two weeks longer in duration than intermediate wave (2). There would be very good proportion between intermediate waves (2) and (4), which would give the wave count the right look.

There are now a few overshoots of the 200 day moving average. This is entirely acceptable for this wave count; the overshoots do not mean price must now continue lower. The A-C trend line for this wave count should have a slope, so minor wave C should now be over.

DAILY CHART – COMBINATION

S&P 500 Daily 2018
Click chart to enlarge.

Double combinations are very common structures. The first structure in a possible double combination for intermediate wave (4) would be a complete zigzag labelled minor wave W. The double should be joined by a three in the opposite direction labelled minor wave X, which may be a complete zigzag. X waves within combinations are typically very deep; if minor wave X is over at the last high, then it would be a 0.79 length of minor wave W, which is fairly deep giving it a normal look. There is no minimum nor maximum requirement for X waves within combinations.

The second structure in the double would most likely be a flat correction labelled minor wave Y. It may also be a triangle, but in my experience this is very rare, so it will not be expected. The much more common flat for minor wave Y will be charted and expected.

A flat correction would subdivide 3-3-5. Minute wave a must be a three wave structure, most likely a zigzag. It may also be a double zigzag. On the hourly chart, this is now how this downwards movement fits best, and this will now be how it is labelled.

Minute wave b must now reach a minimum 0.90 length of minute wave a. Minute wave b must be a corrective structure. It may be any corrective structure. It may be unfolding as an expanded flat correction. A target is calculated for it to end. Within minuette wave (c), the correction for subminuette wave ii may not move beyond the start of subminuette wave i below 2,553.80.

The purpose of combinations is to take up time and move price sideways. To achieve this purpose the second structure in the double usually ends close to the same level as the first. Minor wave Y would be expected to end about the same level as minor wave W at 2,532.69. This would require a strong overshoot or breach of the 200 day moving average, which looks unlikely.

DAILY CHART – COMBINATION II

S&P 500 Daily 2018
Click chart to enlarge.

This is another way to label the combination.

Minor wave W is still a zigzag labelled in the same way, over at the first low within intermediate wave (4).

The double is joined by a quick three in the opposite direction labelled minor wave X, subdividing as a zigzag.

Minor wave Y may have begun earlier and may now be a complete expanded flat correction. However, in order to see minor wave Y complete there is a truncated fifth wave as noted on the chart. This reduces the probability of this wave count.

If intermediate wave (4) is a complete double combination, then minor wave Y has ended somewhat close to the end of minor wave W; the whole structure would have an overall sideways look to it.

A target is calculated for intermediate wave (5). Within intermediate wave (5), minor wave 2 may not move beyond the start of minor wave 1 below 2,553.80.

At the hourly chart level, this wave count would expect a five up continuing. The labelling for the short term would be the same as the hourly chart published above for the first wave count.

DAILY CHART – FLAT

S&P 500 Daily 2018
Click chart to enlarge.

Flat corrections are very common. The most common type of flat is an expanded flat. This would see minor wave B move above the start of minor wave A at 2,872.87.

Within a flat correction, minor wave B must retrace a minimum 0.9 length of minor wave A at 2,838.85. The most common length for minor wave B within a flat correction would be 1 to 1.38 times the length of minor wave A at 2,872.87 to 3,002.15. An expanded flat would see minor wave B 1.05 times the length of minor wave A or longer, at 2,889.89 or above.

Minor wave B may be a regular flat correction, and within it minute wave a may have been a single zigzag and minute wave b may have been a double zigzag. This has a very good fit. The subdivisions at the hourly chart level at this stage would be the same for the last wave down as the main wave count.

This wave count would require a very substantial breach of the 200 day moving average for the end of intermediate wave (4). This is possible but may be less likely than a smaller breach.

DAILY CHART – ALTERNATE

S&P 500 Daily 2018
Click chart to enlarge.

It is possible still that intermediate wave (4) was complete as a relatively brief and shallow single zigzag.

A new all time high with support from volume and any one of a bullish signal from On Balance Volume or the AD line would see this alternate wave count become the main wave count.

The target for minor wave 3 expects the most common Fibonacci ratio to minor wave 1.

Within minor wave 2, there is a truncation as noted on the chart. This must necessarily reduce the probability of this wave count.

Within minor wave 3, minute wave ii may not move beyond the start minute wave i below 2,553.80.

TECHNICAL ANALYSIS

WEEKLY CHART

S&P 500 weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

The last completed weekly candlestick has longer upper and lower wicks; it is almost a spinning top. This represents a balance of bulls and bears with the bears slightly winning. A slight increase in volume for downwards movement is only slightly bearish; volume remains lighter than the last two prior downwards movement, so overall volume is declining.

Another downwards week would provide a bearish signal from On Balance Volume. An upwards week would provide a bullish signal. Expect support here until it gives way.

The trend on ADX is extreme because the ADX line is above both directional lines.

DAILY CHART

S&P 500 daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

So far this week price has found support about the 200 day moving average, with some overshoots. Expect it to continue to show about where price should find support, until it does not.

While there was a small increase in volume for a downwards day on Friday, it is still lighter than two of the three prior upwards days. This supports the main Elliott wave count, which sees a low for Friday.

VOLATILITY – INVERTED VIX CHART

VIX daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

So that colour blind members are included, bearish signals will be noted with blue and bullish signals with yellow.

Normally, volatility should decline as price moves higher and increase as price moves lower. This means that normally inverted VIX should move in the same direction as price.

There is no new divergence for Friday.

BREADTH – AD LINE

AD Line daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

There is normally 4-6 months divergence between price and market breadth prior to a full fledged bear market. This has been so for all major bear markets within the last 90 odd years. With no longer term divergence yet at this point, any decline in price should be expected to be a pullback within an ongoing bull market and not necessarily the start of a bear market.

All of small, mid and large caps this week moved lower. None have made new small swing lows, and for all the fall has been even. There is no divergence to indicate underlying weakness.

Breadth should be read as a leading indicator.

Bullish divergence noted in last analysis has been followed by a downwards day. It is considered to have failed.

There is no new divergence for Friday.

DOW THEORY

The following lows need to be exceeded for Dow Theory to confirm the end of the bull market and a change to a bear market:

DJIA: 23,360.29.

DJT: 9,806.79.

S&P500: 2,532.69.

Nasdaq: 6,630.67.

At this stage, only DJIA has made a new major swing low. DJT also needs to make a new major swing low for Dow Theory to indicate a switch from a bull market to a bear market. For an extended Dow Theory, which includes the S&P500 and Nasdaq, these two markets also need to make new major swing lows.

Charts showing each prior major swing low used for Dow Theory may be seen at the end of this analysis here.

GOLD

More downwards movement was expected for Friday. The session did begin with a new low, but thereafter a strong bounce completed a green daily candlestick. Members were warned not to expect price to move downwards in a straight line. The bounce remains well below the Elliott wave invalidation point on the hourly chart.

Summary: For Monday look for a bounce to end about 1,338. Thereafter, expect this downwards swing to continue to support, which is at about 1,310 to 1,305. The target is at 1,312, which is now just above the support zone. Do not expect this downwards swing to move in a straight line, because that is not how price behaves within a consolidation.

Only the most experienced of traders should attempt to trade when price is clearly consolidating as it currently is for Gold and GDX. The rest should either hedge or wait for a breakout and trade the next trend. Always use stops and invest only 1-5% of equity on any one trade.

Grand SuperCycle analysis is here.

Last in-depth historic analysis with monthly and several weekly charts is here, video is here.

There are multiple wave counts at this time at the weekly and monthly chart levels. In order to make this analysis manageable and accessible only two will be published on a daily basis, one bullish and one bearish. This does not mean the other possibilities may not be correct, only that publication of them all each day is too much to digest. At this stage, they do not diverge from the two possibilities below.

BULLISH ELLIOTT WAVE COUNT

FIRST WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

Cycle wave b may be a single zigzag. Zigzags subdivide 5-3-5. Primary wave C must subdivide as a five wave structure and may be either an impulse or an ending diagonal. Overlapping at this stage indicates an ending diagonal.

Within an ending diagonal, all sub-waves must subdivide as zigzags. Intermediate wave (4) must overlap into intermediate wave (1) price territory. This diagonal is expanding: intermediate wave (3) is longer than intermediate wave (1) and intermediate wave (4) is longer than intermediate wave (2). Intermediate wave (5) must be longer than intermediate wave (3), so it must end above 1,398.41 where it would reach equality in length with intermediate wave (3).

Within the final zigzag of intermediate wave (5), minor wave B may not move beyond the start of minor wave A below 1,236.54.

Within the diagonal of primary wave C, each sub-wave is extending in price and so may also do so in time. Within each zigzag, minor wave B may exhibit alternation in structure and may show an increased duration.

Within intermediate wave (1), minor wave B was a triangle lasting 11 days. Within intermediate wave (3), minor wave B was a regular flat lasting 60 days. Within intermediate wave (5), minor wave B may last as long as 40 to 60 days. So far it has lasted 51 days (refer to daily chart) and the structure is incomplete.

At this stage, minor wave B may now be a combination or triangle. These two ideas are separated out in daily and hourly charts below.

This first weekly chart sees the upwards wave labelled primary wave A as a five wave structure. It must be acknowledged that this upwards wave looks better as a three than it does as a five. The fifth weekly chart below will consider the possibility that it was a three.

FIRST DAILY CHART – COMBINATION

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

Minor wave B may be a double combination. Double combinations are very common structures. The first structure in the double may have been a regular flat correction labelled minute wave w.

The double is joined by a three in the opposite direction, a zigzag labelled minute wave x.

The second structure in the double may be a zigzag labelled minute wave y. It would most likely end about the same level as minute wave w, at about 1,303.08, so that the whole structure takes up time and moves price sideways. That is the purpose of double combinations. The target would see minute wave y end somewhat above minute wave w and give the combination a typical sideways look.

Minute wave y as a zigzag now looks like an obvious three wave structure at the daily chart level.

When minute wave y is a complete zigzag, then the probability of the combination being over would be very high. While double combinations are very common structures, triples are extremely rare.

While minute wave y may also be a flat correction, in my experience double flats are fairly rare.

Minute wave y may also be a triangle but the expected pathway at this stage would be the same as the triangle wave count below, so it will not be separated out. A triangle within a combination is also in my experience uncommon.

SECOND DAILY CHART – TRIANGLE

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

This alternate daily chart is identical to the first daily chart up to the high labelled minor wave A. Thereafter, it looks at a different structure for minor wave B.

Minor wave B may be an incomplete triangle, and within it minute wave a may have been a double zigzag. All remaining triangle sub-waves must be simple A-B-C structures, and three of the four remaining sub-waves must be simple zigzags. One remaining sub-wave may be a flat correction.

Minute wave b may be a complete single zigzag. Minute wave c downwards must now complete as a simple correction, very likely a zigzag. Minute wave c of the triangle may not move beyond the end of minute wave a below 1,303.08.

This alternate wave count expects weeks of choppy overlapping movement in an ever decreasing range.

Triangles normally adhere very well to their trend lines. The triangle trend lines are commonly tested within the triangle sub-waves. Minuette wave (b) within minute wave b may have found support at the a-c trend line, and this indicates where minute wave c may end.

Minute wave d of a contracting triangle may not move beyond the end of minute wave b above 1,356.12. Minute wave d of a barrier triangle should end about the same level as minute wave b; the triangle will remain valid as long as the b-d trend line remains essentially flat. In practice, this means minute wave d can end slightly above 1,356.12. This invalidation point is not black and white; it involves an area of subjectivity.

Contracting triangles are the most common type. Barrier triangles are not common, but nor are they rare.

A separate hourly chart will not be published today for this wave count because it would now be exactly the same as the first wave count. Both wave counts expect a zigzag is unfolding lower.

BEARISH ELLIOTT WAVE COUNT

FIFTH WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

There were five weekly charts published in the last historic analysis. This fifth weekly chart is the most immediately bearish wave count, so this is published as a bearish possibility.

This fifth weekly chart sees cycle wave b as a flat correction, and within it intermediate wave (B) may be a complete triple zigzag. This would indicate a regular flat as intermediate wave (B) is less than 1.05 the length of intermediate wave (A).

If cycle wave b is a flat correction, then within it primary wave B must retrace a minimum 0.9 length of primary wave A at 1,079.13 or below. The most common length of B waves within flats is from 1 to 1.38 times the length of the A wave. The target calculated would see primary wave B end within this range.

I have only seen two triple zigzags before during my 10 years of daily Elliott wave analysis. If this wave count turns out to be correct, this would be the third. The rarity of this structure is identified on the chart.

FIFTH DAILY CHART

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

Minor wave 1 may have been a relatively brief impulse over at the low of the 8th of February. Thereafter, minor wave 2 may be an incomplete double combination.

