84 thoughts on “S&P500 Elliott Wave Technical Analysis – 2nd February, 2016 – Video

  1. freaking oil messing us up, we could have crashed good today, all this talk of a few oil producing countries slowing down production. once they realize it will be a non factor, oil will crash again, inventory build up again worse than expected today, yet oil still caught a bid.

    1. I have Oil in a second wave correction… or possibly a fourth wave triangle continuing.

      It’s come up to find resistance at a trend line. I’m watching to see if that line holds. So far it is, but I need another day or so to see what happens next.

      The Oil analysis is on Elliott Wave Gold (but its for members only over there).

      I’m not worried about price behaviour on Oil too much today, I’ll wait for a few days to see what happens then may enter short there again. My last short started off well, but didn’t hold. Stopped out today for no loss (I move my stop to break even if within a day or so it becomes comfortably positive).

  2. I was hoping for a green print on UVXY but everything I am seeing says this move is counter-trend. Standing pat after picking up a few more volatility calls on the dip and saving a bit of dry powder for possible deployment tomorrow. Should be an interesting evening!
    I do expect the round number “pivot problem” to resolve tomorrow!

    1. If we go below 1908.54 now short term we have 5 down 3 up, poss reversal signal (invalidated by moving above todays recent high).

      My guess is that they will close it near current levels and either gap up or do a ‘gap & go’ downwards tomorrow. i’m hoping it’s the latter

  3. Olga, I wanted to make sure you understand how those options work, I replied to your earlier question, perhaps Verne would like to expound also.

    1. Bought another bunch of UVXY at 42 on the way up but bailed on that just now at 42.10 to reduce risk. Typical – seems to have reversed course now.

      Want to see us go below 1898 and 1880 before getting too comfortable. My ‘rather alarmed’ look is still printed on my face right now.

      Upper baseline from todays lows currently providing price some support.

  4. Maybe this? I’m not so happy with the disproportion of submicro (2) and (4) within this move down. But it does fit as an impulse. And this is the 5 minute chart so one should not expect everything to look perfect. And sometimes the S&P just doesn’t have fives that look like fives…

    But I am wondering here, am I seeing what I want to see or am I seeing what is there?

    Anyway, for what it’s worth here is my current count for the 5 minute chart. I don’t do this everyday and so please don’t ask for me to provide this every day. I’m looking for my own short entry today which is why I’m here and following this closely.

    1. I keep going back to the daily chart and noticing two things which make me want to enter short here:

      1. The channel about the bounce was broken by downwards movement. Now price is coming back up to test the lower edge of that channel. This looks like a typical break and throwback and that is my absolute favourite set up for an entry point.

      2. Every time in a downwards trend (fast third wave which is what I think should be unfolding right now) that S&P prints a green candlestick it presents a great opportunity to join the trend at a good price.

      Throwback + green candlestick today…. nice entry for me?

      Anyway, for what its worth that is my thinking right now. Just waiting now to see how this C wave on my 5 minute chart unfolds.

      1. Lara! the fact that you’re looking for your own entry point at these levels, in of itself gives me confidence… Best wishes on your trade, whatever it may be. And thanks for sharing your rare 5 minute chart…

        I would time your entry with your oil analysis. Does it look like oil is topping out? If so it should be a good move to open a short position. The correlation continues

        1. My diary entry for Oil today:

          “US Oil has a deep second wave, position stopped out for no loss. Wait, try again. Not finding resistance where it should so wait.”

      2. Okay, so this is my diary entry today for S&P:

        “breakout of channel + back test + 3 up on hourly chart + small exhaustion gap on 5 minute chart = enter here short”

        I’m in and now I’m off for second coffee. It’s my practice to close my trading platform and step away for at least 24 hours after entering a position, and to not watch it. I’ve done my homework and have my reasoning, I don’t want to get emotional about it so I step away.

        I’ve set my stop just above 1,947.2 and I’m risking less then 5% of my equity.

          1. You’re welcome, and I’m learning from your comments too Olga.

            Thank you for your insights into your trading practice and strategy.

            1. Well – if all members could please refer to me as ‘Teachers Pet’ going forward, that would indeed be very much appreciated.

              Best Regards
              TP πŸ˜‰


  5. on the hourly from the high of 2/1 to today’s low, this thrust back up is approximately 61.8% of the downmove. It came just shy of the 61.8% (so far)

      1. A ‘far too close for comfort’ ABC atm!
        Todays high taken out – 1918 is the last line in the sand.

        If we go above that at is still possible we could go lower than todays low before going above 1946, albeit my ‘caution’ buzzer is going nuts right now

        1. If this is a second wave correction then it could be a back test of the orange channel.

          If it comes up to touch that lower orange line on the hourly chart then I’d expect that to provide strong resistance.

          If that happens I may try my short entry there, with a stop just above the start of the first wave at the invalidation point 1,947.2.

