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Price remains range bound again today. The longer price remains coiled between resistance and support, the closer and more violent the breakout will be.

Summary: The main wave count expects an upwards breakout. The alternate expects a downwards breakout. There is a little more support for the alternate, but not enough for reasonable confidence, even though there is more support today for the alternate from divergence between price and the AD line and VIX.

Because the picture is reasonably neutral, it would be my advice at this time to wait for a price breakout or a signal from On Balance Volume before having confidence in the next trend.

If price can close above 2,370 on an upwards day with an increase in volume, then the target is at 2,455. If price can close below about 2,340 on a day with stronger volume, then the target is a range of 2,282 – 2,234.

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 incomplete or it may be complete (alternate wave count below).

Primary wave 4 may not move into primary wave 1 price territory below 2,111.05.


S&P 500 Daily 2017
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All subdivisions are seen in exactly the same way for both daily wave counts, only here the degree of labelling within intermediate wave (3) is moved down one degree.

This wave count expects the just completed correction is minor wave 4. Within minor wave 5, minute wave ii may not move beyond the start of minute wave i below 2,322.25.

Minor wave 4 is a little below the fourth wave of one lesser degree. Because it has now clearly breached an Elliott channel drawn using the first technique, the channel is now redrawn using Elliott’s second technique. There is good alternation between the very shallow combination of minor wave 2 and the deeper zigzag of minor wave 4.

A target for minor wave 5 is calculated.

The Elliott channel about minor wave 4 is drawn on the daily chart. The upper edge may be providing some resistance. Once price can break above this channel, then upwards momentum may build.

Minor wave 3 is shorter than minor wave 1. So that the core Elliott wave rule stating a third wave may not be the shortest is met, minor wave 5 is limited to no longer than equality in length with minor wave 3.


S&P 500 hourly 2017
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Labelling within minute wave ii is today changed.

Minute wave ii may be an incomplete double zigzag, with minuette wave (x) now a completed running contracting triangle. While part of the triangle makes a new price extreme beyond the start of minuette wave (w), at its end the triangle effects a 0.73 retracement of minuette wave (w). This is not a typical look for an X wave within a double zigzag as they are more often brief and shallow.

Minute wave ii may continue sideways as a double combination. Minuette wave (y) may be a flat correction. If this is the case, then the target would be too low.

The target for a double zigzag is almost the same as yesterday’s target.

Minute wave ii may find strong support at the lower edge of the pink Elliott channel copied over from the daily chart, if it moves below the target.

Minute wave ii may not move beyond the start of minute wave i below 2,322.25.


S&P 500 Daily 2017
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The subdivisions of upwards movement from the end of intermediate wave (2) are seen in the same way for both wave counts. The degree of labelling here is moved up one degree, so it is possible that primary wave 3 could be over.

Primary wave 2 was a flat correction lasting 47 days (not a Fibonacci number). Primary wave 4 may be unfolding as a double zigzag. It may total a Fibonacci 34 or 55 sessions.

Within double zigzags, the X wave is almost always brief and shallow. There is no rule stating a maximum for X waves, but they should not make a new price extreme beyond the start of the first zigzag in the double.

X waves within combinations may make new price extremes (they may be equivalent to B waves within expanded flats), but in this instance primary wave 4 would be unlikely to be a combination as it would exhibit poor alternation with the flat correction of primary wave 2.

For this alternate wave count intermediate wave (X) may now be complete. Both wave counts expect downwards movement: this alternate wave count to new lows for a second zigzag, which would be labelled intermediate wave (Y), and the main wave count for a brief pullback labelled minute wave ii. How low the next wave goes should indicate which wave count is correct. A new low now below 2,322.25 would see the main wave count discarded and this alternate confirmed.

If a new high above 2,400.98 is seen, then this alternate would be discarded.

The correction for primary wave 4 should be a multi week pullback, and it may not move into primary wave 1 price territory below 2,111.05.



S&P 500 weekly 2017
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Last week completes an upwards week with a higher high and a higher low, but the week closed red and the balance of volume was down. With some increase in volume last week, the support for downwards movement during the week is bearish.

On Balance Volume remains tightly constrained, not yet offering a signal.

ADX remains extreme. This is most often followed by three or four downwards weeks, but not always. This favours the alternate daily wave count.


S&P 500 daily 2017
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Price remains range bound with resistance about 2,370 and support about 2,340. During this range bound period it remains downwards days which have strongest volume, suggesting a downwards breakout is more likely than upwards.

Bollinger Bands, ADX and ATR agree that price is consolidating.

On Balance Volume at the daily chart level has not yet given a new signal. It is at the new support line while price consolidates. On Balance Volume is also range bound.

RSI and Stochastics are both neutral.

MACD and volume are bearish.

Overall, this analysis is neutral to bearish. It offers a little more support to the alternate Elliott wave count than the main Elliott wave count. The bottom line is price or On Balance Volume need to break out and present a signal before confidence may be had in the next direction for a trend.


VIX daily 2017
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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.

Bearish divergence and bullish divergence spanning a few short days used to be a fairly reliable indicator of the next one or two days direction for price; normally, bearish divergence would be followed by one or two days of downwards movement and vice versa for bullish divergence.

However, what once worked does not necessarily have to continue to work. Markets and market conditions change. We have to be flexible and change with them.

Recent unusual, and sometimes very strong, single day divergence between price and inverted VIX is noted with arrows on the price chart. Members can see that this is not always proving useful in predicting the next direction for price.

Divergence will continue to be noted, particularly when it is strong, but at this time it will be given little weight in this analysis. If it proves to again begin to work fairly consistently, then it will again be given weight.

There is strong single day divergence today with price and inverted VIX. Price today made a higher high and a higher low, the definition of upwards movement, even though it closed neutral. However, inverted VIX shows volatility strongly increased while price moved slightly higher. This indicates weakness within price and is interpreted as bearish. It will be given a little weight today because it is so strong.


AD Line daily 2017
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The rise in price has support from a rise in market breadth. Lowry’s measures of market breadth do not at this stage warn of an impending end to this bull market. They show an internally healthy bull market that should continue for at least 4-6 months.

There is new short term bearish divergence today with price and the AD line: the AD line made a new high above its prior high of the 6th of April, but price has failed to make a corresponding new high. This divergence indicates weakness within upwards movement from price; it is bearish.


The DJIA, DJT, S&P500 and Nasdaq continue to make new all time highs. This confirms a bull market continues.

This analysis is published @ 10:40 p.m. EST.