The first structure in the double may be a zigzag labelled minute wave w. The double may be joined by a three in the opposite direction, a zigzag labelled minute wave x. The second structure in the double may be an incomplete triangle labelled minute wave y. This structure may yet take some weeks to complete. In my experience a double combination with a triangle for minute wave y is not very common. This reduces the probability of this wave count, but it remains valid.

This wave count is a good solution for this bearish wave count. All subdivisions fit and there are no rare structures.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Gold is within a small consolidation with resistance about 1,365 to (final) 1,375 and strong support about 1,310 to 1,305. Volume suggests an upwards breakout is more likely than downwards.

The bullish signal this week from On Balance Volume is weak because the purple line, which has been breached, has a reasonable slope and was only tested twice prior.

DAILY CHART

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Gold is within a smaller consolidation that began back on about the 3rd of January. This consolidation is delineated by resistance about 1,360 to 1,365 and support about 1,310 to 1,305. It is the upwards day of the 15th of January that has strongest volume during this consolidation. This suggests an upwards breakout may be more likely than downwards.

For the short term, a long lower wick and support from volume for Friday suggest an upwards day on Monday.

A new small range is drawn on On Balance Volume, but it does not yet have reasonable technical significance and a signal here would be weak only. The next trend lines to be reached offer some more significance.

GDX WEEKLY CHART

GDX Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Support about 20.80 has been tested about eight times and so far has held. The more often a support area is tested and holds, the more technical significance it has.

In the first instance, expect this area to continue to provide support. Only a strong downwards day, closing below support and preferably with some increase in volume, would constitute a downwards breakout from the consolidation that GDX has been in for a year now.

Resistance is about 25.50. Only a strong upwards day, closing above resistance and with support from volume, would constitute an upwards breakout.

The last week closes with the balance of volume upwards, and it shows a decline. This is contradicted by a bullish signal from On Balance Volume this week as it bounces up off support.

GDX DAILY CHART

GDX Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

GDX is range bound at both weekly and daily time frames. The smaller consolidation here has resistance now about 22.50 and support about 21.30 and 20.90.

On Balance Volume is also constrained.

A symmetrical triangle may be forming. A breakout would require a close above resistance or below support, preferably with support from volume. A target for the next trend may be calculated after a breakout.

The very short term volume profile remains bullish.

US OIL

Downwards movement continued this week exactly as expected.

Summary: The target for a new low remains at 13.39. A new low on the way down, below 55.24, would add substantial confidence in a bearish outlook. At least for the short term classic technical analysis expects downwards movement for another week or so.

A new high above 66.65 would substantially reduce the probability of the bearish wave count and increase the probability of a huge new bull market for Oil, which would have final confidence above 74.96.

Always practice good risk management as the most important aspect of trading. Always trade with stops and invest only 1-5% of equity on any one trade. Failure to manage risk is the most common mistake new traders make.

MAIN WAVE COUNT

MONTHLY CHART

US Oil Elliott Wave Chart Monthly 2018
Click chart to enlarge.

Within the bear market, cycle wave b is seen as ending in May 2011. Thereafter, a five wave structure downwards for cycle wave c begins.

Primary wave 1 is a short impulse lasting five months. Primary wave 2 is a very deep 0.94 zigzag lasting 22 months. Primary wave 3 is a complete impulse with no Fibonacci ratio to primary wave 1. It lasted 30 months.

There is alternation in depth with primary wave 2 very deep and primary wave 4 relatively shallow. There is inadequate alternation in structure, both are zigzags. So far primary wave 4 has lasted 23 months. At this stage, there is almost perfect proportion between primary waves 2 and 4.

Primary wave 4 may not move into primary wave 1 price territory above 74.96.

The wider Elliott channel (teal) about this whole movement may offer support to primary wave 5.

WEEKLY CHART

US Oil Elliott Wave Chart Weekly 2018
Click chart to enlarge.

Primary wave 4 subdivides as a zigzag, and for this wave count it should now be complete. There is almost no room for it to move into. If primary wave 5 were to only reach equality in length with primary wave 3, it would end with a small truncation. A target for primary wave 5 may best be calculated at intermediate degree. That can only be done when intermediate waves (1) through to (4) within primary wave 5 are complete.

For now a target will be calculated at primary degree using a ratio between primary waves 3 and 5. This target only has a small probability. This target will be recalculated as primary wave 5 nears its end, so it may change.

An Elliott channel is added to this possible zigzag for primary wave 4. A breach of the lower edge of this channel would provide a very strong indication that primary wave 4 should be over and primary wave 5 should be underway. Look out for some support on the way down, perhaps a short term bounce about the lower edge of the channel.

DAILY CHART

US Oil Elliott Wave Chart Daily 2018
Click chart to enlarge.

Minor wave 1 will subdivide as a complete impulse at lower time frames.

Minor wave 2 should now be a complete structure. It subdivides well as a double zigzag.

A target is calculated for minor wave 3 which expects the most common Fibonacci ratio to minor wave 1. If price reaches down to this target and the structure is incomplete or price keeps falling through it, then the next Fibonacci ratio in the sequence of 2.618 would be used to calculate a new target.

Within minor wave 3, no second wave correction may move beyond the start of its first wave above 66.54.

There may now be two overlapping first and second waves complete within minute wave i. This expects to see an increase in downwards momentum next week.

A new low below 55.24 would invalidate the bullish alternate below and provide reasonable confidence in this main wave count.

ALTERNATE WAVE COUNT

MONTHLY CHART

US Oil Elliott Wave Chart Monthly 2018
Click chart to enlarge.

It is possible that the bear market for Oil is over and a new bull market is in the very early stages.

A huge zigzag down to the last low may be complete and is labelled here Super Cycle wave (II).

Cycle wave b must be seen as complete in August 2013 for this wave count to work. It cannot be seen as complete at the prior major swing high in May 2011.

Cycle wave b is seen as a zigzag, and within it primary wave B is seen as a running contracting triangle. These are fairly common structures, although nine wave triangles are uncommon. All subdivisions fit.

Primary wave C moves beyond the end of primary wave A, so it avoids a truncation. But it does not have to move above the price territory of primary wave B to avoid a truncation, which is an important distinction.

If cycle wave b begins there, then cycle wave c may be seen as a complete five wave impulse.

Super Cycle wave (III) must move beyond the end of Super Cycle wave (I). It must move far enough above that point to allow room for a subsequent Super Cycle wave (IV) to unfold and remain above Super Cycle wave (I) price territory.

WEEKLY CHART

US Oil Elliott Wave Chart Weekly 2018
Click chart to enlarge.

If a new bull market is in the very early stages for Oil, then it may have begun with two overlapping first and second waves at primary then at intermediate degree.

Primary wave 3 may only subdivide as an impulse, and within it intermediate wave (3) may be complete.

Intermediate wave (4) may not move into intermediate wave (1) price territory below 55.24. Intermediate wave (4) would most likely be incomplete. It may continue further sideways or lower.

Intermediate wave (2) is labelled as a double zigzag. To exhibit alternation intermediate wave (4) may most likely be a flat, combination or triangle. Intermediate wave (2) lasted 17 weeks. For good proportion and the right look, intermediate wave (4) may last a Fibonacci 13 or even 21 weeks in total. So far it has lasted only ten weeks.

DAILY CHART

US Oil Elliott Wave Chart Daily 2018
Click chart to enlarge.

It would be unlikely that intermediate wave (4) would be over a the last low labelled minor wave A. That would be too brief.

If intermediate wave (4) is continuing, then it may be as a flat correction. If minor wave B is now over at 0.99 the length of minor wave A, then intermediate wave (4) may be a regular flat correction. Regular flats normally fit nicely into trend channels. The most likely Fibonacci ratio for minor wave C would be equality in length with minor wave A.

Minor wave C downwards must be a five wave structure.

Within minor wave C, two overlapping first and second waves may now be complete. This wave count also expects to see some increase in downwards momentum next week as the middle of a third wave down unfolds. Within the middle of the third wave, no second wave correction may move beyond its start above 64.12.

TECHNICAL ANALYSIS

MONTHLY CHART

US Oil Chart Monthly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

The strongest recent monthly volume is for the downwards month of August 2017. This is bearish.

For the last three months all now complete, the volume profile is bullish.

This chart is overwhelmingly bullish. It supports the alternate Elliott wave count.

DAILY CHART

US Oil Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Oil is at support here about 61.85. The strong bearish candlestick for Friday along with support from volume indicates more downwards movement next week. This supports the short term expectation for both Elliott wave counts.

Watch On Balance Volume carefully next week. A breakout from the new small range would provide a signal.

Oil and $OVX Volatility Index currently have a positive correlation. There is a view within the trading community that they should have a negative correlation, and that any divergence may be a signal. At this time, that relationship is absent and $OVX is not providing signals, so it will not be used in this analysis at this time.

This analysis was previously posted on Elliott Wave Gold.

Lara’s Weekly Elliott Wave and Technical Analysis of S&P500 and Gold and US Oil – 29th March, 2018

Lara’s Weekly is an end of week Elliott Wave and Technical Analysis of the S&P 500, GOLD, and USOIL that focuses on the mid-to-long-term picture. This analysis service is designed for investors and swing traders.

Lara’s Weekly is at this time available to the general public, but in the near future it will be available by subscription only. I will be offering a once only awesome Grandfather rate to the earliest subscribers when Lara’s Weekly is launched as a paid subscription service. To make sure you don’t miss out and not get the Grandfather rate, be notified: click on the Notify Me button below:


Lara's Weekly Masthead

S&P 500

The main wave count expected upwards movement, which is exactly how the short trading week has ended. The target remains the same.

Summary: The target for upwards movement is now 2,737. A new high above 2,674.78 would add confidence in an upwards swing. A bullish signal today from the both AD line and inverted VIX supports this. Price has again bounced up off support at both a trend line and the 200 day moving average. Expect support to hold until it is breached.

A new low below 2,585.89 would indicate downwards movement has one more low before it is done, and the target would be at 2,561 or 2,521. Bearish On Balance Volume supports this view.

Always practice good risk management. Always trade with stops and invest only 1-5% of equity on any one trade.

The biggest picture, Grand Super Cycle analysis, is here.

Last historic analysis with monthly charts is here. Video is here.

An alternate idea at the monthly chart level is given here at the end of this analysis.

An historic example of a cycle degree fifth wave is given at the end of the analysis here.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART

S&P 500 Weekly 2018
Click chart to enlarge.

Cycle wave V must complete as a five structure, which should look clear at the weekly chart level. It may only be an impulse or ending diagonal. At this stage, it is clear it is an impulse.

Within cycle wave V, the third waves at all degrees may only subdivide as impulses.

Intermediate wave (4) has breached an Elliott channel drawn using Elliott’s first technique. The channel is redrawn using Elliott’s second technique as if intermediate wave (4) was over at the first swing low within it. If intermediate wave (4) continues sideways, then the channel may be redrawn when it is over. The upper edge may provide resistance for intermediate wave (5).

Intermediate wave (4) may not move into intermediate wave (1) price territory below 2,193.81. However, it would be extremely likely to remain within the wider teal channel (copied over from the monthly chart) if it were to be reasonably deep. This channel contains the entire bull market since the low in March 2009, with only two small overshoots at the end of cycle wave IV. If this channel is breached, then the idea of cycle wave V continuing higher would be discarded well before the invalidation point is breached.

At this stage, it now looks like intermediate wave (4) may be continuing further sideways as a combination, triangle or flat. These three ideas are separated into separate daily charts. All three ideas would see intermediate wave (4) exhibit alternation in structure with the double zigzag of intermediate wave (2).

A double zigzag would also be possible for intermediate wave (4), but because intermediate wave (2) was a double zigzag this is the least likely structure for intermediate wave (4) to be. Alternation should be expected until price proves otherwise.

DAILY CHART – TRIANGLE

S&P 500 Daily 2018
Click chart to enlarge.

This first daily chart looks at a triangle structure for intermediate wave (4). The triangle may be either a regular contracting or regular barrier triangle. Within the triangle, minor waves A, B and now C may be complete.

If intermediate wave (4) is a regular contracting triangle, the most common type, then minor wave D may not move beyond the end of minor wave B above 2,801.90. Minor wave D would be very likely to end about 0.80 to 0.85 the length of minor wave C.

If intermediate wave (4) is a regular barrier triangle, then minor wave D may end about the same level as minor wave B at 2,801.90. As long as the B-D trend line remains essentially flat a triangle will remain valid. In practice, this means the minor wave D can end slightly above 2,801.90 as this rule is subjective.

When a zigzag upwards for minor wave D is complete, then this wave count would expect a final smaller zigzag downwards for minor wave E, which would most likely fall reasonably short of the A-C trend line.

