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A little more upwards movement fits both hourly Elliott wave counts.

Summary: We should always assume the trend remains the same until proven otherwise. While it is possible that primary wave 3 may be over, assume that it may continue higher while price remains above 2,430.98. The expected end is now below 2,481.12. If that price point is passed, then the next target would be 2,485.

If price moves strongly lower this week, then the probability that primary wave 4 has arrived will increase. Confidence may be had if price makes a new low below 2,430.98. If that happens, then expect a multi week to multi month pullback to end about 2,320.

Classic technical analysis today still offers reasonable support to the main Elliott wave count, which sees a high now in place for primary wave 3 and the start now of primary wave 4.

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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It is possible that primary wave 3 is complete. However, some confidence may be had in this view only with a new low below 2,430.98. Further and substantial confidence may be had if price makes a new low below 2,405.70. Fibonacci ratios are calculated at primary and intermediate degree. If primary wave 3 is complete, then it exhibits the most common Fibonacci ratio to primary wave 1. It also perfectly exhibits a Fibonacci 55 weeks duration.

Primary wave 4 may not move into primary wave 1 price territory below 2,111.05.

Primary wave 4 should last about 8 weeks minimum for it to have reasonable proportion with primary wave 2. It is the proportion between corrective waves which give a wave count the right look. Primary wave 4 may last 13 or even 21 weeks if it is a triangle or combination.

If primary wave 4 reaches down to the lower edge of the Elliott channel, it may end about 2,320. This is very close to the lower range of intermediate wave (4); fourth waves often end within the price territory of the fourth wave of one lesser degree, or very close to it.

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.

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

There are no adequate Fibonacci ratios between minor waves 1, 3 and 5. This is not uncommon for the S&P500. Minor wave 3 exhibits strongest momentum and is the longest actionary wave, so this wave count fits with MACD.

It must be accepted that it is entirely possible that primary wave 3 may not be over and may continue higher while price remains above 2,405.70.


S&P 500 hourly 2017
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Minor wave 5 may now be a complete five wave impulse.

A strong breach of that channel would indicate a trend change, but it may not necessarily be a trend change at primary degree.

Minute wave ii may have continued higher today as a deep double zigzag. The subdivisions fit perfectly. This wave count now expects to see an increase in downwards momentum tomorrow and a breach of the pink Elliott channel.

If it continues further, then minute wave ii may not move beyond the start of minute wave i above 2,484.04.


S&P 500 hourly 2017
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It is still possible that minor wave 5 is incomplete, that minute wave iv is still unfolding.

This wave count must be an alternate because there is inadequate alternation between minute waves ii and iv: both are expanded flats. There may still be good alternation in depth, but alternation is a guideline and not a rule and the S&P500 does not always exhibit perfect alternation.

Minute wave iv may have ended at Thursday’s low. The following fifth wave may end mid way within the channel, or at the upper edge.

With much overlapping in recent slow upwards movement, it may be an ending diagonal for minute wave v. It is extremely rare for ending diagonals to result in truncated fifth waves, so this one should end above the high labelled minute wave iii at 2,477.62. It only needs to end beyond the end of minute wave iii to avoid a truncation, not the price extreme of minute wave iv.

The diagonal may be contracting. This limits minuette wave (v) to no longer than equality in length with minuette wave (iii).

If it continues any further, then minute wave iv may not move into minute wave i price territory below 2,430.98.



S&P 500 weekly 2017
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There is a little short term bearishness last week to support the labelling of the daily Elliott wave count: some support from volume for downwards movement, divergence still between price and RSI, and a doji candlestick.

With still extreme ADX, the conditions look right now for a primary degree correction here.


S&P 500 daily 2017
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Comments are all on the chart today. It remains overall fairly bearish.

In conjunction with bearishness at the weekly chart level, there is now more support for the main Elliott wave count than the alternate hourly 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.

Price and inverted VIX moved higher for Tuesday. There is no new divergence.


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.

A new high today for market breadth does not come with a corresponding new high for price. Upwards movement during Tuesday’s session sees weakness in price. This is interpreted as bearish.

Lowry’s measures of internal market strength and health continue to show a healthy bull market. While the bull market overall remains healthy, there are signs at the end of this week of some short term weakness which may indicate a pullback to develop here. This supports the labelling of the Elliott wave count at the daily chart level.

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, DJT and Nasdaq have all made new all time highs.

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 @ 11:06 p.m. EST.