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Sideways movement was expected as most likely for Tuesday, but this is not what happened. Upwards movement has made a new all time high, but the session closed red.

Summary: The trend is up. Trading with the trend is the safest approach for your account. Use corrections as an opportunity to join the trend.

The short term target is at 2,490 to 2,491.

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 is identical to the alternate wave count up to the high labelled minor wave 3 within intermediate wave (5) within primary wave 3.

This wave count sees primary wave 3 as incomplete, but close to completion.

Within primary wave 3 impulse, the final wave of intermediate wave (5) is seen as incomplete. Intermediate wave (5) is subdividing as an impulse.

When intermediate wave (5) is complete, then primary wave 3 would be complete. Primary wave 4 may not move into primary wave 1 price territory below 2,111.05.

If price reaches the target at 2,500 and either the structure is incomplete or price keeps rising, then the next target would be the next Fibonacci ratio in the sequence between cycle waves I and V. At 2,926 cycle wave V would reach 1.618 the length of cycle wave I.


S&P 500 Daily 2017
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The daily chart shows only the structure of intermediate wave (5); this structure is an impulse.

Within intermediate wave (5), minor waves 1 through to 4 are now complete. The final fifth wave of minor wave 5 is underway. Within minor wave 5, minute wave iv may not move into minute wave i price territory below 2,430.98.

Minor wave 5 is extending. Within minor wave 5, minute waves ii and iv now both show up clearly at the daily chart level. This portion of the wave count has now the right look. It would still look right if minute wave iv continued sideways for another day to two, taking up a bit more time. However, volume does not support this view today. Volume suggests minute wave iv is over.

Within minute wave iii, the subdivisions of minuette waves (ii) and (iv) now look clear on the daily chart.

There is perfect alternation between the deep expanded flat of minor wave 2 and the shallow double zigzag of minor wave 4.


S&P 500 hourly 2017
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Minor wave 5 may be subdividing as an impulse so far. The middle of the third wave has the strongest upwards momentum. This wave count fits so far with MACD.

If minute wave iv is over as a quick shallow zigzag, then there is perfect alternation between minute waves ii and iv. Zigzags are quicker structures than flats, so the disproportion between them is entirely acceptable.

Minute wave v may be underway and subdividing as an impulse. Within minute wave v, minuette wave (iv) may not move into minuette wave (i) price territory below 2,472.27.

The target is widened to a small 1 point zone calculated at two degrees.

This target may still work with the higher final target at 2,500, but that is now beginning to look less likely. When primary waves 3 and 4 may be over, then the final target for primary wave 5 may be calculated at two degrees with more confidence.

If tomorrow price moves below 2,472.27, then use the second hourly chart below.


S&P 500 hourly 2017
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It is also possible that minute wave iv may not be over and may continue further sideways for another one to two days this week.

Minute wave ii was an expanded flat correction, so the least likely structure for minute wave iv would also be an expanded flat as that would offer no alternation in structure. Minute wave iv may be a triangle and still have good alternation, or a combination and still have reasonable alternation.

Both triangles and combinations are sideways movements. Lower degree Elliott wave triangles equate to pennant patterns and combinations equate to flag patterns. Both are reliable continuation patterns and should be used as opportunities to join a larger trend.

A triangle or a combination may include a new high above the start of minute wave iv at 2,477.62. Unfortunately, there is no upper invalidation point for this second hourly wave count, so no upper price point which may add confidence to the first hourly wave count.

At this stage, it still looks possible for minute wave iv to be continuing as a running contracting triangle, but strong volume for today’s upwards movement means this second wave count has a low probability. Triangles should come with declining volume, not increasing.

Minute wave iv may not move into minute wave i price territory below 2,430.98.

The alternate wave count is discarded today based upon a very low probability.



S&P 500 weekly 2017
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Volume is bullish. On Balance Volume is very bullish.

ADX is extreme and usually at the weekly chart level this quickly leads to a pullback to last two to four weeks. During the current bull market, which began in March 2009, ADX has only reached extreme on four previous occasions. On each of those occasions it was immediately followed by two weeks of downward movement in one case and four weeks of downwards movement in the other three cases.

In all four prior cases the pullback was sufficient to bring ADX down back below the directional lines and below extreme.

This time ADX has remained extreme for 17 weeks although the ADX line has not been rising for the whole time, only fluctuating. This trend is looking very stretched, but at this stage it may be better to rely upon Elliott wave structure and other indicators to tell when the next multi week pullback may begin.


S&P 500 daily 2017
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A new all time high today comes with support from volume for upwards movement.

Stochastics is now extreme and exhibits single divergence with price. However, this may continue further to develop into multiple divergence before price finds a final high. If RSI also reaches into overbought, then a trend change may be more likely.

Only ATR is indicating weakness within this upwards movement. Everything else on this chart is bullish.


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 noted in last analysis has now been followed by an upwards day. It is considered to have failed.

There is new short term bearish divergence today between inverted VIX and price: price has made a new all time high, but inverted VIX has not. This indicates that upwards movement today did not come with a corresponding decline in volatility; there is weakness today within upwards movement from price, so it may be followed by one or two downwards days to be resolved.


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. This has been so for all major bear markets within the last 90 odd years. 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 in last analysis has now been followed by an upwards day. It is considered to have failed. There is no new divergence today between price and market breadth; the new all time high for price is matched by a new all time high for the AD line.

Lowry’s measures of internal market strength and health continue to show a healthy bull market. This week has seen a further increase in internal health of the market, so we may have some confidence that this bull market shall continue.

Historically, almost every bear market is preceded by at least 4-6 months of divergence with price and market breadth. There is no divergence at all at this time. This strongly suggests this old bull market has at least 4-6 months to continue, and very possibly longer.


The S&P500, DJIA and DJT have all made new all time highs.

Nasdaq has made a new all time high. Modified Dow Theory (adding in technology as a barometer of our modern economy) sees all indices confirming the ongoing bull market.

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.

Published @ 11:55 p.m. EST.