If this all takes a further four weeks to complete, then intermediate wave (4) may total a Fibonacci 13 weeks and would be just two weeks longer in duration than intermediate wave (2). There would be very good proportion between intermediate waves (2) and (4), which would give the wave count the right look.

The low yesterday has found support right on the A-C trend line. Triangles normally adhere well to their trend lines, and it is common for the trend lines to be tested within triangle sub-waves. This has a typical look.

It is possible that minor wave C is over as per the labelling on this daily chart and the first hourly chart below, but it is also possible that it could continue lower. An alternate hourly chart covers that possibility.

The best fit channel about minor wave C is redrawn to be as conservative as possible. It is copied over to the alternate hourly chart below.

HOURLY CHART

S&P 500 Hourly 2018
Click chart to enlarge.

Minor wave D within a triangle should subdivide into a simple A-B-C corrective structure, most likely a simple zigzag.

Some confidence in this wave count at the hourly chart level may be had if price makes a new high above 2,674.78.

Minute wave c must subdivide as a five wave structure. Because upwards movement for Thursday does not have support from volume it looks unlikely that minuette wave (iii) was over at Friday’s high. Minuette wave (iii) may be incomplete. It should be expected to exhibit an increase in upwards momentum and have some support from volume.

Within minuette wave (iii), subminuette wave i may be over at Thursday’s high. Subminuette wave ii may be more brief and shallow than a typical second wave due to an upwards pull from the middle of a third wave. Subminuette wave ii may not move beyond the start of subminuette wave i below 2,597.18.

Price has found support now three times at the A-C trend line. If this wave count is correct, then support there should hold.

ALTERNATE HOURLY CHART

S&P 500 Hourly 2018
Click chart to enlarge.

It is also possible that the second zigzag in the double for minor wave C is incomplete.

If the zigzag of minute wave y is continuing, then within it minuette wave (b) must be seen as an expanded flat correction (all subdivisions will fit at the five minute chart level). The problem here though is the length of subminuette wave b within the expanded flat. While there is no rule stating a limit for B waves within flats, there is a convention that states when the B wave is more than twice the length of the A wave the probability of a flat is extremely low. I have seen a few expanded flats where wave B is longer than twice the length of wave A, but they are uncommon.

The probability of this wave count would be reduced for this reason.

Now the size in both depth and duration of subminuette wave ii further reduces the probability of this wave count. It no longer has reasonable looking proportions.

Subminuette wave ii may not move beyond the start of subminuette wave i above 2,674.78.

If price makes a new low below 2,585.89, then the target for the triangle wave count would be at 2,561. This would expect the most common Fibonacci ratio between minuette waves (a) and (c).

DAILY CHART – COMBINATION

S&P 500 Daily 2018
Click chart to enlarge.

Double combinations are very common structures. The first structure in a possible double combination for intermediate wave (4) would be a complete zigzag labelled minor wave W. The double should be joined by a three in the opposite direction labelled minor wave X, which may be a complete zigzag. X waves within combinations are typically very deep; if minor wave X is over at the last high, then it would be a 0.79 length of minor wave W, which is fairly deep giving it a normal look. There is no minimum nor maximum requirement for X waves within combinations.

The second structure in the double would most likely be a flat correction labelled minor wave Y. It may also be a triangle, but in my experience this is very rare, so it will not be expected. The much more common flat for minor wave Y will be charted and expected.

A flat correction would subdivide 3-3-5. Minute wave a must be a three wave structure, most likely a zigzag. It may also be a double zigzag. On the hourly chart, this is now how this downwards movement fits best, and this will now be how it is labelled.

Minute wave b must now reach a minimum 0.90 length of minute wave a. Minute wave b must be a corrective structure. It may be any corrective structure.

The purpose of combinations is to take up time and move price sideways. To achieve this purpose the second structure in the double usually ends close to the same level as the first. Minor wave Y would be expected to end about the same level as minor wave W at 2,532.69. This would require a strong overshoot or breach of the 200 day moving average, which looks unlikely.

DAILY CHART – COMBINATION II

S&P 500 Daily 2018
Click chart to enlarge.

This is another way to label the combination.

Minor wave W is still a zigzag labelled in the same way, over at the first low within intermediate wave (4).

The double is joined by a quick three in the opposite direction labelled minor wave X, subdividing as a zigzag.

Minor wave Y may have begun earlier and may be an almost complete expanded flat correction, and within it minute wave a is a three, itself an expanded flat. Minute wave b is a zigzag and only slightly longer than the most common length of up to 1.38 times the length of minute wave a. Minute wave c downwards must be a five wave structure. It may need a final fifth wave to complete it.

Within minuette wave (v), no second wave correction may move beyond its start above 2,674.78.

The target would see minor wave Y end only slightly below the end of minor wave W. The whole structure for the double combination would move sideways. This wave count would also require a substantial breach of the 200 day moving average (at this point about 68 points). This looks unlikely but is discussed as a possibility in the classic technical analysis section below.

HOURLY CHART – COMBINATION II

S&P 500 Hourly 2018
Click chart to enlarge.

The Elliott channel is drawn using Elliott’s second technique for an impulse. If an impulse downwards is incomplete, then within minuette wave (v) upwards corrections should find strong resistance at the upper edge of the channel. That channel should not be breached.

The fact that the end of Thursday’s session has breached the channel indicates this wave count may be wrong. It has substantially reduced in probability.

If subminuette wave ii continues higher, it may not move beyond the start of subminuette wave i above 2,674.78.

DAILY CHART – FLAT

S&P 500 Daily 2018
Click chart to enlarge.

Flat corrections are very common. The most common type of flat is an expanded flat. This would see minor wave B move above the start of minor wave A at 2,872.87.

Within a flat correction, minor wave B must retrace a minimum 0.9 length of minor wave A at 2,838.85. The most common length for minor wave B within a flat correction would be 1 to 1.38 times the length of minor wave A at 2,872.87 to 3,002.15. An expanded flat would see minor wave B 1.05 times the length of minor wave A or longer, at 2,889.89 or above.

Minor wave B may be an incomplete zigzag, and within it minute wave c upwards must now subdivide as a five wave structure. How high minor wave B goes would indicate for this wave count what type of flat correction may be unfolding for intermediate wave (4).

It is also possible for this wave count that minute wave b may not be complete and may move lower.

When minor wave B is a complete corrective structure ending at or above the minimum requirement, then minor wave C downwards would be expected to make a new low below the end of minor wave A at 2,532.69 to avoid a truncation.

This wave count would require a very substantial breach of the 200 day moving average for the end of intermediate wave (4). This is possible but may be less likely than a smaller breach. Support at the 200 day average at this stage continues to hold and should be expected to do so until price breaks it.

DAILY CHART – ALTERNATE

S&P 500 Daily 2018
Click chart to enlarge.

It is possible still that intermediate wave (4) was complete as a relatively brief and shallow single zigzag.

A new all time high with support from volume and any one of a bullish signal from On Balance Volume or the AD line would see this alternate wave count become the main wave count.

The target for minor wave 3 expects the most common Fibonacci ratio to minor wave 1.

It now looks more likely that for this alternate wave count minor wave 2 should be over. Within minor wave 3, no second wave correction may move beyond the start of its first wave below 2,585.89.

TECHNICAL ANALYSIS

WEEKLY CHART

S&P 500 weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Although volume this week is lighter than last two downwards weeks, this is only of slight concern. Light and declining volume has long been a feature of this bull market. It does not appear to be causing the bull market to be unsustainable, yet.

Give reasonable weight to the bullish signal from On Balance Volume, although it has not perfectly touched the support line.

It is a reasonable approach to expect the 200 day / 40 week moving average to continue to provide strong support while price is above it.

DAILY CHART

S&P 500 daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Look out for resistance at the breakaway gap at 2,709.79. The yellow line on On Balance Volume may also provide resistance, but it allows for some more upwards movement first.

Lighter volume for Thursday with a long upper candlestick wick suggest a pullback on Monday may unfold. There is support just below about 2,600.

VOLATILITY – INVERTED VIX CHART

VIX daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

So that colour blind members are included, bearish signals will be noted with blue and bullish signals with yellow.

Normally, volatility should decline as price moves higher and increase as price moves lower. This means that normally inverted VIX should move in the same direction as price.

Thursday’s new small swing high has made a new high in inverted VIX but not yet in price. This divergence is read as bullish, if inverted VIX is a leading indicator.

BREADTH – AD LINE

AD Line daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

There is normally 4-6 months divergence between price and market breadth prior to a full fledged bear market. This has been so for all major bear markets within the last 90 odd years. With no longer term divergence yet at this point, any decline in price should be expected to be a pullback within an ongoing bull market and not necessarily the start of a bear market.

All of small, mid and large caps last week fell strongly. The fall in price has broad support from market breadth. It was small caps though that had the least decline. This slight divergence indicates some weakness and may be interpreted as slightly bullish.

Breadth should be read as a leading indicator.

Thursday’s small new swing high in the AD line has not seen a corresponding new swing high in price. This is read as bullish divergence.

DOW THEORY

All indices have made new all time highs as recently as nine weeks ago, confirming the ongoing bull market.

The following lows need to be exceeded for Dow Theory to confirm the end of the bull market and a change to a bear market:

DJIA: 17,883.56.

DJT: 7,039.41.

S&P500: 2,083.79.

Nasdaq: 5,034.41.

Charts showing each prior major swing low used for Dow Theory are here.

GOLD

Downwards movement has continued a little further as last analysis expected. For the short term, volume and On Balance Volume suggest the direction for Monday and possibly Tuesday as well.

Summary: Expect this downwards swing to continue to support, which is at about 1,310 to 1,305. Do not expect this downwards swing to move in a straight line, because that is not how price behaves within a consolidation. Look out for a bounce Monday and / or Tuesday, and then the continuation of downwards movement.

Only the most experienced of traders should attempt to trade when price is clearly consolidating as it currently is for Gold and GDX. The rest should either hedge or wait for a breakout and trade the next trend. Always use stops and invest only 1-5% of equity on any one trade.

Grand SuperCycle analysis is here.

Last in-depth historic analysis with monthly and several weekly charts is here, video is here.

There are multiple wave counts at this time at the weekly and monthly chart levels. In order to make this analysis manageable and accessible only two will be published on a daily basis, one bullish and one bearish. This does not mean the other possibilities may not be correct, only that publication of them all each day is too much to digest. At this stage, they do not diverge from the two possibilities below.

BULLISH ELLIOTT WAVE COUNT

FIRST WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

Cycle wave b may be a single zigzag. Zigzags subdivide 5-3-5. Primary wave C must subdivide as a five wave structure and may be either an impulse or an ending diagonal. Overlapping at this stage indicates an ending diagonal.

Within an ending diagonal, all sub-waves must subdivide as zigzags. Intermediate wave (4) must overlap into intermediate wave (1) price territory. This diagonal is expanding: intermediate wave (3) is longer than intermediate wave (1) and intermediate wave (4) is longer than intermediate wave (2). Intermediate wave (5) must be longer than intermediate wave (3), so it must end above 1,398.41 where it would reach equality in length with intermediate wave (3).

Within the final zigzag of intermediate wave (5), minor wave B may not move beyond the start of minor wave A below 1,236.54.

Within the diagonal of primary wave C, each sub-wave is extending in price and so may also do so in time. Within each zigzag, minor wave B may exhibit alternation in structure and may show an increased duration.

Within intermediate wave (1), minor wave B was a triangle lasting 11 days. Within intermediate wave (2), minor wave B was a zigzag lasting 2 days. Within intermediate wave (3), minor wave B was a regular flat lasting 60 days. Within intermediate wave (4), minor wave B was a regular contracting triangle lasting 40 days. Within intermediate wave (5), minor wave B may be expected to be an expanded flat, combination or running triangle to exhibit some alternation in structure. It may last as long as 40 to 60 days. So far it has lasted 45 days (refer to daily chart) and the structure is incomplete.

At this stage, minor wave B may now be a combination or triangle. These two ideas are separated out in daily and hourly charts below.

This first weekly chart sees the upwards wave labelled primary wave A as a five wave structure. It must be acknowledged that this upwards wave looks better as a three than it does as a five. The fifth weekly chart below will consider the possibility that it was a three.

FIRST DAILY CHART – COMBINATION

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

Minor wave B may be a double combination. The first structure in the double may have been a regular flat correction labelled minute wave w.

The double is joined by a three in the opposite direction, a zigzag labelled minute wave x.

The second structure in the double may be a zigzag labelled minute wave y. It would most likely end about the same level as minute wave w, at about 1,303.08, so that the whole structure takes up time and moves price sideways. That is the purpose of double combinations.

