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Downwards movement was expected. Price has moved sideways to print a red daily candlestick.

Summary: The target for a third wave is met and the structure is complete. If price keeps rising, then use the classic target at 2,448. This target is very close to a new Elliott wave target (alternate wave count) at 2,451.

At this stage, a new low now below 2,418.71 would provide strong price indication that a deeper pullback has begun. The target range is 2,418.71 to 2,403.62.

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 a complete structure on the hourly chart and has reached a common Fibonacci ratio to intermediate wave (1). It may be complete here.

Intermediate wave (4) may not move into intermediate wave (1) price territory below 2,398.16.

Intermediate wave (4) may end within the price territory of the fourth wave of one lesser degree. Minor wave 4 has its range from 2,418.71 to 2,403.62.

Copy the Elliott channel over to the hourly chart.


S&P 500 hourly 2017
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Within intermediate wave (3), there are Fibonacci ratios between all three actionary waves of minor waves 1, 3 and 5. Intermediate wave (3) also exhibits a Fibonacci ratio to intermediate wave (1).

Add a small channel about minor wave 5. This channel is breached today, but only by sideways movement and not clear downwards movement. At this stage, this sideways movement looks very much like a small consolidation within an ongoing upwards trend. For this reason an alternate is provided below.

Intermediate wave (1) lasted three days. Intermediate wave (2) lasted 16 days. Intermediate wave (3), if it is over, would have lasted 10 days. Intermediate wave (4) may last about eight or 13 days.


S&P 500 hourly 2017
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At the hourly chart level, this is how intermediate wave (3) would have the best look.

It is possible that intermediate wave (3) is not over and may not exhibit a Fibonacci ratio to intermediate wave (1).

Within intermediate wave (3), there would be no Fibonacci ratio between minor waves 3 and 1. This makes it more likely that minor wave 5 should exhibit a Fibonacci ratio to minor wave 1. Minor wave 3 is shorter than minor wave 1, so minor wave 5 has a limit of no longer than equality with minor wave 3 at 2,172.44 because minor wave 3 cannot be the shortest wave.

This alternate sees good alternation between the zigzag of minor wave 2 and a possible small triangle of minor wave 4.

Minor wave 4 may not move into minor wave 1 price territory below 2,418.71. Invalidation of this alternate would add substantial confidence to the main wave count.


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 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 be just beyond the common range of 1 to 1.38 the length of minor wave A.

The target for minor wave C is recalculated.

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.



S&P 500 weekly 2017
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On Balance Volume gives the most recent signal as a weak bearish divergence with price.

Volume is bearish. RSI divergence is bearish. ADX at extreme is bearish.

MACD is now bullish.

Although this chart is bearish, we have been here before. The reality is price keeps rising although indicators are bearish. This bearishness should tell traders to protect long positions with stops, and be aware the market is currently vulnerable to a pullback. It does not tell traders to enter short here; that would be premature.


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. If price continues a little higher this week, then use this target for long positions.

The balance of volume for Monday was down and the candlestick closed red. Downwards movement during the session did not have support from volume. This looks like a small pause within an upwards trend and not like the start of a deeper pullback. This supports the alternate hourly wave count.

ADX is bullish. MACD is bullish. Bollinger Bands are bullish.

ATR indicates weakness within this trend. RSI divergence indicates weakness.

Stochastics no longer indicates weakness and may remain extreme for long periods of time during a trending market.


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 no divergence today between price and VIX to indicate weakness.


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.

There is no divergence for the short term at this time to indicate weakness.

At the end of last week, it is noted that the mid caps and small caps have failed to make new all time highs. There is some internal weakness with increasing selectivity in this market.


At the end of last week, Nasdaq, DJIA and the S&P500 have all made new all time highs. DJT has failed to confirm an ongoing bull market because it has not yet made a new all time high. However, at this stage that only indicates some potential weakness within the ongoing bull market and absolutely does not mean that DJT may not yet make new all time highs, and it does not mean a bear market is imminent.

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 @ 11:42 p.m. EST.