          1. Ha Ha – this is some great service we have roped you into providing right now Lara!
            Can you do this every day….. Pleeeeeease!! πŸ™‚

            (Only joking BTW – albeit very much appreciated)

            1. No worries, and no, can’t do it every day. I’m looking for my entry right now… hence I’m here and watching closely.

        2. Nothing at all wrong with that. A lot of short positions just got shaken out as is the intention with this kind of move. Considering the larger picture, a tempest in a teacup…. πŸ™‚

  6. When I look at todays daily candlestick I see a throwback to the lower edge of the small orange channel which holds the prior bounce.

    This looks like a typical breakout now throwback. (that’s a breakout from an Elliott wave channel, not yet a breakout from a consolidation zone as defined in classic technical analysis).

    We also now have a slight new low below 1,872.7. And so today I have enough confidence in the next downwards wave to look for my own entry to go short. If I can find a good entry point I am still within intermediate wave (1) price territory so theoretically I could hold such a position all the way down to the end of primary 1. That would mean holding on while intermediate (4) unfolds… and I’m not so sure I’d want to hold on for a multi week correction. So maybe to exit when intermediate (3) is confirmed as over.

    1. Boy I was hoping the hapless bulls would push it high enough to get a bearish engulfing candle but they did not quite have enough oomph. A return to a red print is as clear a sign for “ALL IN” as you will ever see… πŸ™‚

    2. Is the end of Primary wave 1 the target of 1428?

      Do you have a target for end of intermediate (3)?

      Am I understanding you correctly? if not please clarify.

      1. “Because intermediate wave (2) was so deep the best Fibonacci ratio to apply for the target of intermediate wave (3) is 2.618 which gives a target at 1,428. “

      2. I don’t have a target for the end of primary 1 yet because I can’t calculate that until intermediate (3) and (4) are complete.

        It should be lower than 1,428.

        The target for intermediate (3) is 1,428. And that may be where I would choose to exit… if this all unfolds as I expect.

    3. Yep, Yep, Yep. That point should also deliver the UVXY spike when a short of that monster would be the money trade, instead of waiting for five down… πŸ™‚

  7. Another vigorous thrust from some sort of triangle. The third in as many trading days. We should see an immediate reversal and resumption of the prior trend….

    1. If this is a small fourth wave up then it can’t go into first wave price territory… which I would have at 1,909.31.

      So far it’s very close indeed….

  8. Somebody “shaking the trees”. Only the gullible are going to fall for it…
    The banksters are REALLY worried… πŸ™‚ πŸ™‚

    1. Its popped out the top of the base channel from todays low, but it looks like it’s slowing. Waiting for one possible small push higher. Def looks corrective as pointed out by Rodney earlier. Usual scary wave c

      All these deep retraces are getting stupid now. If this is the big one then someone is wasting alot of money. We’ll probably know soon after the event by which financial institutions go bust first.

  9. Don’t forget when purchasing options NEVER pay the ask price. Always use stink bids to take advantage of bankster induced price volatility. If you are desperate, match the bid. Obviously no market orders…but you guys know that! πŸ™‚

  10. Oh all right! I’ll take a break of 1872.50! πŸ™‚ πŸ™‚ πŸ™‚
    Fellow gunslingers, UVXY 50 calls look like a good place to roll SDS loot! )

      1. In this environment with an expected big decline, the reward to risk ratio is good for very short term trades so I am looking at this week expiration.
        A good rule of thumb is to unload as soon as they double. Don’t be greedy!!

          1. Most welcome! Don’t be afraid to take profits and/or roll after they double. They should do so later today or early tomorrow… πŸ™‚

    1. Vern–I’m not a trader but do appreciate following your tactics. Would you consider using both expiration date and strike price when you comment on options? UVXY 50 calls but what’s expiration?

  11. Call me superstitious, but I still want a CLOSE below 1900 before deploying the rest of my short term powder. NDX already down almost 1% so it can’t be too long now…an intra-day 50 point decline would do it….is that too much to ask?!
    Since we are making requests, a 100 point down futures would also be nice…. πŸ™‚

  12. Lara,

    So far it looks like three waves down from the recent high at 1947. Could minuette ii be extending, with the high at 1947 being w of ii, and the recent low at 1872 being x, with y still to follow?


    1. Imho – If we go above 1915, that could most certainly be on the table, but it would make this correction alot more drawn out than it’s wave 2 counterpart at one higher degree, so (at this stage) I still personally place it at a lower probability.

      I hope I’m right otherwise I’ll be licking my wounds once again!

      1. We’re still within the channel down from 1947 (and we briefly dropped out of it at todays low) so not panicking quite yet!

        1. Today’s move from 1872 to 1898 or so looks corrective to me. I am thinking we have a 1-2, i-ii, sort of count from yesterday’s high at 1947. The possibility of an extended or expanded wave 2 that you mention Peter, is a concern. But it is not yet a conclusion either. Remember, in the new bear market surprises should be to the downside.

          1. Price is compressing. This is a very bearish signal imo.

            Look at the bollinger bands I pointed out over the last few days!