Minute wave y as a zigzag should look like an obvious three wave structure at the daily chart level. For that to happen minuette wave (b) within it should show up as one or more green daily candlesticks or doji.

When minute wave y is a complete zigzag, then the probability of the combination being over would be very high. While double combinations are very common structures, triples are extremely rare.

While minute wave y may also be a flat correction, in my experience double flats are fairly rare.

Minute wave y may also be a triangle but the expected pathway at this stage would be the same as the triangle wave count below, so it will not be separated out. A triangle within a combination is also in my experience uncommon.

FIRST HOURLY CHART – COMBINATION

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

Both wave counts at the daily chart level today expect that a zigzag downwards is unfolding. Both will now see minuette wave (a) complete at Wednesday’s low. The size in terms of duration of the following upwards and sideways movement looks like a new wave, not part of the last wave down. This looks like minuette wave (b).

There are multiple structural options for minuette wave (b). The two hourly charts published today will consider two different possibilities. They both work in exactly the same way for both daily wave counts.

This first idea looks at minuette wave (b) as a possibly complete triangle. If minuette wave (b) is complete, then it would not have shown up on the daily chart as one or more green daily candlesticks or doji, so this would be less likely.

If minuette wave (b) is over, then a target should be calculated for minuette wave (c).

If minuette wave (b) continues further, then the target must be recalculated. Minuette wave (b) may not move beyond the start of minuette wave (a) above 1,356.01.

SECOND DAILY CHART – TRIANGLE

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

This alternate daily chart is identical to the first daily chart up to the high labelled minor wave A. Thereafter, it looks at a different structure for minor wave B.

Minor wave B may be an incomplete triangle, and within it minute wave a may have been a double zigzag. All remaining triangle sub-waves must be simple A-B-C structures, and three of the four remaining sub-waves must be simple zigzags. One remaining sub-wave may be a flat correction.

Minute wave b may be unfolding upwards as a single zigzag, and within it minuette wave (b) may not move beyond the start of minuette wave (a) below 1,303.08.

This alternate wave count expects weeks of choppy overlapping movement in an ever decreasing range.

Triangles normally adhere very well to their trend lines. The triangle trend lines are commonly tested within the triangle sub-waves. Minuette wave (b) within minute wave b may have found support at the a-c trend line, and this indicates where minute wave c may end.

Minute wave c of the triangle may not move beyond the end of minute wave a below 1,303.08.

Minute wave d of a contracting triangle may not move beyond the end of minute wave b above 1,356.12. Minute wave d of a barrier triangle should end about the same level as minute wave b; the triangle will remain valid as long as the b-d trend line remains essentially flat. In practice, this means minute wave d can end slightly above 1,356.12. This invalidation point is not black and white; it involves an area of subjectivity.

Contracting triangles are the most common type. Barrier triangles are not common, but nor are they rare.

At the daily chart level, for this wave count it would be extremely likely that the zigzag of minute wave c looks like a three wave structure. For that to happen minuette wave (b) within it needs to show up on the daily chart as one or more green daily candlesticks or doji.

SECOND HOURLY CHART – TRIANGLE

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

Minuette wave (b) may be an incomplete zigzag. Within the zigzag, subminuette waves a and b may be over. Subminuette wave c may move higher, to bring minuette wave (b) up to either the 0.382 or 0.618 Fibonacci ratios. Neither may be favoured.

This second hourly chart has support today from classic technical analysis.

BEARISH ELLIOTT WAVE COUNT

FIFTH WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

There were five weekly charts published in the last historic analysis. This fifth weekly chart is the most immediately bearish wave count, so this is published as a bearish possibility.

This fifth weekly chart sees cycle wave b as a flat correction, and within it intermediate wave (B) may be a complete triple zigzag. This would indicate a regular flat as intermediate wave (B) is less than 1.05 the length of intermediate wave (A).

If cycle wave b is a flat correction, then within it primary wave B must retrace a minimum 0.9 length of primary wave A at 1,079.13 or below. The most common length of B waves within flats is from 1 to 1.38 times the length of the A wave. The target calculated would see primary wave B end within this range.

I have only seen two triple zigzags before during my 10 years of daily Elliott wave analysis. If this wave count turns out to be correct, this would be the third. The rarity of this structure is identified on the chart.

It is very difficult now at the daily chart level to see a five down followed by a corrective structure complete. This wave count has reduced in probability this week.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

A longer upper wick is bearish, but a lack of support from volume is slightly bullish. However, price can fall of its own weight. For downwards movement to be sustained for a little longer support from volume is not necessary.

A new resistance line is drawn on On Balance Volume this week.

DAILY CHART

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Looking at the bigger picture, Gold has been within a large consolidation since about January 2017 (this chart does not show all of this large consolidation), and during this consolidation it is two upwards days that have strongest volume and an upwards week that has strongest volume. Volume suggests an upwards breakout may be more likely than downwards.

Currently, Gold is within a smaller consolidation that began in early January 2018. This consolidation is delineated by support about 1,310 to 1,305 and resistance about 1,360 – 1,365. It is an upwards day during this smaller consolidation that has strongest volume, suggesting an upwards breakout may be more likely here than downwards.

For the short term, a bounce may be expected here. On Balance Volume is at support and Thursday’s downwards movement lacks support from volume.

GDX WEEKLY CHART

GDX Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Support about 20.80 has been tested about eight times and so far has held. The more often a support area is tested and holds, the more technical significance it has.

In the first instance, expect this area to continue to provide support. Only a strong downwards day, closing below support and preferably with some increase in volume, would constitute a downwards breakout from the consolidation that GDX has been in for a year now.

Resistance is about 25.50. Only a strong upwards day, closing above resistance and with support from volume, would constitute an upwards breakout.

With On Balance Volume again at support look for upwards movement next week. Downwards movement during this week lacks support from volume.

GDX DAILY CHART

GDX Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

GDX is range bound at both weekly and daily time frames. The smaller consolidation here has resistance now about 22.50 and support about 21.30 and 20.90.

During this consolidation, Stochastics is not reaching oversold and overbought. Look for a downwards swing to continue here until On Balance Volume finds support, price finds support, and Stochastics nears oversold (but may not reach it).

US OIL

A turn was expected. Price has remained just below the invalidation point and printed a red weekly candlestick.

Summary: Price must continue lower here for the main Elliott wave count. A new high above 66.65 would substantially reduce the probability of the bearish wave count and increase the probability of a huge new bull market for Oil, which would have final confidence above 74.96.

Classic technical analysis this week still favours a bullish outlook for the bigger picture, but it supports the view here that price may move lower for a week or so.

If price turns lower here, then the target for a new low remains at 13.39. A new low on the way down, below 55.24, would add substantial confidence in a bearish outlook.

Always practice good risk management as the most important aspect of trading. Always trade with stops and invest only 1-5% of equity on any one trade. Failure to manage risk is the most common mistake new traders make.

MAIN WAVE COUNT

MONTHLY CHART

US Oil Elliott Wave Chart Monthly 2018
Click chart to enlarge.

Within the bear market, cycle wave b is seen as ending in May 2011. Thereafter, a five wave structure downwards for cycle wave c begins.

Primary wave 1 is a short impulse lasting five months. Primary wave 2 is a very deep 0.94 zigzag lasting 22 months. Primary wave 3 is a complete impulse with no Fibonacci ratio to primary wave 1. It lasted 30 months.

There is alternation in depth with primary wave 2 very deep and primary wave 4 relatively shallow. There is inadequate alternation in structure, both are zigzags. So far primary wave 4 has lasted 23 months. At this stage, there is almost perfect proportion between primary waves 2 and 4.

Primary wave 4 may not move into primary wave 1 price territory above 74.96.

The wider Elliott channel (teal) about this whole movement may offer support to primary wave 5.

WEEKLY CHART

US Oil Elliott Wave Chart Weekly 2018
Click chart to enlarge.

Primary wave 4 subdivides as a zigzag, and within it intermediate wave (C) may now be complete. If primary wave 5 were to only reach equality in length with primary wave 3, it would end with a small truncation. A target for primary wave 5 may best be calculated at intermediate degree. That can only be done when intermediate waves (1) through to (4) within primary wave 5 are complete.

For now a target will be calculated at primary degree using a ratio between primary waves 3 and 5. This target only has a small probability. This target will be recalculated as primary wave 5 nears its end, so it may change.

An Elliott channel is added to this possible zigzag for primary wave 4. A breach of the lower edge of this channel would provide a very strong indication that primary wave 4 should be over and primary wave 5 should be underway. Look out for some support on the way down, perhaps a short term bounce about the lower edge of the channel.

DAILY CHART

US Oil Elliott Wave Chart Daily 2018
Click chart to enlarge.

Minor wave 1 will subdivide as a complete impulse at lower time frames.

Minor wave 2 looks like a double zigzag. The first structure in the double zigzag is labelled minute wave w. The double is joined by a three in the opposite direction, an expanded flat labelled minute wave x. The second zigzag in the double has deepened the correction achieving its purpose, and it is labelled a zigzag for minute wave y.

There is now almost no room left for this wave count to move into. Minor wave 2 must end here and minor wave 3 downwards must have begun last week if this wave count is correct.

A target is calculated for minor wave 3 which expects the most common Fibonacci ratio to minor wave 1. If price reaches down to this target and the structure is incomplete or price keeps falling through it, then the next Fibonacci ratio in the sequence of 2.618 would be used to calculate a new target.

Minor wave 2 may not move beyond the start of minor wave 1 above 66.65.

A new low below 55.24 would invalidate the bullish alternate below and provide reasonable confidence in this main wave count.

Price has moved slightly below the yellow best fit channel, but the channel is not properly breached by downwards movement. I classify a breach by a full daily candlestick below and not touching the channel. This wave count will be in doubt while the channel is not breached.

Again, this week’s classic analysis supports the alternate wave count and does not support this main wave count.

ALTERNATE WAVE COUNT

MONTHLY CHART

US Oil Elliott Wave Chart Monthly 2018
Click chart to enlarge.

It is possible that the bear market for Oil is over and a new bull market is in the very early stages.

A huge zigzag down to the last low may be complete and is labelled here Super Cycle wave (II).

Cycle wave b must be seen as complete in August 2013 for this wave count to work. It cannot be seen as complete at the prior major swing high in May 2011.

Cycle wave b is seen as a zigzag, and within it primary wave B is seen as a running contracting triangle. These are fairly common structures, although nine wave triangles are uncommon. All subdivisions fit.

Primary wave C moves beyond the end of primary wave A, so it avoids a truncation. But it does not have to move above the price territory of primary wave B to avoid a truncation, which is an important distinction.

If cycle wave b begins there, then cycle wave c may be seen as a complete five wave impulse.

Super Cycle wave (III) must move beyond the end of Super Cycle wave (I). It must move far enough above that point to allow room for a subsequent Super Cycle wave (IV) to unfold and remain above Super Cycle wave (I) price territory.

WEEKLY CHART

US Oil Elliott Wave Chart Weekly 2018
Click chart to enlarge.

If a new bull market is in the very early stages for Oil, then it may have begun with two overlapping first and second waves at primary then at intermediate degree.

Primary wave 3 may only subdivide as an impulse, and within it intermediate wave (3) may be complete.

Intermediate wave (4) may not move into intermediate wave (1) price territory below 55.24. Intermediate wave (4) would most likely be incomplete. It may continue further sideways or lower.

Intermediate wave (2) is labelled as a double zigzag. To exhibit alternation intermediate wave (4) may most likely be a flat, combination or triangle. Intermediate wave (2) lasted 17 weeks. For good proportion and the right look, intermediate wave (4) may last a Fibonacci 13 or even 21 weeks in total. So far it has lasted only nine weeks.

DAILY CHART

US Oil Elliott Wave Chart Daily 2018
Click chart to enlarge.

It would be unlikely that intermediate wave (4) would be over a the last low labelled minor wave A. That would be too brief.

If intermediate wave (4) is continuing, then it may be as a flat correction. If minor wave B is now over at 0.99 the length of minor wave A, then intermediate wave (4) may be a regular flat correction. Regular flats normally fit nicely into trend channels. The most likely Fibonacci ratio for minor wave C would be equality in length with minor wave A.

Minor wave C downwards must be a five wave structure.

It is possible that minor wave B could continue higher. No upper invalidation point may yet be used for this wave count.

TECHNICAL ANALYSIS

MONTHLY CHART

US Oil Chart Monthly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

The strongest recent monthly volume is for the downwards month of August 2017. This is bearish.

For the last three months all now complete, the volume profile is bullish.

This chart is overwhelmingly bullish. It supports the alternate Elliott wave count.

DAILY CHART

US Oil Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

The bullish long lower wicks strongly suggest some upwards movement to start the new trading week. They make no comment on how much or for how long though.

