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Upwards movement was expected to continue. The targets remain the same.

Summary: The target is at 2,440 (Elliott wave target) to 2,448 (classic analysis target). Expect upwards movement to continue. Corrections are an opportunity to add to long positions.

In the short term, a new low now below 2,398.16 would indicate a deeper pullback may be underway.

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 has a better fit with MACD and so may have a higher probability.

Primary wave 3 may be complete, falling short of 1.618 the length of primary wave 1 and not exhibiting a Fibonacci ratio to primary wave 1. There is a good Fibonacci ratio within primary wave 3.

The target for cycle wave V will remain the same, which has a reasonable probability. At 2,518 primary wave 5 would reach 0.618 the length of primary wave 1. If the target at 2,500 is exceeded, it may not be by much.

There is alternation between the regular flat correction of primary wave 2 and the triangle of primary wave 4.

Within primary wave 3, there is alternation between the double zigzag of intermediate wave (2) and the double combination of intermediate wave (4).

If primary wave 4 is over and primary wave 5 is underway, then within primary wave 5 intermediate wave (2), if it moves lower, may not move beyond the start of intermediate wave (1) below 2,344.51 (this point is taken from the triangle end on the daily chart).


S&P 500 Daily 2017
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Primary wave 5 must complete as a five wave motive structure, either an impulse (more common) or an ending diagonal (less common). So far, if this wave count is correct, it looks like an impulse.

Intermediate wave (3) is now far enough developed to move the invalidation point up. If intermediate wave (4) begins shortly, it may not move into intermediate wave (1) price territory below 2,398.16.

Intermediate wave (3) may only subdivide as an impulse structure.


S&P 500 hourly 2017
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A best fit channel is again drawn about intermediate wave (3). The first trend line is drawn from the start at the low for the 18th of May to the low of minor wave 4. A parallel copy is placed upon the high of minor wave 3. Now that minor wave 4 is over, this channel might show when intermediate wave (3) is over when price clearly breaches it with downwards movement.

A smaller Elliott channel is drawn about minor wave 5. So far the structure of minor wave 5 looks incomplete.

Because minor wave 3 exhibits a Fibonacci ratio to minor wave 1, minor wave 5 may not exhibit a Fibonacci ratio to either of minor waves 3 or 1. The target is left calculated at intermediate degree.

Within minor wave 5, the upcoming correction for minute wave iv should be brief and shallow. It may not move back into minute wave i price territory below 2,411.13.


S&P 500 Weekly 2017
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This weekly chart has been published with a slight variation before.

It is still possible that intermediate wave (4) is incomplete and may be continuing as a very common expanded flat correction.

This weekly wave count expects a slow end to Grand Super Cycle wave I at the target at 2,500. Once intermediate wave (4) is over, then intermediate wave (5) would be expected to move above the end of intermediate wave (3) at 2,400.98 to avoid a truncation; it need not make a new all time high (but would be likely to do so).

Thereafter, another multi week sideways correction for primary wave 4 may unfold that must remain above primary wave 1 price territory, which has its extreme at 2,111.05.

Finally, a last upwards wave for primary wave 5 towards the target at 2,500 should show substantial weakness.

This wave count allows for the target at 2,500 to be reached possibly in October.

When looking at upwards movement so far on the monthly chart, the corrections of intermediate waves (2) and (4) show up. This is how the labelling fits best at that time frame.

It is also still possible that the expanded flat correction could be labelled primary wave 4 as per the alternate published in yesterday’s analysis here.


S&P 500 Daily 2017
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Expanded flat corrections are very common structures. They subdivide 3-3-5. Within this one, minor wave B would now still be within the common range of 1 to 1.38 the length of minor wave A.

The target now calculated for minor wave C assumes that minor wave B is over at today’s high. If minor wave B moves higher, then this target must also move correspondingly higher.

The target calculated expects price to find strong support at the lower edge of the black Elliott channel, which is copied over from the weekly chart.

This alternate wave count expects and imminent very strong fall for price to last at least about three weeks. But we should always assume the trend remains the same until proven otherwise. In this instance, that means assume the main wave count is correct and trade accordingly, while price remains above 2,398.16.

Only if price now breaks below 2,398.16 will this wave count be given serious consideration.



S&P 500 weekly 2017
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This weekly chart supports the alternate wave counts over the main wave count.


S&P 500 daily 2017
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If the widest part of the symmetrical triangle is taken from the high of the 1st of March to the low of the 27th of March, then a measured rule target would be at 2,448. This is just 8 points above the Elliott wave target.

Today’s candlestick is very bullish. Some increase in volume is bullish. ADX is bullish. ATR may be beginning to widen, but one day is not enough to have confidence in this. RSI allows for further room for price to rise. Stochastics could remain overbought and develop multiple divergence before price turns. MACD is bullish. Bollinger Bands are bullish.

Divergence between price and RSI now spans months; this is bearish. Volume for recent downwards days is stronger than upwards days; this is still bearish. Declining ATR as price moved higher was bearish.

Assume the trend remains the same while price remains above support. There should now be very strong support about 2,400, which aligns nicely with the Elliott wave invalidation point for the bullish wave count at 2,398.16.


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.

Price moved strongly higher to new all time highs today, but inverted VIX did not make new highs. This divergence is bearish and favours the alternate Elliott wave count. Lately, this bearish divergence has been working more often than it fails, as evidenced in this chart, but it does not always work.


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.

Price made new all time highs today and the AD line also made new all time highs. This rise in price is supported by a rise in market breadth; it has some internal strength. This supports the main Elliott wave count.


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 @ 09:47 p.m. EST.