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A new all time high at the open gap up invalidated the alternate Elliott wave count providing confidence in the main Elliott wave count. The target remains the same.

Summary: The target is at 2,440 (Elliott wave target) in the first instance, and may be as high as 2,460 (classic technical analysis target). Expect upwards movement to continue. Corrections, if they appear on the daily chart, are an opportunity to add to long positions.

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.

MACD may be used to assist with a wave count, to find the end and middle of a third wave of an impulse. The end of the third wave most often corresponds with the strongest momentum from MACD, and the middle of that third wave most often corresponds with the strongest portion of the histogram on MACD. This main wave count does not have as good a fit with MACD as the alternate published below.

However, when looking at the structure on a monthly time frame, intermediate waves (2) and (4) both show up with red monthly candlesticks and this labelling on that time frame has a better look than the alternate.


S&P 500 Daily 2017
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Intermediate 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 wave 1 is complete. Minor wave 2 should be complete.

Within minor wave 3, no second wave correction may move beyond the start of its first wave below 2,353.29.

The structure of intermediate wave (5) on the daily chart does not look complete. So far it looks like a possible three up. Minor wave 3 still needs to complete, then minor waves 4 and 5. This may last another few weeks.


S&P 500 hourly 2017
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Minor wave 3 has now moved beyond the end of minor wave 1, meeting a core Elliott wave rule.

At this stage, it looks increasingly like minor wave 3 may be a quick upwards movement with brief shallow corrections along the way.

There are multiple ways now to label this upwards movement. This labelling is chosen because it fits with MACD: the strongest momentum so far is today’s high, and this may be minute wave iii over here or very soon.

Within minute wave iii, the strongest portion of the histogram is labelled as the middle of minuette wave iii.

Minute wave iii would reach 4.236 the length of minute wave i if it continued a little higher tomorrow to end about 2,415 *edit: 2,423.

Ratios within minute wave iii are: there is no Fibonacci ratio between minuette waves (i) and (iii), and minuette wave (v) is now just 0.76 short of equality in length with minuette wave (iii).

If this labelling is correct, then the invalidation point is at 2,368.58. Minute wave iv may not move into minute wave i price territory.

Minute wave iv should be expected to be a very shallow correction, and may remain contained within the best fit channel.


S&P 500 Weekly 2017
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This alternate has been published before. It does not diverge at this stage in terms of expected direction or targets to the main wave count, but it will diverge in the future.

Within cycle wave V, this labelling fits better with MACD.

It is possible that the final wave of primary wave 5 is now underway to complete cycle wave V, Super Cycle wave (V), and Grand Super Cycle wave I.

Within primary wave 5, if intermediate wave (2) continues further sideways as a more time consuming correction such as a double combination, then it may not move beyond the start of intermediate wave (1) below 2,332.51.


S&P 500 Daily 2017
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Structure at the daily chart level is exactly the same at this stage for both wave counts. The next target at 2,440 is also exactly the same.

As of tomorrow only the weekly chart will be published for this alternate.



S&P 500 weekly 2017
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Last weekly candlestick is an outside week with the balance of volume downwards. Volume shows an increase, so there was support for the fall in price during the week.

The long lower wick on the last weekly candlestick is bullish. Support right at the upper edge of the triangle trend line is bullish. This looks like a typical breakout from the large symmetrical triangle followed by a curve back to test support at prior resistance.

So far this all supports the main wave count more than the alternate.

However, On Balance Volume gives a reasonable bearish signal last week supporting the alternate wave count. Long standing members are aware that I give a lot of weight to On Balance Volume with trend lines because it works very well. For this reason I would judge the alternate wave count to have a fairly reasonable probability.

Divergence with the new all time highs last week from price and RSI is also fairly bearish. This supports the alternate wave count.


S&P 500 daily 2017
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Price has broken above prior resistance about 2,405 on an upwards day with an increase in volume and a gap. This looks like an upwards breakout with a break away gap. If the prior consolidation is taken to be at its widest of about 55 points, then a target following the break out may be about 2,460.

Price may continue to sit about the upper edge of Bollinger Bands for several days in a row.

Volume, On Balance Volume, ADX, and MACD are all today bullish. Some widening of Bollinger Bands may be beginning again, and this is also slightly bullish.

Divergence between price and RSI can persist for reasonable periods of time and may develop further. It indicates weakness in upwards movement, but it cannot pin point a trend change.

ATR also indicates weakness.


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.

There is hidden mid term bearish divergence between price and VIX today.


AD Line daily 2017
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With the last all time high for price, the AD line also made a new all time high. Up to the last high for price there was support from rising market breadth.

There is normally 4-6 months divergence between price and market breadth prior to a full fledged bear market. With no divergence yet at this point, any decline in price should be expected to be a pullback within an ongoing bull market and not necessarily the start of a bear market.

Bearish divergence noted up to yesterday has now disappeared. It is considered to have failed to predict price movement.

There is no divergence between price and breadth today; both are making new all time highs. Upwards movement in price has support from rising market breadth.


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 @ 11:33 p.m. EST.