The short term volume profile from last week is bearish. The last two signals from On Balance Volume are bearish. Stochastics is overbought. These all support the short term outlook for both Elliott wave counts, which expect some downwards movement for about three weeks.

Oil and $OVX Volatility Index currently have a positive correlation. There is a view within the trading community that they should have a negative correlation, and that any divergence may be a signal. At this time, that relationship is absent and $OVX is not providing signals, so it will not be used in this analysis at this time.

This analysis was previously posted on Elliott Wave Gold.

Weekly Elliott Wave and Technical Analysis of S&P500 and Gold and US Oil – 23rd March, 2018

Lara’s Weekly is an end of week Elliott Wave and Technical Analysis of the S&P 500, GOLD, and USOIL that focuses on the mid-to-long-term picture. This analysis service is designed for investors and swing traders.

Lara’s Weekly is at this time available to the general public, but in the near future it will be available by subscription only. I will be offering a once only awesome Grandfather rate to the earliest subscribers when Lara’s Weekly is launched as a paid subscription service. To make sure you don’t miss out and not get the Grandfather rate, be notified: click on the Notify Me button below:


Lara's Weekly Masthead

S&P 500

The first target for downwards movement was 2,612, and thereafter the 200 day moving average at 2,584. Price ended very close to the 200 day moving average for the session at 2,588.

Summary: The target for downwards movement to end Monday or Tuesday is 2,565 – 2,566. Thereafter an upwards swing may develop.

Always practice good risk management. Always trade with stops and invest only 1-5% of equity on any one trade.

The biggest picture, Grand Super Cycle analysis, is here.

Last historic analysis with monthly charts is here. Video is here.

An alternate idea at the monthly chart level is given here at the end of this analysis.

An historic example of a cycle degree fifth wave is given at the end of the analysis here.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART

S&P 500 Weekly 2018
Click chart to enlarge.

Cycle wave V must complete as a five structure, which should look clear at the weekly chart level. It may only be an impulse or ending diagonal. At this stage, it is clear it is an impulse.

Within cycle wave V, the third waves at all degrees may only subdivide as impulses.

Intermediate wave (4) has breached an Elliott channel drawn using Elliott’s first technique. The channel is redrawn using Elliott’s second technique as if intermediate wave (4) was over at the last low. If intermediate wave (4) continues sideways, then the channel may be redrawn when it is over. The upper edge may provide resistance for intermediate wave (5).

Intermediate wave (4) may not move into intermediate wave (1) price territory below 2,193.81. At this stage, it now looks like intermediate wave (4) may be continuing further sideways as a combination, triangle or flat. These three ideas are separated into separate daily charts. All three ideas would see intermediate wave (4) exhibit alternation in structure with the double zigzag of intermediate wave (2).

A double zigzag would also be possible for intermediate wave (4), but because intermediate wave (2) was a double zigzag this is the least likely structure for intermediate wave (4) to be. Alternation should be expected until price proves otherwise.

DAILY CHART – TRIANGLE

S&P 500 Daily 2018
Click chart to enlarge.

This first daily chart outlines how intermediate wave (4) may now continue further sideways as a contracting or barrier triangle. It is possible that minor wave B within the triangle was over at the last high, which would mean the triangle would be a regular triangle. Minor wave C downwards may now be underway and may be a single or double zigzag. One of the five sub-waves of a triangle is usually a more complicated multiple, and the most common sub-wave to do this is wave C. It looks like minor wave C may be unfolding as a double zigzag, at this stage, and this is how it will be labelled. Within the double zigzag, minute wave x should not make a new high above the start of minute wave w at 2,801.90.

Minor wave C may not make a new low below the end of minor wave A at 2,532.69.

The new target calculated today at the hourly chart level would see both the 200 day moving average and the lower black trend line overshot. This would be acceptable.

Intermediate wave 2 lasted 11 weeks. If intermediate wave (4) is incomplete, then it would have so far lasted only eight weeks. Triangles tend to be very time consuming structures, so intermediate wave (4) may total a Fibonacci 13 or even 21 weeks at its conclusion.

Because this is the only daily chart which expects price to continue to find support about the 200 day moving average, it is presented first; it may have a slightly higher probability than the next two daily charts.

HOURLY CHART

S&P 500 Hourly 2018
Click chart to enlarge.

A double zigzag may be close to completion.

Within the second zigzag, minuette wave (c) has passed equality in length with minuette wave (a). The next Fibonacci ratio in the sequence is used to calculate a new target. This is just one point off a target calculated at minute degree.

Minuette wave (c) must subdivide as a five wave structure. So far the middle portion may be complete at Friday’s low, or very close to completion. There should be too more small intraday corrections along the way down to the target: the first for micro wave 4 and the next for subminuette wave iv.

Micro wave 4 may not move into micro wave 1 price territory above 2,625.22.

When subminuette wave iii is complete, then subminuette wave iv may not move into subminuette wave i price territory above 2,639.97.

The best fit channel is drawn with the first trend line from the low of subminuette wave i within minute wave w, then to the last low. A parallel copy is placed upon the high of minute wave x. Keep redrawing the channel as price moves lower (it is essentially an adjusted acceleration channel). When minor wave C is complete, a breach of the channel by upwards movement would indicate confidence in a low in place and a trend change.

For the very short term, a new high above 2,625.22 without any downwards movement first would indicate a low may be in place, and my analysis of this downwards wave would then be wrong.

DAILY CHART – COMBINATION

S&P 500 Daily 2018
Click chart to enlarge.

Double combinations are very common structures. The first structure in a possible double combination for intermediate wave (4) would be a complete zigzag labelled minor wave W. The double should be joined by a three in the opposite direction labelled minor wave X, which may be a complete zigzag. X waves within combinations are typically very deep; if minor wave X is over at the last high, then it would be a 0.79 length of minor wave W, which is fairly deep giving it a normal look. There is no minimum nor maximum requirement for X waves within combinations.

The second structure in the double would most likely be a flat correction labelled minor wave Y. It may also be a triangle, but in my experience this is very rare.

A flat correction would subdivide 3-3-5. Minute wave a must be a three wave structure, most likely a zigzag. It may also be a double zigzag. On the hourly chart, this is now how this downwards movement fits best, and this will now be how it is labelled.

The purpose of combinations is to take up time and move price sideways. To achieve this purpose the second structure in the double usually ends close to the same level as the first. Minor wave Y would be expected to end about the same level as minor wave W at 2,532.69. This would require a strong overshoot or breach of the 200 day moving average, which looks unlikely.

HOURLY CHART – COMBINATION

S&P 500 Hourly 2018
Click chart to enlarge.

The target, channel and subdivisions for this idea are exactly the same as the first hourly chart. Both daily charts expect a double zigzag is unfolding lower.

DAILY CHART – FLAT

S&P 500 Daily 2018
Click chart to enlarge.

Flat corrections are very common. The most common type of flat is an expanded flat. This would see minor wave B move above the start of minor wave A at 2,872.87.

Within a flat correction, minor wave B must retrace a minimum 0.9 length of minor wave A at 2,838.85. The most common length for minor wave B within a flat correction would be 1 to 1.38 times the length of minor wave A at 2,872.87 to 3,002.15. An expanded flat would see minor wave B 1.05 times the length of minor wave A or longer, at 2,889.89 or above.

When minor wave B is a complete corrective structure ending at or above the minimum requirement, then minor wave C downwards would be expected to make a new low below the end of minor wave A at 2,532.69 to avoid a truncation.

Minor wave B may be continuing higher as a double zigzag. At this stage, this would be the most likely structure to achieve the height required for minor wave B.

This wave count remains valid. Minor wave B is again relabelled; it may be a time consuming sideways structure that at this time would be incomplete. If minor wave B is itself unfolding as an expanded flat, then within it minute wave b may make a new low below the start of minute wave a at 2,532.69.

This wave count would require a very substantial breach of the 200 day moving average for the end of intermediate wave (4). This looks unlikely.

DAILY CHART – ALTERNATE

S&P 500 Daily 2018
Click chart to enlarge.

It is possible still that intermediate wave (4) was complete as a relatively brief and shallow single zigzag.

A new all time high with support from volume and any one of a bullish signal from On Balance Volume or the AD line would see this alternate wave count become the main wave count.

Minor wave 2 may be over at Friday’s low, or it may be over early next week with a little more downwards movement. Minor wave 3 may begin upwards shortly.

Minor wave 2 may not move beyond the start of minor wave 1 below 2,532.69.

TECHNICAL ANALYSIS

WEEKLY CHART

S&P 500 weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Although a slight decline in volume this week and On Balance Volume nearing support indicate downwards movement may end soon, the close very near to the low and the lack of a long lower wick indicate downwards movement is probably not yet done.

DAILY CHART

S&P 500 daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Assume until proven otherwise that the gap at the open of Thurdsay’s session is a breakaway gap from a small consolidation, which may provide resistance while it remains open.

There is no long lower wick nor decline in volume to suggest downwards movement may end here. Expect it to continue lower. It looks like the 200 day moving average may again be overshot.

If a day with a long lower wick develops, or Stochastics or RSI is oversold and then exhibits divergence, a low may then be in place.

VOLATILITY – INVERTED VIX CHART

VIX daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

So that colour blind members are included, bearish signals will be noted with blue and bullish signals with yellow.

Normally, volatility should decline as price moves higher and increase as price moves lower. This means that normally inverted VIX should move in the same direction as price.

Downwards movement for Thursday and Friday has support from a normal increase in volatility. This is bearish.

BREADTH – AD LINE

AD Line daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

There is normally 4-6 months divergence between price and market breadth prior to a full fledged bear market. This has been so for all major bear markets within the last 90 odd years. With no longer term divergence yet at this point, any decline in price should be expected to be a pullback within an ongoing bull market and not necessarily the start of a bear market.

All of small, mid and large caps this week fell strongly. The fall in price has broad support from market breadth. It was small caps though that had the least decline. This slight divergence indicates some weakness and may be interpreted as slightly bullish.

Breadth should be read as a leading indicator.

Downwards movement for Thursday and Friday has support from strongly declining market breadth. This is bearish. There is no divergence.

DOW THEORY

All indices have made new all time highs as recently as nine weeks ago, confirming the ongoing bull market.

The following lows need to be exceeded for Dow Theory to confirm the end of the bull market and a change to a bear market:

DJIA: 17,883.56.

DJT: 7,039.41.

S&P500: 2,083.79.

Nasdaq: 5,034.41.

Charts showing each prior major swing low used for Dow Theory are here.

GOLD

A pullback was expected to end about 1,318 and an upwards swing to resume there, but the pullback was already over and upwards movement continued.

Summary: Look for a little sideways or lower movement to begin the new week, which may end about 1,344. Thereafter, the upwards swing should continue to the target, which remains at 1,367.

Grand SuperCycle analysis is here.

Last in-depth historic analysis with monthly and several weekly charts is here, video is here.

There are multiple wave counts at this time at the weekly and monthly chart levels. In order to make this analysis manageable and accessible only two will be published on a daily basis, one bullish and one bearish. This does not mean the other possibilities may not be correct, only that publication of them all each day is too much to digest. At this stage, they do not diverge from the two possibilities below.

BULLISH ELLIOTT WAVE COUNT

FIRST WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

Cycle wave b may be a single zigzag. Zigzags subdivide 5-3-5. Primary wave C must subdivide as a five wave structure and may be either an impulse or an ending diagonal. Overlapping at this stage indicates an ending diagonal.

Within an ending diagonal, all sub-waves must subdivide as zigzags. Intermediate wave (4) must overlap into intermediate wave (1) price territory. This diagonal is expanding: intermediate wave (3) is longer than intermediate wave (1) and intermediate wave (4) is longer than intermediate wave (2). Intermediate wave (5) must be longer than intermediate wave (3), so it must end above 1,398.41 where it would reach equality in length with intermediate wave (3).

Within the final zigzag of intermediate wave (5), minor wave B may not move beyond the start of minor wave A below 1,236.54.

Within the diagonal of primary wave C, each sub-wave is extending in price and so may also do so in time. Within each zigzag, minor wave B may exhibit alternation in structure and may show an increased duration.

Within intermediate wave (1), minor wave B was a triangle lasting 11 days. Within intermediate wave (2), minor wave B was a zigzag lasting 2 days. Within intermediate wave (3), minor wave B was a regular flat lasting 60 days. Within intermediate wave (4), minor wave B was a regular contracting triangle lasting 40 days. Within intermediate wave (5), minor wave B may be expected to be an expanded flat, combination or running triangle to exhibit some alternation in structure. It may last as long as 40 to 60 days. So far it has lasted 41 days (refer to daily chart) and the structure is incomplete.