      2. By the way Olga, just above 1915 is where I have my stops. I moved them to that point this morning as once again, I will shortly be away from my computer for the remainder of today’s trading. I am glad to know I am thinking along your lines because your wave counting is impressive to me. As I’ve said before, you have taught me a lot. And you are not even the teacher! This is a great site. Thanks to all.

    2. Peter – I agree with everything Olga has said.

      The only thing I would add: so far this downwards wave can be seen as 1-2-3-4 with 4 still unfolding. It’s not done yet.

      And the other thing: sometimes the S&P just does not exhibit perfect looking waves at all time frames. Sometimes its threes look like fives and vice versa.

  13. Market just fell slightly under orange x. This means the upwards move from low at 1812 is very likely a 3 wave structure (corrective).

    Now 100% short with a stop at 1914.

    I’d be very suprised at another retest of the lower orange trendline now, but stranger things have happened!

    1. I don’t trade options but following Vernes comment below I purchased a small amount of SDS 24 calls at 0.07 for a bit of fun. Profit not that huge on them as position very small, but they seem to be doing pretty well percentage wise atm!!

      Still can’t see trading options becoming a regular thing for me!

      1. That is exactly the right way to handle speculative trades! Small cheap positions that you can afford to loose that will hopefully explode…a closely guarded secret of option traders…
        Sell as soon as they double…or hold if you are a gunslinger…or sell half and play with house money! πŸ™‚

        1. They had already doubled before this bounce – will just hold them.

          Do I have to sell them before they expire or will they just auto settle at expiration?

          As you can glean from that question – I have no clue about how these things work!!

          1. be careful, your options are an agreement to buy those sds shares at the 24 strike price, each contract is 100 shares. if your options are in the money at expiration, they will be exercised and you have just bought a crap load of sds, and your account dinged. I have never held options through expiration, I only trade options to take advantage of the leverage. If you are in the money( sds over 24) in the next couple days, I would sell them before the exp. date. my opinion. by the way, if you are out of the money they expire worthless, so get the profit when you can.

    1. I discovered a couple of days ago that if you delete all text from a comment (and press enter) whilst it is still editable, it removes the comment completely.

      Can be quite handy in a fast moving market! πŸ™‚

  14. I think it was yesterday that Lara gave us her strategy to go short on this market. It was to watch for a break below the upward sloping channel with an hourly bar below and not touching the bottom channel line. Then watch for a retest of that broken trend line. When the SPX moves back up to that line, enter short positions. This is the same strategy employed at the last top before the move to 1812. It worked well with a very small risk.

    I mention it because we are basically at that point now, SPX touched the line and moving down from 1914 to 1905 already.

      1. It could be, Thomas. I am looking for the close below 1873. If that happens, I will have much more confidence. But first we need to take out 1897.

  15. If we are in a third wave down, the SDS 24 strike calls expiring this Saturday are horribly mis-priced at 7 cents. The banksters are screwing up even the market makers!
    It will be interesting to see where they are trading at the end of the day… πŸ™‚ πŸ™‚ πŸ™‚

  16. 1511 target is right on the money and also puts the upward push for minuette two in a new light. That is the area from which SPX broke from a triple top back in 2013 and the area from which I think we will see the next serious bounce. The end of a possible primary one will no doubt over-shoot it to the downside before a furious rally ensues. It’s going to be a blast riding that one back up. Probably a 20 bagger trade on volatility also available at that time. My only question is whether we reach that target via an extended fifth down or an intermediate three then five down. I am still leaning toward the latter since I think a still to come intermediate five would take us quite a bit beyond that target. Either way, should be fun! πŸ™‚

        1. As I look at the so far tepid action in US futures, it is occurring to me that banksters may be reckless, greedy and contemptible, but they are certainly not stupid. They can look at charts and indicators, and analyze historical data just like the rest of us. I do not think they are so clueless as to think they can ultimately eliminate the business cycle entirely and control price action in the markets. I think what they are now attempting to do is forestall an all-out crash, and instead have a “managed decline”. I believe it is their hope that constantly intervening in the market to arrest steep declines will result in a graduated fall that will deter all-out panic by the investing crowd. In a way that is actually what has been happening when you look at how market breadth has stealthily deteriorated over the last twelve months. I think one way they have instituted this game plan is by juicing high flying stocks in the indices and convincing the crowd to pile into these same high flyers. It is really incredible considering the terrible market breadth that the indices are still trading at these levels- they are being held up by a relatively few index members. What do you think is going to happen when the crowd suddenly wakes up to what is happening and stampede for the exits en masse from these inflated so-called high-flyers? We had a foretaste last August. The very thing these erstwhile banksters have been trying to avoid, is going to sneak up and bite them squarely in the you-know-where…be prepared…be positioned, it is probably going to happen faster and more violently than a lot of us could ever have expected…Grand Super Cycle Musings to be sure… πŸ™‚

          1. I agree entirely Verne.

            And as the Shanghai index shows us when governments and banks interfere they still cannot change the outcome.

            If they interfere to create deeper bounces then we should take it as an opportunity. And thank them.

            But they can’t stop it from falling.

Comments are closed.