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A small inside day for Friday changes the very short term picture only slightly.

Summary: A bounce may have begun on Friday. Some confidence in this view may be had if price makes a new high above 2,448.09 now. The target is either 2,458 or 2,470.

Primary wave 4 may be expected to last at least 8 weeks and may end about 2,320.

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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Primary wave 3 now looks complete. 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 still exhibits the most common Fibonacci ratio to primary wave 1.

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.

At the end of last week, Lowry’s analysis favours the idea that primary wave 4 has begun.


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.

Primary wave 2 was a regular flat correction lasting 10 weeks. Given the guideline of alternation, primary wave 4 may most likely be a single or double zigzag. Within both of those structures, a five down at the daily chart level should unfold. At this stage, that looks incomplete.

While primary wave 4 would most likely be a single or double zigzag, it does not have to be. It may be a combination or triangle and still exhibit structural alternation with primary wave 2. There are multiple structural options available for primary wave 4, so it is impossible for me to tell you with any confidence which one it will be. It will be essential that flexibility is applied to the wave count while it unfolds. Multiple alternates will be required at times, and members must be ready to switch from bear to bull and back again for short term swings within this correction.

Members with a longer term horizon for their trading may wait for primary wave 4 to be complete to purchase stocks or enter the index long.


S&P 500 hourly 2017
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With a five down looking clear on the hourly chart, and now Friday’s movement choppy sideways movement, it looks like minor wave 1 is over and minor wave 2 has begun. There are Fibonacci ratios between all actionary waves within the impulse of minor wave 1.

Minor wave 2 may be any corrective structure except a triangle. Targets for it to end would be the 0.382 and 0.618 Fibonacci ratios, with the 0.618 Fibonacci ratio favoured.

Minor wave 1 lasted two days. Minor wave 2 may last about two to five days to have good proportion to minor wave 1, so that the wave count has the right look.

Minor wave 2 may not move beyond the start of minor wave 1 above 2,490.87.


S&P 500 hourly 2017
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I have considered the possibility that minute wave iv may be continuing as a triangle. It will fit as a triangle, but the upper A-C trend line would have too steep a slope, and it would be difficult for the triangle to end and effect a net retracement of minute wave iii.

I have considered the possibility that minute wave iv may be continuing as an expanded flat correction. That would require the channel to be strongly breached, and minute wave iv would then be grossly disproportionate to minute wave ii.

The most reasonable consideration would be that minute wave iv is over, and Friday’s sideways movement may be part of minute wave v.

Within minute wave v, minuette waves (i) and (ii) may be complete. However, downwards movement at the end of Friday’s session does not look like a third wave unfolding, even one of a small degree.

Within minuette wave (iii), no second wave correction may move beyond its start above 2,448.09.



S&P 500 weekly 2017
Click chart to enlarge. Chart courtesy of

This weekly candlestick is very bearish. A Bearish Engulfing pattern is the strongest reversal pattern.

If next week also moves price lower, then On Balance Volume would give an important bearish signal. For now it may offer some support and assist to initiate a bounce here.

RSI, ADX and MACD all remain bearish.

This weekly chart offers good support to the Elliott wave count.


S&P 500 daily 2017
Click chart to enlarge. Chart courtesy of

The short term volume profile is bearish. Look now for resistance about 2,460.

There is room for price to fall further. RSI and Stochastics are not yet oversold. On Balance Volume is not yet at support.

This chart is on balance fairly bearish and offers good support to the 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.

There is longer term divergence between price and inverted VIX, shown in gold lines. However, mid and long term divergence has proven to be reasonably unreliable, so it will be given no weight in this analysis.


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.

There is no new divergence between price and market breadth today.


The S&P500, DJIA, DJT and Nasdaq have all made new all time highs within the last month.

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 @ 11:45 p.m. EST on 12th August, 2017.