At this stage, it looks like minor wave B may most likely be a flat correction, or it may also still be a triangle. Both ideas are presented below.

This first weekly chart sees the upwards wave labelled primary wave A as a five wave structure. It must be acknowledged that this upwards wave looks better as a three than it does as a five. The fifth weekly chart below will consider the possibility that it was a three.

FIRST DAILY CHART – FLAT

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

Minor wave B may be an incomplete flat correction, and within the flat minute wave a must subdivide as a three, which may have been a double zigzag.

Minute wave b must also subdivide as a three and must retrace a minimum 0.9 length of minute wave a. The target would see minute wave b end within the most common range for B waves within flats, and at an area of strong resistance.

Minuette wave (c) must subdivide as a five wave structure. It may only be either an impulse or an ending diagonal. An impulse is much more likely.

Subminuette wave ii is showing up on the daily chart. When it is complete, minuette wave (c) should look like a five wave structure, and within it both of subminuette waves ii and iv should show up on the daily chart to give the wave count the right look.

Subminuette wave iv may complete another small range red daily candlestick on Monday.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

Minuette wave (c) so far looks like it is unfolding as an impulse. So far subminuette waves i, ii and now iii may be complete. If subminuette wave iii is over at Friday’s high, then it would be slightly shorter than subminuette wave i. This limits subminuette wave v to no longer than equality with subminuette wave iii, so that subminuette wave iii is not the shortest actionary wave and the core Elliott wave rule is met.

Subminuette wave ii was a shallow double zigzag. Subminuette wave iv may be a flat, combination or triangle to exhibit alternation in structure with subminuette wave ii. To exhibit alternation in depth it may be more shallow, ending about the 0.236 Fibonacci ratio. Because subminuette wave iv may not move into subminuette wave i price territory, below 1,335.79, it may not be as deep as the 0.618 Fibonacci ratio at 1,334.

Subminuette wave iv should last about a day or so for the wave count to have the right look at the daily chart level.

SECOND DAILY CHART – TRIANGLE

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

This alternate daily chart is identical to the first daily chart up to the high labelled minor wave A. Thereafter, it looks at a different structure for minor wave B.

Minor wave B may be an incomplete triangle, and within it minute wave a may have been a double zigzag. All remaining triangle sub-waves must be simple A-B-C structures, and three of the four remaining sub-waves must be simple zigzags. One remaining sub-wave may be a flat correction.

Minute wave b may be unfolding upwards as a single zigzag, and within it minuette wave (b) may not move beyond the start of minuette wave (a) below 1,303.08.

This alternate wave count expects weeks of choppy overlapping movement in an ever decreasing range.

All daily charts expect an impulse is unfolding higher for the short term. The subdivisions and labelling at the hourly chart level would all be mostly the same.

BEARISH ELLIOTT WAVE COUNT

FIFTH WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

There were five weekly charts published in the last historic analysis. This fifth weekly chart is the most immediately bearish wave count, so this is published as a bearish possibility.

This fifth weekly chart sees cycle wave b as a flat correction, and within it intermediate wave (B) may be a complete triple zigzag. This would indicate a regular flat as intermediate wave (B) is less than 1.05 the length of intermediate wave (A).

If cycle wave b is a flat correction, then within it primary wave B must retrace a minimum 0.9 length of primary wave A at 1,079.13 or below. The most common length of B waves within flats is from 1 to 1.38 times the length of the A wave. The target calculated would see primary wave B end within this range.

I have only seen two triple zigzags before during my 10 years of daily Elliott wave analysis. If this wave count turns out to be correct, this would be the third. The rarity of this structure is identified on the chart.

FIFTH DAILY CHART

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

If a new wave down at intermediate degree is beginning, then the first wave of minor wave 1 must subdivide as a five, which may only be an impulse or a leading diagonal.

Minor wave 1 may have been a complete impulse over on the 8th of February. But this downwards wave does not look very good as a five. It can be made to fit at lower time frames, but this movement fits better as a zigzag. The probability of this wave count is reduced.

Minor wave 2 may be an incomplete expanded flat. Minute wave c would be likely to end at least slightly above the end of minute wave a at 1,361.46 to avoid a truncation and a very rare running flat. Minor wave 2 may not move beyond the start of minor wave 1 above 1,365.68.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Again, price bounces up off support. This week’s strong weekly candlestick with an almost shaven head is very bullish. Support from volume and a bullish signal from On Balance Volume all support the Elliott wave analysis which expects upwards movement is incomplete.

Look for final resistance about 1,375.

DAILY CHART

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Looking at the bigger picture, Gold has been within a large consolidation since about January 2017 (this chart does not show all of this large consolidation), and during this consolidation it is two upwards days that have strongest volume and an upwards week that has strongest volume. Volume suggests an upwards breakout may be more likely than downwards.

Currently, Gold is within a smaller consolidation that began in early January 2018. This consolidation is delineated by support about 1,310 to 1,305 and resistance (final) about 1,375. It is an upwards day during this smaller consolidation that has strongest volume, suggesting an upwards breakout may be more likely here than downwards.

A very strong upwards day with an almost shaven head and support from volume offer good support to the Elliott wave counts which see this as a third wave. A bullish signal from On Balance Volume also offers support to the Elliott wave counts.

Resistance is next at 1,360. Thereafter, further resistance is at 1,365 and then 1,375.

GDX WEEKLY CHART

GDX Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Support about 20.80 has been tested about eight times and so far has held. The more often a support area is tested and holds, the more technical significance it has.

In the first instance, expect this area to continue to provide support. Only a strong downwards day, closing below support and preferably with some increase in volume, would constitute a downwards breakout from the consolidation that GDX has been in for a year now.

Resistance is about 25.50. Only a strong upwards day, closing above resistance and with support from volume, would constitute an upwards breakout.

Bullish volume this week and a bullish signal from On Balance Volume offer support to the view that an upwards swing should continue here to resistance.

GDX DAILY CHART

GDX Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

A bullish signal from On Balance Volume at the daily chart level and a bullish volume profile suggest more upwards movement next week for GDX.

Assume the opening gap for Friday is a measuring gap until proven otherwise. Measuring gaps may be used in trading to place stops. They are not usually closed for some time, so in an upwards trend should provide support. Stops may be placed just below the gap. This measuring gap gives a target at 22.63.

The long upper wick on Friday’s candlestick suggests a short term pullback may begin on Monday. Volume suggests any downwards movement here is a counter trend movement though.

US OIL

A bounce was expected to continue, with the target at 65.05. So far price has reached up to 65.99.

Summary: Price must turn here for the main Elliott wave count. A new high above 66.65 would substantially reduce the probability of the bearish wave count and increase the probability of a huge new bull market for Oil, which would have final confidence above 74.96.

Classic technical analysis this week strongly favours a bullish outlook. Members are advised to either hedge or be long here; shorts should be closed above 66.65.

If price turns lower here, then the target for a new low remains at 13.39. A new low on the way down, below 55.24, would add substantial confidence in a bearish outlook.

Always practice good risk management as the most important aspect of trading. Always trade with stops and invest only 1-5% of equity on any one trade. Failure to manage risk is the most common mistake new traders make.

MAIN WAVE COUNT

MONTHLY CHART

US Oil Elliott Wave Chart Monthly 2018
Click chart to enlarge.

Within the bear market, cycle wave b is seen as ending in May 2011. Thereafter, a five wave structure downwards for cycle wave c begins.

Primary wave 1 is a short impulse lasting five months. Primary wave 2 is a very deep 0.94 zigzag lasting 22 months. Primary wave 3 is a complete impulse with no Fibonacci ratio to primary wave 1. It lasted 30 months.

There is alternation in depth with primary wave 2 very deep and primary wave 4 relatively shallow. There is inadequate alternation in structure, both are zigzags. So far primary wave 4 has lasted 23 months. At this stage, there is almost perfect proportion between primary waves 2 and 4.

Primary wave 4 may not move into primary wave 1 price territory above 74.96.

The wider Elliott channel (teal) about this whole movement may offer support to primary wave 5.

WEEKLY CHART

US Oil Elliott Wave Chart Weekly 2018
Click chart to enlarge.

Primary wave 4 subdivides as a zigzag, and within it intermediate wave (C) may now be complete. If primary wave 5 were to only reach equality in length with primary wave 3, it would end with a small truncation. A target for primary wave 5 may best be calculated at intermediate degree. That can only be done when intermediate waves (1) through to (4) within primary wave 5 are complete.

For now a target will be calculated at primary degree using a ratio between primary waves 3 and 5. This target only has a small probability. This target will be recalculated as primary wave 5 nears its end, so it may change.

An Elliott channel is added to this possible zigzag for primary wave 4. A breach of the lower edge of this channel would provide a very strong indication that primary wave 4 should be over and primary wave 5 should be underway. Look out for some support on the way down, perhaps a short term bounce about the lower edge of the channel.

DAILY CHART

US Oil Elliott Wave Chart Daily 2018
Click chart to enlarge.

Minor wave 1 will subdivide as a complete impulse at lower time frames.

Minor wave 2 this week is slightly relabelled. It looks like a double zigzag, and this labelling has a better fit. The first structure in the double zigzag is labelled minute wave w. The double is joined by a three in the opposite direction, an expanded flat labelled minute wave x. The second zigzag in the double has deepened the correction achieving its purpose, and it is labelled a zigzag for minute wave y.

There is now almost no room left for this wave count to move into. Minor wave 2 must end here and minor wave 3 downwards must begin early next week if this wave count is correct.

A target is calculated for minor wave 3 which expects the most common Fibonacci ratio to minor wave 1. If price reaches down to this target and the structure is incomplete or price keeps falling through it, then the next Fibonacci ratio in the sequence of 2.618 would be used to calculate a new target.

Minor wave 2 may not move beyond the start of minor wave 1 above 66.65.

A new low below 55.24 would invalidate the bullish alternate below and provide reasonable confidence in this main wave count.

The bottom line for this wave count is that now we should assume an upwards trend is intact while price remains within the best fit channel, and so this wave count may be wrong. A clear breach of the lower edge of the channel by downwards movement is required for confidence in this main wave count this week.

This week’s classic analysis supports the alternate wave count and does not support this main wave count.

ALTERNATE WAVE COUNT

MONTHLY CHART

US Oil Elliott Wave Chart Monthly 2018
Click chart to enlarge.

It is possible that the bear market for Oil is over and a new bull market is in the very early stages.

A huge zigzag down to the last low may be complete and is labelled here Super Cycle wave (II).

Cycle wave b must be seen as complete in August 2013 for this wave count to work. It cannot be seen as complete at the prior major swing high in May 2011.

Cycle wave b is seen as a zigzag, and within it primary wave B is seen as a running contracting triangle. These are fairly common structures, although nine wave triangles are uncommon. All subdivisions fit.

Primary wave C moves beyond the end of primary wave A, so it avoids a truncation. But it does not have to move above the price territory of primary wave B to avoid a truncation, which is an important distinction.

If cycle wave b begins there, then cycle wave c may be seen as a complete five wave impulse.

Super Cycle wave (III) must move beyond the end of Super Cycle wave (I). It must move far enough above that point to allow room for a subsequent Super Cycle wave (IV) to unfold and remain above Super Cycle wave (I) price territory.

WEEKLY CHART

US Oil Elliott Wave Chart Weekly 2018
Click chart to enlarge.

If a new bull market is in the very early stages for Oil, then it may have begun with two overlapping first and second waves at primary then at intermediate degree.

Primary wave 3 may only subdivide as an impulse, and within it intermediate wave (3) may be complete.

Intermediate wave (4) may not move into intermediate wave (1) price territory below 55.24. Intermediate wave (4) would most likely be incomplete. It may continue further sideways or lower.

Intermediate wave (2) is labelled as a double zigzag. To exhibit alternation intermediate wave (4) may most likely be a flat, combination or triangle. Intermediate wave (2) lasted 17 weeks. For good proportion and the right look, intermediate wave (4) may last a Fibonacci 13 or even 21 weeks in total. So far it has lasted only eight weeks.

DAILY CHART

US Oil Elliott Wave Chart Daily 2018
Click chart to enlarge.

With classic technical analysis this week very bullish, it is time to publish a daily chart for this alternate idea.

It would be unlikely that intermediate wave (4) would be over a the last low labelled minor wave A. That would be too brief.

If intermediate wave (4) is continuing, then it may be as a flat correction. Minor wave B has reached the minimum requirement of 0.9 the length of minor wave A. It may continue higher and may make a new high above the start of minor wave A at 66.65 as in an expanded flat, which is the most common type.

When minor wave B is complete, then minor wave C downwards would be expected to make at least a slight new low below the end of minor wave A at 58.13 to avoid a truncation.

