Select Page

On Balance Volume is very bullish. Members are given some trading advice on how to approach this market at this time.

Summary: The bigger picture sees the S&P now in a primary degree pullback to last a minimum of 8 weeks.

The main and alternate wave counts are swapped over today. It now looks fairly likely that price may make a new all time high in the next few days. Some trading advice is given today in the technical analysis section.

Last monthly and weekly charts are here. Last historic analysis video is here.



S&P 500 Weekly 2017
Click chart to enlarge.

Primary wave 3 now looks complete. Further and substantial confidence may be had if price makes a new low below 2,405.70, which is the start of minor wave 5 within intermediate wave (5). A new low below 2,405.70 may not be a second wave correction within an extending fifth wave, so at that stage the final fifth wave must be over. 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. So far it is only nearing the end of its third week.

If primary wave 4 unfolds as a single or double zigzag, then it may find support about the lower edge of the maroon Elliott channel. If it is a triangle or combination, it may be more shallow, ending about mid way within the channel.

The final target for Grand Super Cycle wave I to end is at 2,500 where cycle wave V would reach equality in length with cycle wave I. 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
Click chart to enlarge.

The daily chart will now focus in on the unfolding structure of primary wave 4.

Primary wave 4 may be any one of more than 23 possible corrective structures. With what looks clearly like a three down complete and now a bounce unfolding, primary wave 4 may be unfolding as a triangle or combination. Both those structures would still offer alternation with the flat of primary wave 2.

I have moved the degree of labelling within the zigzag up one degree. Intermediate wave (A) of a larger triangle may possibly be complete, lasting only two weeks. The triangle may still last a total of at least eight weeks, and possibly longer.

The zigzag down may also be intermediate wave (W) of a combination or double zigzag. A combination at this stage looks more likely because the following bounce is so far fairly deep.

If primary wave 4 is unfolding as a triangle, then within it intermediate wave (B) may make a new all time high as in a running triangle. There is no upper invalidation point.

If primary wave 4 is unfolding as a combination, then intermediate wave (X) may also make a new all time high. There is no upper invalidation point.

If primary wave 4 is unfolding as a double zigzag, then intermediate wave (X) should be over here or very soon. Double zigzags normally have relatively brief and shallow X waves.

While a flat correction is also possible for primary wave 4, it will not be considered at this stage as it is the least likely structure because it would offer no alternation with the flat correction of primary wave 2.


S&P 500 hourly 2017
Click chart to enlarge.

The degree of labelling has been moved up one degree. Intermediate wave (A) or (W) may be complete. Intermediate wave (B) or (X) may be incomplete.

Expect price to continue rising while it remains within the narrow pink channel.

While the target calculated does not expect a new all time high, the target may be wrong and a new all time high is possible.



S&P 500 daily 2017
Click chart to enlarge.

Primary wave 4 may 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.

Intermediate wave (A) may be unfolding as a leading diagonal. The diagonal would most likely be contracting. Within intermediate wave (A), minor wave 2 may not move beyond the start of minor wave 1 above 2,490.87.


S&P 500 hourly 2017
Click chart to enlarge.

Subdivisions at the hourly chart level are the same for both wave counts. Only the degree of labelling and the larger structure differ. Both wave counts see a zigzag complete downwards to the last low, and now a zigzag upwards completing.

The target at 2,488 would also work for this alternate wave count.



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

Last week has made a lower low and lower high, but the candlestick closed green and the balance of volume was upwards. Lighter volume does not support the rise in price during the week.

ADX had been extreme for a long time and is now declining. The black ADX line is now declining but has not yet been pulled down below both directional lines, so the consolidation or pullback may be expected to continue.


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

Volume and On Balance Volume are very bullish. If the Elliott wave analysis is wrong, it may be in expecting a primary degree correction to continue for some weeks. Members may like to enter long positions with stops just below the breakaway gap for a buy and hold strategy. If price makes a new all time high, then the area about 2,485 to 2,490 may offer strong support.

If the gap is a breakaway gap, then it may not be filled for a long time. If it is filled, then it is not a breakaway gap and long positions should be exited.

Always use a stop and invest only 1-5% of equity on any one trade. Risk management is the most important aspect of trading.

Moving averages are full bore bullish. ADX gives a bullish crossover today. MACD gives a bullish crossover. On Balance Volume is strongly bullish.

If this upwards movement is a B wave, then the only weakness it is showing so far is flat ATR and slightly contracting to steady Bollinger Bands. This weakness was seen in recent bullish trends.


VIX daily 2017
Click chart to enlarge. Chart courtesy of

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 new divergence today. Rising price comes with a normal decline in volatility.


AD Line daily 2017
Click chart to enlarge. Chart courtesy of

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.

Hidden bearish divergence noted in last analysis was mid term. It was judged to be unreliable and so given no weight. Today, it has simply disappeared.

There is no new divergence today between price and breadth. The rise in price is supported by a rise in market breadth.


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

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 @ 12:05 a.m. EST on 1st September, 2017.