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A new high above 2,367.79 confirmed the alternate hourly wave count, which expected more upwards movement with an increase in momentum to a target at 2,397. The high for the day was 2,400.98.

Summary: The picture is very bullish. Volume supports the strong upwards movement in price today. The breakaway gap may offer support. Move stops up to protect profits. The new target is at 2,424 and the limit is at 2,450.76.

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
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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 is now close to complete.


S&P 500 Daily 2017
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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 no Fibonacci ratio to minor wave 1. It is more likely that minor wave 5 will exhibit a Fibonacci ratio to either of minor waves 3 or 1.

Minor wave 2 was a deep 0.77 zigzag lasting three days. Minor wave 4 may be a complete single flat correction. There is perfect alternation between minor waves 2 and 4 and they have better proportion now on the daily chart.

Intermediate wave (5) has so far lasted 26 days. At this stage, an expectation of a Fibonacci 34 days total for intermediate wave (5) looks reasonable, so it may now continue for another 8 days or sessions.

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.

Minor wave 4 may be still incomplete. It may not move into minor wave 1 price territory below 2,300.99.


S&P 500 hourly 2017
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Another breakaway gap should provide support while the trend continues.

There is no Fibonacci ratio between minute waves iii and i.

Minor wave 5 has passed equality with minor wave 1 and the structure is incomplete. A new target is calculated using the next likely Fibonacci ratio to minor wave 1.

Minute wave iv may not move into minute wave i price territory below 2,371.54.



S&P 500 weekly 2017
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There are now eight green weekly candlesticks in a row. A larger correction may be expected soon, but not quite yet.

There has been some decline in volume over the last three weeks. This trend is showing early signs of weakening.

On Balance Volume remains very bullish.

RSI is overbought, but in a bull market this can remain extreme for a reasonable period of time. If it begins to exhibit divergence with price at the weekly chart level, then a larger correction may be expected to begin. There is no divergence at this time.

This trend is not yet extreme.


S&P 500 daily 2017
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This chart looks very bullish: Divergence (which was only slight) between price and RSI has disappeared; ADX is no longer as extreme; ATR shows some increase today; On Balance Volume remains very bullish; Bollinger Bands are bullish.

A pullback may come soon, but not yet. There is still room for this trend to continue and at this stage there is no indication it has ended.

The only very slight bearishness today may be the slightly longer upper wick on the daily candlestick.


VIX daily 2017
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Normally, volatility should decline on rising price. There is double multi day divergence now between price and inverted VIX. This is bearish.

Either VIX is now decoupled from this market, or this persistent divergence will be resolved by primary wave 3 ending sooner than expected and primary wave 4 beginning very strongly. This divergence signals traders to be very cautious; assume the trend remains the same, but if entering the trend be aware for the potential here of a swift drop in price and use stops accordingly. Risk no more than 1-3% of equity.

Bullish divergence between price and inverted VIX yesterday has been followed by a strong upwards day. It may be followed by one more before it is resolved, or it may be resolved here.

Recent strong bearish divergence between price and VIX has absolutely not been followed by any reasonable downwards movement. It is considered to have failed, for the short term.


AD Line daily 2017
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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.

Bullish divergence noted yesterday has been followed by a strong upwards day. This may be resolved here, or it may yet be followed by at least one more upwards day before it is resolved.

No new divergence is noted today. The new high in price was matched by a new high for the AD line. The rise in price has support from increasing market 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 @ 07:33 p.m. EST.