TECHNICAL ANALYSIS

MONTHLY CHART

US Oil Chart Monthly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

The strongest recent monthly volume is for the downwards month of August 2017. This is bearish.

The rise in price had support from volume for the month of January. Downwards movement did not have support from rising volume for the now completed month of February. This is bullish. MACD and On Balance Volume are also both bullish. Overall, this chart is more bullish than bearish.

RSI indicates there is room for upwards movement to continue.

The month of March is still incomplete, so at this time no conclusions may be drawn.

DAILY CHART

US Oil Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

The last two upwards days have reasonable support now from volume, which is bullish. Friday was slightly weaker than Wednesday though.

ADX, On Balance Volume, the short term volume profile, and Bollinger Bands are all bullish. This chart indicates an upwards trend that has a reasonable distance to run yet.

When Oil has a strong upwards trend, Stochastics may remain extremely overbought for a reasonable period of time. Only when it is overbought and then exhibits bearish divergence with price may a sizeable pullback / consolidation or end to the trend be expected. That is not the case here.

This chart strongly supports the alternate wave count.

VOLATILITY INDEX

OVX Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

It is generally expected that OVX and Oil price should have a negative correlation. However, the correlation co-efficient proves absolutely that this expectation is not supported by the math. Their correlation is mathematically unreliable. Currently, it is very weakly positive.

This may be discounted as an unreliable relationship, and the math supports this view. Normally, it would be read as bearish divergence, but that interpretation assumes a more reliable correlation than the math shows.

Any two sets of data that have a correlation co-efficient that spends time within the highlighted zone of +0.5 to -0.5 are two sets of data that do not have a reliable correlation. Any correlation that may appear from time to time may be simply due to chance and not because the two sets of data have a relationship in any way.

This analysis was previously posted on Elliott Wave Gold.

Weekly Elliott Wave and Technical Analysis of S&P500 and Gold and US Oil – 16th March, 2018

Lara’s Weekly is an end of week Elliott Wave and Technical Analysis of the S&P 500, GOLD, and USOIL that focuses on the mid-to-long-term picture. This analysis service is designed for investors and swing traders.

Lara’s Weekly is at this time available to the general public, but in the near future it will be available by subscription only. I will be offering a once only awesome Grandfather rate to the earliest subscribers when Lara’s Weekly is launched as a paid subscription service. To make sure you don’t miss out and not get the Grandfather rate, be notified: click on the Notify Me button below:


Lara's Weekly Masthead

S&P 500

A slight new low and then a bounce was expected for Friday. The session did not begin with a slight new low, but price did bounce.

Summary: In the short term, expect a bounce to continue to about 2,789; it may be choppy and overlapping and may last another one to few days. Thereafter, another wave down may develop.

Always practice good risk management. Always trade with stops and invest only 1-5% of equity on any one trade.

The biggest picture, Grand Super Cycle analysis, is here.

Last historic analysis with monthly charts is here. Video is here.

An alternate idea at the monthly chart level is given here at the end of this analysis.

An historic example of a cycle degree fifth wave is given at the end of the analysis here.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART

S&P 500 Weekly 2018
Click chart to enlarge.

Cycle wave V must complete as a five structure, which should look clear at the weekly chart level. It may only be an impulse or ending diagonal. At this stage, it is clear it is an impulse.

Within cycle wave V, the third waves at all degrees may only subdivide as impulses.

Intermediate wave (4) has breached an Elliott channel drawn using Elliott’s first technique. The channel is redrawn using Elliott’s second technique as if intermediate wave (4) was over at the last low. If intermediate wave (4) continues sideways, then the channel may be redrawn when it is over. The upper edge may provide resistance for intermediate wave (5).

Intermediate wave (4) may not move into intermediate wave (1) price territory below 2,193.81. At this stage, it now looks like intermediate wave (4) may be continuing further sideways as a combination, triangle or flat. These three ideas are separated into separate daily charts. All three ideas would see intermediate wave (4) exhibit alternation in structure with the double zigzag of intermediate wave (2).

A double zigzag would also be possible for intermediate wave (4), but because intermediate wave (2) was a double zigzag this is the least likely structure for intermediate wave (4) to be. Alternation should be expected until price proves otherwise.

DAILY CHART – TRIANGLE

S&P 500 Daily 2018
Click chart to enlarge.

This first daily chart outlines how intermediate wave (4) may now continue further sideways as a contracting or barrier triangle. It is possible that minor wave B within the triangle was over at the last high, which would mean the triangle would be a regular triangle. Minor wave C downwards may now be underway and may be a single or double zigzag. One of the five sub-waves of a triangle is usually a more complicated multiple, and the most common sub-wave to do this is wave C.

Minor wave C may not make a new low below the end of minor wave A at 2,532.69.

Intermediate wave 2 lasted 11 weeks. If intermediate wave (4) is incomplete, then it would have so far lasted only six weeks. Triangles tend to be very time consuming structures, so intermediate wave (4) may total a Fibonacci 13 or even 21 weeks at its conclusion.

Because this is the only daily chart which expects price to continue to find support at the 200 day moving average, it is presented first; it may have a slightly higher probability than the next two daily charts.

DAILY CHART – COMBINATION

S&P 500 Daily 2018
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Double combinations are very common structures. The first structure in a possible double combination for intermediate wave (4) would be a complete zigzag labelled minor wave W. The double should be joined by a three in the opposite direction labelled minor wave X, which may be a complete zigzag. X waves within combinations are typically very deep; if minor wave X is over at the last high, then it would be a 0.79 length of minor wave W, which is fairly deep giving it a normal look. There is no minimum nor maximum requirement for X waves within combinations.

The second structure in the double would most likely be a flat correction labelled minor wave Y. It may also be a triangle, but in my experience this is very rare.

A flat correction would subdivide 3-3-5. Minute wave a must be a three wave structure, most likely a zigzag.

The purpose of combinations is to take up time and move price sideways. To achieve this purpose the second structure in the double usually ends close to the same level as the first. Minor wave Y would be expected to end about the same level as minor wave W at 2,532.69. This would require a strong overshoot or breach of the 200 day moving average, which looks unlikely.

HOURLY CHART

S&P 500 Hourly 2018
Click chart to enlarge.

The downwards best fit channel is clearly breached by upwards movement at the start of Friday’s session, indicating the last wave down should be complete and a new wave up should be underway.

The last wave down can fit as a five on the hourly and five minute charts. This may be minute wave a of a zigzag.

If minute wave a is correctly analysed as a five, then minute wave b may not move beyond its start above 2,801.90.

Minute wave b may be any corrective structure. It may be expected to last another one to few days. So far the corrective structure has almost reached the 0.382 Fibonacci ratio of minute wave a, already, so it may continue higher now to end closer to the 0.618 Fibonacci ratio at about 2,779.

DAILY CHART – FLAT

S&P 500 Daily 2018
Click chart to enlarge.

Flat corrections are very common. The most common type of flat is an expanded flat. This would see minor wave B move above the start of minor wave A at 2,872.87.

Within a flat correction, minor wave B must retrace a minimum 0.9 length of minor wave A at 2,838.85. The most common length for minor wave B within a flat correction would be 1 to 1.38 times the length of minor wave A at 2,872.87 to 3,002.15. An expanded flat would see minor wave B 1.05 times the length of minor wave A or longer, at 2,889.89 or above.

When minor wave B is a complete corrective structure ending at or above the minimum requirement, then minor wave C downwards would be expected to make a new low below the end of minor wave A at 2,532.69 to avoid a truncation.

This wave count would require a very substantial breach of the 200 day moving average for the end of intermediate wave (4). This looks unlikely.

HOURLY CHART – FLAT

S&P 500 Hourly 2018
Click chart to enlarge.

It is also possible that upwards movement is not over and minute wave c is incomplete. At this stage, minuette wave (iv) now looks grossly disproportionate to minuette wave (ii), so this wave count no longer has the right look.

If intermediate wave (4) is unfolding as a flat correction, then within it minor wave B has not yet met the minimum requirement of 0.9 the length of minor wave A at 2,838.85.

Within minute wave c, the correction of minuette wave (iv) may not move into minuette wave (i) price territory below 2,732.08.

Minuette wave (iv) has breached a channel drawn using Elliott’s first technique, so the channel is redrawn using the second technique. Draw the first trend line from the ends of minuette waves (ii) to (iv), then place a parallel copy on the end of minuette wave (iii). Minuette wave (v) may end either mid way within this channel, or about the upper edge. Friday’s upwards movement is finding support about the lower edge of this channel.

A target for minute wave c to end is calculated at minuette degree. This would see the minimum requirement for minor wave B just met.

DAILY CHART – ALTERNATE

S&P 500 Daily 2018
Click chart to enlarge.

It is possible still that intermediate wave (4) was complete as a relatively brief and shallow single zigzag.

A new all time high with support from volume and any one of a bullish signal from On Balance Volume or the AD line would see this alternate wave count become the main wave count.

Within minor wave 3, minute wave ii may not move beyond the start of minute wave i below 2,647.32.

This first alternate expects minor wave 1 was an impulse. This is the most common structure for a first wave, so this is the more likely of two alternates presented today.

DAILY CHART – SECOND ALTERNATE

S&P 500 Daily 2018
Click chart to enlarge.

It is also possible that minor wave 1 is an incomplete leading contracting diagonal. This is a less common structure for a first wave, so this is the least likely wave count published today.

The diagonal would be contracting because minute wave iii is shorter than minute wave i. Within a contracting diagonal, minute wave iv must be shorter than minute wave ii. Therefore, minute wave iv may not be equal or longer in length than minute wave ii, so it may not reach 2,660.07 or below.

Leading diagonals most often end with a small overshoot of the 1-3 trend line. As soon as price makes a small overshoot here of the upper pink i-iii trend line, if it quickly reverses and moves strongly lower, then this wave count would be indicated as more likely.

Leading diagonals in first wave positions are very commonly followed by very deep second wave corrections. If what looks like a diagonal upwards completes and price quickly reverses, then a Fibonacci retracement would be drawn along the length of the diagonal. Minor wave 2 would be expected to be deeper than the 0.618 Fibonacci ratio of minor wave 1.

Minor wave 2 may not move beyond the start of minor wave 1 below 2,532.69. Minor wave 2 may find support about the 200 day moving average.

TECHNICAL ANALYSIS

WEEKLY CHART

S&P 500 weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

This week moved price higher with a higher high and a higher low, but the candlestick is red and the balance of volume is down. At this time frame, it looks like there may be more support for downwards movement than upwards within the week, but it would be better to look inside the week at daily volume bars to draw a conclusion.

The pullback has brought ADX down from very extreme and RSI down from extremely overbought. There is again room for a new trend to develop.

DAILY CHART

S&P 500 daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

While the small amount of upwards movement on Friday does have support from volume, this was an options expiry date and so a volume spike would be expected. Short term volume is bullish still, but the longer upper wick on Friday’s Gravestone doji is bearish. This doji should not be read as a reversal signal though as it does not come at the end of an upwards trend.

The support line for On Balance Volume is redrawn.

VOLATILITY – INVERTED VIX CHART

VIX daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

So that colour blind members are included, bearish signals will be noted with blue and bullish signals with yellow.

Normally, volatility should decline as price moves higher and increase as price moves lower. This means that normally inverted VIX should move in the same direction as price.

Bullish divergence in last analysis has been followed by an upwards day. This may now be resolved, or it may need another upwards day to resolve it.

Inverted VIX on Friday made a new high above the prior high three sessions ago, but price has not. This divergence is bullish.

BREADTH – AD LINE

AD Line daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

There is normally 4-6 months divergence between price and market breadth prior to a full fledged bear market. This has been so for all major bear markets within the last 90 odd years. With no longer term divergence yet at this point, any decline in price should be expected to be a pullback within an ongoing bull market and not necessarily the start of a bear market.

All of small, mid and large caps last week completed an outside week. All sectors of the market at this time appear to be in a consolidation.

Breadth should be read as a leading indicator.

The AD line on Friday has made a new high above the prior high three sessions ago, but price has not. This divergence is bullish.

DOW THEORY

All indices have made new all time highs as recently as eight weeks ago, confirming the ongoing bull market.

The following lows need to be exceeded for Dow Theory to confirm the end of the bull market and a change to a bear market:

DJIA: 17,883.56.

DJT: 7,039.41.

S&P500: 2,083.79.

Nasdaq: 5,034.41.

Charts showing each prior major swing low used for Dow Theory are here.

GOLD

Another test of support about 1,310 to 1,305 was expected. This is what has happened.

Summary: Expect the upwards swing to resume, which may be choppy and overlapping. The target at 1,391 may be too high; upwards movement may find strong resistance about 1,365 – 1,375.

