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A new all time high was expected from last analysis.

The Elliott wave count remains the same and the weekly technical analysis still sounds a strong warning.

Summary: The upwards trend has most likely resumed, but a strong warning from ADX at the weekly chart level means members should keep stops on long positions tight and be prepared to take profits more quickly than usual. Stops may be set just below 2,389.38 at this time. The profit target remains at 2,469.

Always remember my two Golden Rules for trading:

1. Always use a stop.

2. Invest only 1-5% of equity on any one trade.

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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This wave count sees the middle of primary wave 3 a stretched out extension, which is the most typical scenario for this market.

Primary wave 3 may be incomplete. A target is now calculated for it on the daily chart.

There is alternation within primary wave 3 impulse, between the double zigzag of intermediate wave (2) and the possible triangle or combination of intermediate wave (4).

When primary wave 3 is a complete impulse, then a large correction would be expected for primary wave 4. This may be shallow.

Thereafter, primary wave 5 may be expected to be relatively short, ending about the final target at 2,500.


S&P 500 Daily 2017
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Primary wave (4) may be a complete regular contracting triangle. It may have come to a surprisingly swift end with a very brief E wave.

There is already a Fibonacci ratio between intermediate waves (3) and (1). This makes it a little less likely that intermediate wave (5) will exhibit a Fibonacci ratio to either of intermediate waves (1) or (3); the S&P often exhibits a Fibonacci ratio between two of its three actionary waves but does not between all three.

Within intermediate wave (5), minor waves 1 and now 2 look to be complete.

Within minor wave 3, no second wave correction may move beyond its start below 2,379.75.

With a new all time high at the open of today’s session, it may be possible that primary wave 3 could be over. However, the structure would only look right if the start of intermediate wave (5) was lower down. To see intermediate wave (4) ending earlier would mean the triangle trend lines would look wrong.


S&P 500 hourly 2017
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Minor wave 2 may have competed as a double combination: zigzag – X – triangle.

So far minute waves i and ii may be complete within minor wave 3. Minute wave iii may only subdivide as an impulse. So far within minute wave iii, minuette waves (i) through to (iv) may be complete. Within minuette wave (v), no second wave correction may move beyond the start of its first wave below 2,393.92.

A best fit channel is drawn about this upwards movement. It may continue to show where price finds support and resistance along the way up as minor wave 3 completes.


S&P 500 Daily 2017
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What if intermediate wave (4) was not a complete triangle but is still unfolding as a double combination?

Double combinations are very common structures. This would still provide perfect alternation in structure with the double zigzag of intermediate wave (2). Although double zigzags and double combinations are both labelled W-X-Y, they are very different structures and belong to different groups of corrections.

The purpose of combinations is the same as triangles, to take up time and move price sideways. Intermediate wave (2) lasted 58 days. So far intermediate wave (4) has lasted 48 days. If it continues for another one to two weeks, it would still have excellent proportion with intermediate wave (2).

This alternate wave count now has some support from classic technical analysis, particularly extreme ADX at the weekly chart level. If price suffers a quick reversal, then this would be the new main wave count.


S&P 500 Hourly 2017
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Minuette wave (b) will also fit as a double zigzag. This does not have as good a look as the combination idea on the main wave count though. Double zigzags normally have a clear slope against the prior trend but this one moves sideways.

Minute wave b may be over here, or it may continue higher. Only a new high above 2,427.77 should see this alternate wave count discarded.

When minute wave b is complete, then a five wave structure downwards for minute wave c would be expected to most likely take price at least slightly below the end of minute wave a at 2,322.25, so that a truncation is avoided.

If the main wave count is invalidated with a new low tomorrow below 2,393.32, then a little confidence may be had in this alternate.



S&P 500 weekly 2017
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Volume for the last three upwards weeks is all stronger than the two downwards weeks prior. There is more support for upwards movement than downwards. This is bullish.

The only concern here is ADX is extreme. Within this bull market, beginning in March 2009, this has happened at the weekly chart level on four occasions: January 2010, the end of February 2011, early June 2013, and late July 2014. On each occasion it was immediately followed by three to four weeks of downwards movement.

Extreme ADX at the weekly chart level supports the alternate Elliott wave count.

Very bullish On Balance Volume supports the main Elliott wave count.


S&P 500 daily 2017
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The last two sessions have seen upwards movement with higher highs and higher lows but with much lighter volume than the prior consolidation. If this is an upwards breakout from the bull flag pattern, it is suspicious because it does not have support from volume. Members are advised to manage risk on long positions and keep stops tight.

Bullish On Balance Volume does support the main Elliott wave count.

Some new weak bearish divergence with RSI supports the alternate Elliott wave count.


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.

It is noted that there are now six multi day instances of bullish divergence between price and inverted VIX, and all have been followed so far by at least one upwards day if not more. This signal seems to again be working more often than not. It will again be given some weight in analysis.

Single day bearish divergence between price and VIX noted in last analysis has been followed by an upwards day. It is considered to have failed in this instance.

There is no new divergence today. Price has made a new all time high with a decline in volatility.


AD Line daily 2017
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Short / mid term bearish divergence noted in last analysis has been followed by an upwards day, so it is considered to have failed.

While price moved higher the AD line declined. The rise in price did not have support from a rise in market breadth. This is single day bearish divergence and indicates weakness in price today.


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

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: 7,029.41.

S&P500: 2,083.79.

Nasdaq: 5,034.41.

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

This analysis is published @ 08:43 p.m. EST.