Select Page

Upwards movement continues as expected.

A very bearish alternate (which was judged to have a very low probability) has been invalidated today. This adds confidence to the main Elliott wave count and the targets.

Summary: The short term target at 2,338 has almost been met. Very short term trades may now take profit. Traders with a longer horizon may like to hold on until the mid term target at 2,382 is met. Price should find strong support about 2,300 now. The invalidation point is today moved up to 2,300.99.

The next pullback for minor wave 4 may be relatively shallow and must remain above 2,300.99. It is possible it may begin tomorrow. If it does, then it may last about three or five days.

New updates to this analysis are in bold.

Last monthly and weekly charts are here. Last historic analysis video is here.



S&P 500 Weekly 2017
Click chart to enlarge.

Cycle wave V is an incomplete structure. Within cycle wave V, primary wave 3 may be relatively close to completion.

When primary wave 3 is complete, then the following correction for primary wave 4 may not move into primary wave 1 price territory below 2,111.05.

Primary wave 2 was a flat correction lasting 47 days (not a Fibonacci number). Primary wave 4 may be expected to most likely be a zigzag, but it may also be a triangle if its structure exhibits alternation. If it is a zigzag, it may be more brief than primary wave 2, so a Fibonacci 21 sessions may be the initial expectation. If it is a triangle, then it may be a Fibonacci 34 or 55 sessions.

Primary wave 3 at this stage though is incomplete and may continue to move price higher.


S&P 500 Daily 2017
Click chart to enlarge.

Intermediate wave (4) is a complete combination: zigzag – X – flat. It would have been even in duration with intermediate wave (3), both lasting 26 days.

Intermediate wave (3) is shorter than intermediate wave (1). One of the core Elliott wave rules states a third wave may never be the shortest wave, so this limits intermediate wave (5) to no longer than equality in length with intermediate wave (3) at 2,450.76.

Minor wave 3 has moved beyond the end of minor wave 1, meeting the rule. Minor wave 3 moved higher today to almost meet the target for it, which was at 2,338. Minor wave 3 now is just 0.77 points short of 1.618 the length of minor wave 1.

Minor wave 2 was a deep 0.77 zigzag lasting three days. Minor wave 4 may exhibit alternation as a flat, triangle or combination and may last about a Fibonacci three or five days. It may not move into minor wave 1 price territory below 2,300.99.

Minor wave 4 may find support now at the upper cyan trend line. This may assist to force it to be very shallow.

Intermediate wave (5) has so far lasted sixteen days. It may be expected to be shorter both in length and duration compared to intermediate wave (3). At this stage, an expectation of a Fibonacci 21 days total for intermediate wave (5) looks reasonable, so it may now continue for another five days or sessions. This is starting to look a bit too brief now though. It may continue to total a Fibonacci 34 sessions.

Price has now broken above the cyan line. This line may now offer support.

The proportion here between intermediate waves (2) and (4) is acceptable. There is alternation. Both are labelled W-X-Y, but double zigzags are quite different structures to double combinations.


S&P 500 hourly 2017
Click chart to enlarge.

Intermediate wave (5) must subdivide as a five wave structure, either an impulse or an ending diagonal. It is not possible to eliminate either option at this stage, but it does look very much like an impulse.

Within intermediate wave (5), minor waves 1 and 2 may be complete.

I will have two hourly wave counts for you today.

This first hourly wave count looks at the possibility that minor wave 3 is over, close to 1.618 the length of minor wave 1. Minor wave 3 looks like a complete five wave impulse.

This wave count has a better look at the hourly chart level than the second chart below. I would judge this first hourly wave count to have about a 60% probability.

Minor wave 2 was a relatively quick and deep zigzag. Given the guideline of alternation, minor wave 4 should be expected to most likely be a more time consuming and shallow flat, triangle or combination and may total a Fibonacci three or five days if it exhibits a Fibonacci duration.

A new low below 2,322.17 would invalidate the second hourly chart below and provide some confidence in this first chart. A clear breach of the lower edge of the pink channel would confirm an end to minor wave 3. At that stage, minor wave 4 may be underway.

If minor wave 4 is shallow and ends close to the 0.382 Fibonacci ratio about 2,311, then it would remain well above minor wave 1 price territory at 2,300.99.


S&P 500 hourly 2017
Click chart to enlarge.

This second hourly chart looks at the possibility that minor wave 3 is not over and may extend. The target assumes a Fibonacci ratio for minute waves v and i, but this target would see minor wave 3 exhibit no Fibonacci ratio to minor wave 1.

Within minor wave 3, there is already a Fibonacci ratio of equality between minute waves i and iii. The S&P often exhibits a Fibonacci ratio between two of its three actionary waves within an impulse and rarely does it exhibit Fibonacci ratios between all three. The target does not have a good probability; it is a rough guide only.

If minute wave v continues, then within it no second wave correction may move beyond its start at 2,322.17.



S&P 500 weekly 2017
Click chart to enlarge. Chart courtesy of

Overall, price is moving higher on increasing volume. Last week sees a decline in volume from prior week, but volume is still stronger than the first three weeks of upwards movement.

On Balance Volume gave a bullish signal with a break above the purple resistance line. This line may now offer support and assist to halt any fall in price from being too deep.

RSI is not yet overbought at the weekly chart level. There is room for price to rise further.

ADX indicates an upwards trend, and ADX has a long way to go before it becomes extreme.


S&P 500 daily 2017
Click chart to enlarge. Chart courtesy of

An increase in volume today supports upwards movement. Price has now sat at the upper edge of Bollinger Bands for four days. A pullback will happen, and is getting closer. But price could continue to sit at the upper edge of Bollinger Bands for another one to very few days yet.

The last two gaps are now labelled as measuring gaps. These often turn up about the mid way point in a trend. A target using the first gap would be about 2,331, but this has been met and passed. A target using the second gap would be about 2,348. This may now be used.

ADX still indicates a young upwards trend. There is as yet no divergence between price and Stochastics or RSI while these are extreme. Expect the trend to continue until indicated otherwise.

Corrections within the trend offer an opportunity to join the trend. Do not trade against the trend. The trend is your friend.


VIX daily 2017
Click chart to enlarge. Chart courtesy of

There are a few instances of multi day divergence between price and inverted VIX noted here. Bearish divergence is blue. Bullish divergence is yellow. It appears so far that divergence between inverted VIX and price is mostly working to indicate short term movements spanning one or two days. While this seems to be working more often than not, it is not always working. As with everything in technical analysis, there is nothing that is certain. This is an exercise in probability.

Single bearish divergence between price and inverted VIX has failed. There is still mid term divergence between price and inverted VIX, but this has proven to be reasonably unreliable recently. Shorter term divergence appears to be more reliable. This mid term divergence supports the first hourly chart over the second.


AD Line daily 2017
Click chart to enlarge. Chart courtesy of

There is no short nor mid term divergence today between price and the AD line. The rise in price to a new high today was accompanied by a corresponding new high in the AD line. The rise in price has support from a rise in market breadth. Lowry’s OCO AD line also shows new highs along with price. Normally, before the end of a bull market the OCO AD line and the regular AD line should show divergence with price for about 4-6 months. With no divergence, this market has support from breadth.


The DJIA, DJT, S&P500 and Nasdaq have made new all time highs in December of 2016. This confirms a bull market continues.

This analysis is published @ 7:14 p.m. EST.