However, a bearish signal from On Balance Volume at the daily chart level today puts some doubt on this view. If price can close below support at 1,305, then a downwards breakout may be underway.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last in-depth historic analysis with monthly and several weekly charts is here, video is here.

There are multiple wave counts at this time at the weekly and monthly chart levels. In order to make this analysis manageable and accessible only two will be published on a daily basis, one bullish and one bearish. This does not mean the other possibilities may not be correct, only that publication of them all each day is too much to digest. At this stage, they do not diverge from the two possibilities below.

BULLISH ELLIOTT WAVE COUNT

FIRST WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

Cycle wave b may be a single zigzag. Zigzags subdivide 5-3-5. Primary wave C must subdivide as a five wave structure and may be either an impulse or an ending diagonal. Overlapping at this stage indicates an ending diagonal.

Within an ending diagonal, all sub-waves must subdivide as zigzags. Intermediate wave (4) must overlap into intermediate wave (1) price territory. This diagonal is expanding: intermediate wave (3) is longer than intermediate wave (1) and intermediate wave (4) is longer than intermediate wave (2). Intermediate wave (5) must be longer than intermediate wave (3), so it must end above 1,398.41 where it would reach equality in length with intermediate wave (3).

Within the final zigzag of intermediate wave (5), minor wave B may not move beyond the start of minor wave A below 1,236.54.

Within the diagonal of primary wave C, each sub-wave is extending in price and so may also do so in time. Within each zigzag, minor wave B may exhibit alternation in structure and may show an increased duration.

Within intermediate wave (1), minor wave B was a triangle lasting 11 days. Within intermediate wave (2), minor wave B was a zigzag lasting 2 days. Within intermediate wave (3), minor wave B was a regular flat lasting 60 days. Within intermediate wave (4), minor wave B was a regular contracting triangle lasting 40 days. Within intermediate wave (5), minor wave B may be expected to be an expanded flat, combination or running triangle to exhibit some alternation in structure. It may last as long as 40 to 60 days. So far it has lasted 29 days and the structure is incomplete.

This first weekly chart sees the upwards wave labelled primary wave A as a five wave structure. It must be acknowledged that this upwards wave looks better as a three than it does as a five. The fifth weekly chart below will consider the possibility that it was a three.

FIRST DAILY CHART

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

Within the ending diagonal, intermediate wave (5) must sub-divide as a zigzag.

Minor wave B may now be either a flat or a combination. An alternate idea of a triangle for minor wave B is published today in a separate chart below.

Within either a flat or combination for minor wave B, the correction of minute wave b or x may be unfolding as an expanded flat correction. When this expanded flat is complete, then a downwards swing for minute wave c or y would be expected.

Because both options of a flat or combination for minor wave B now expect minute wave b or x to be completing as an expanded flat, they both need to see a five up complete for minuette wave (c). Within the five up, subminuette wave i would be complete at the last small swing high. Subminuette wave ii may have ended at Friday’s low.

If minor wave B is unfolding as a flat correction, then minute wave c may move reasonably below the low of minute wave a at 1,307.09 and must be a five wave structure.

If minor wave B is unfolding as a combination, then minute wave y may be a flat or triangle and may end about the same level as minute wave w at 1,307.09.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

Subminuette wave ii may now be over.

Micro wave C may have bought price back down to test support, which is strong about 1,310 – 1,305. Micro wave C is now a complete five wave structure. Subminuette wave iii may have begun at the end of Friday’s session. There is a strong Bullish Piercing pattern at the low.

If it continues further, then subminuette wave ii may not move beyond the start of subminuette wave i below 1,303.08.

FIRST DAILY CHART – ALTERNATE

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

This alternate daily chart is identical to the first daily chart up to the high labelled minor wave A. Thereafter, it looks at a different structure for minor wave B.

Minor wave B may be an incomplete triangle, and within it minute wave a may have been a double zigzag. All remaining triangle sub-waves must be simple A-B-C structures, and three of the four remaining sub-waves must be simple zigzags. One remaining sub-wave may be a flat correction.

Minute wave b may be unfolding upwards as a single zigzag, and within it minuette wave (b) may not move beyond the start of minuette wave (a) below 1,303.08.

This alternate wave count expects weeks of choppy overlapping movement in an ever decreasing range.

BEARISH ELLIOTT WAVE COUNT

FIFTH WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

There were five weekly charts published in the last historic analysis. This fifth weekly chart is the most immediately bearish wave count, so this is published as a bearish possibility.

This fifth weekly chart sees cycle wave b as a flat correction, and within it intermediate wave (B) may be a complete triple zigzag. This would indicate a regular flat as intermediate wave (B) is less than 1.05 the length of intermediate wave (A).

If cycle wave b is a flat correction, then within it primary wave B must retrace a minimum 0.9 length of primary wave A at 1,079.13 or below. The most common length of B waves within flats is from 1 to 1.38 times the length of the A wave. The target calculated would see primary wave B end within this range.

I have only seen two triple zigzags before during my 10 years of daily Elliott wave analysis. If this wave count turns out to be correct, this would be the third. The rarity of this structure is identified on the chart.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price is again at support and On Balance Volume is almost at support. With volume continuing to decline, it looks reasonable to expect a turn back to an upwards swing about here.

Price is still range bound.

DAILY CHART

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Looking at the bigger picture, Gold has been within a large consolidation since about January 2017 (this chart does not show all of this large consolidation), and during this consolidation it is two upwards days that have strongest volume and an upwards week that has strongest volume. Volume suggests an upwards breakout may be more likely than downwards.

Currently, Gold is within a smaller consolidation that began in early January 2018. This consolidation is delineated by support about 1,310 to 1,305 and resistance (final) about 1,375. It is an upwards day during this smaller consolidation that has strongest volume, suggesting an upwards breakout may be more likely here than downwards.

With a little support for downwards movement on Friday and a bearish signal from On Balance Volume, price may be ready to break out of this smaller consolidation downwards. This does not support the Elliott wave count.

Price needs to close below 1,305, preferably on a strong downwards day, for confidence in a downwards breakout. If there is support from volume, then more confidence may be had (but it is not necessary for a downwards breakout).

GDX WEEKLY CHART

GDX Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Support about 20.80 has been tested about eight times and so far has held. The more often a support area is tested and holds, the more technical significance it has.

In the first instance, expect this area to continue to provide support. Only a strong downwards day, closing below support and preferably with some increase in volume, would constitute a downwards breakout from the consolidation that GDX has been in for a year now.

Resistance is about 25.50. Only a strong upwards day, closing above resistance and with support from volume, would constitute an upwards breakout.

With On Balance Volume again at support and price close to support, it is reasonable to expect a turn and an upwards swing about here. There is a little room though for a little more downwards movement.

GDX DAILY CHART

GDX Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

The doji for Friday, coming within a consolidation, cannot be read as a reversal signal. It looks like price may be again finding support close to 21.30.

The signal from On Balance Volume is weak because the line has a reasonable slope and is not very long held. It was tested four times though, so this is identified as a weak bearish signal. The signal makes no comment though on how far nor for how long downwards movement may result.

While ADX now indicates a downwards trend, for confidence in this a breakout below support with a close below 21.30 would be necessary. If this happens with support from volume, then more confidence in a downwards trend may be had.

US OIL

Another small range week, this time an inside week, does not change the Elliott wave analysis.

Summary: The outlook will remain bearish while price remains below 66.65. A new high above 66.65 at this stage would be very bullish.

In the short term, still look for a small bounce to end a little above 63.28 with a possible target at 65.05, then the continuation of a downwards trend.

Always practice good risk management as the most important aspect of trading. Always trade with stops and invest only 1-5% of equity on any one trade. Failure to manage risk is the most common mistake new traders make.

New updates to this analysis are in bold.

MAIN WAVE COUNT

MONTHLY CHART

US Oil Elliott Wave Chart Monthly 2018
Click chart to enlarge.

Within the bear market, cycle wave b is seen as ending in May 2011. Thereafter, a five wave structure downwards for cycle wave c begins.

Primary wave 1 is a short impulse lasting five months. Primary wave 2 is a very deep 0.94 zigzag lasting 22 months. Primary wave 3 is a complete impulse with no Fibonacci ratio to primary wave 1. It lasted 30 months.

There is alternation in depth with primary wave 2 very deep and primary wave 4 relatively shallow. There is inadequate alternation in structure, both are zigzags. So far primary wave 4 has lasted 23 months. At this stage, there is almost perfect proportion between primary waves 2 and 4.

Primary wave 4 may not move into primary wave 1 price territory above 74.96.

The wider Elliott channel (teal) about this whole movement may offer support to primary wave 5.

WEEKLY CHART

US Oil Elliott Wave Chart Weekly 2018
Click chart to enlarge.

Primary wave 4 subdivides as a zigzag, and within it intermediate wave (C) may now be complete. If primary wave 5 were to only reach equality in length with primary wave 3, it would end with a small truncation. A target for primary wave 5 may best be calculated at intermediate degree. That can only be done when intermediate waves (1) through to (4) within primary wave 5 are complete.

For now a target will be calculated at primary degree using a ratio between primary waves 3 and 5. This target only has a small probability. This target will be recalculated as primary wave 5 nears its end, so it may change.

An Elliott channel is added to this possible zigzag for primary wave 4. A breach of the lower edge of this channel would provide a very strong indication that primary wave 4 should be over and primary wave 5 should be underway. Look out for some support on the way down, perhaps a short term bounce about the lower edge of the channel.

DAILY CHART

US Oil Elliott Wave Chart Daily 2018
Click chart to enlarge.

Minor wave 1 will subdivide as a complete impulse at lower time frames.

Minor wave 2 may still be an incomplete double combination. The first structure in the double may be a complete zigzag labelled minute wave w. The double may be joined by a three in the opposite direction, an expanded flat labelled minute wave x. The second structure in the double may be an incomplete expanded flat labelled minute wave y. At 65.05 minuette wave (c) would reach 1.618 the length of minuette wave (a).

When minor wave 2 is finally complete, then minor wave 3 downwards may begin. When minor wave 2 is complete and the start of minor wave 3 is known, then a target for minor wave 3 to end may be calculated. That cannot be done yet.

Minor wave 2 may not move beyond the start of minor wave 1 above 66.65.

A new low below 55.24 would invalidate the bullish alternate below and provide reasonable confidence in this main wave count.

ALTERNATE WAVE COUNT

MONTHLY CHART

US Oil Elliott Wave Chart Monthly 2018
Click chart to enlarge.

It is possible that the bear market for Oil is over and a new bull market is in the very early stages.

A huge zigzag down to the last low may be complete and is labelled here Super Cycle wave (II).

Cycle wave b must be seen as complete in August 2013 for this wave count to work. It cannot be seen as complete at the prior major swing high in May 2011.

Cycle wave b is seen as a zigzag, and within it primary wave B is seen as a running contracting triangle. These are fairly common structures, although nine wave triangles are uncommon. All subdivisions fit.

Primary wave C moves beyond the end of primary wave A, so it avoids a truncation. But it does not have to move above the price territory of primary wave B to avoid a truncation, which is an important distinction.

If cycle wave b begins there, then cycle wave c may be seen as a complete five wave impulse.

Super Cycle wave (III) must move beyond the end of Super Cycle wave (I). It must move far enough above that point to allow room for a subsequent Super Cycle wave (IV) to unfold and remain above Super Cycle wave (I) price territory.

WEEKLY CHART

US Oil Elliott Wave Chart Weekly 2018
Click chart to enlarge.

If a new bull market is in the very early stages for Oil, then it may have begun with two overlapping first and second waves at primary then at intermediate degree.

Primary wave 3 may only subdivide as an impulse, and within it intermediate wave (3) may be complete.

Intermediate wave (4) may not move into intermediate wave (1) price territory below 55.24. Intermediate wave (4) would most likely be incomplete. It may continue further sideways or lower.

TECHNICAL ANALYSIS

MONTHLY CHART

US Oil Chart Monthly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

The strongest recent monthly volume is for the downwards month of August 2017. This is bearish.

The rise in price had support from volume for the month of January. Downwards movement did not have support from rising volume for the now completed month of February. This is bullish. MACD and On Balance Volume are also both bullish. Overall, this chart is more bullish than bearish.

RSI indicates there is room for upwards movement to continue.

DAILY CHART

US Oil Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

The pattern of stronger volume for downwards days and weaker volume for upwards days continues. The short term volume profile supports the first Elliott wave count.

There is a very small amount of room for On Balance Volume to move higher. Resistance by On Balance Volume may serve to halt the rise in price.

VOLATILITY INDEX

OVX Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price has made a new high above the prior high three sessions ago, but volatility has not made a corresponding new low. This indicates weakness within price and is interpreted as bearish.

This analysis was previously posted on Elliott Wave Gold.