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Bullishness in On Balance Volume and rising market breadth all have pointed recently to higher prices.

And in yesterday’s analysis it was noted there was a Three White Soldiers candlestick pattern on the daily chart, so higher prices today were completely expected.

Summary: On Balance Volume and the AD line remain very bullish, supporting the Elliott wave count. The next short term target is at 2,540. A mid term target for members with a longer horizon is at 2,614.

Some slight weakness today in volume and an increase in VIX today suggests this current upwards wave may be nearing its end, but the high does not look like it is in place quite yet with no divergence yet between price and Stochastics and RSI. This slight weakness and overbought RSI now indicates that traders should be particularly diligent with risk management at this time.

The trend remains up. Go with the trend.

Always trade with stops and invest only 1-5% of equity on any one trade.

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



S&P 500 Weekly 2017
Click chart to enlarge.

This wave count has strong support from another bullish signal from On Balance Volume at the weekly chart level. While classic analysis is still very bullish for the short term, there will be corrections along the way up. Indicators are extreme and there is considerable risk to the downside still.

As a Grand Super Cycle wave comes to an end, weakness may develop and persist for very long periods of time (up to three years is warned as possible by Lowry’s for the end of a bull market), so weakness in volume may be viewed in that larger context.

Within minute wave v, no second wave correction may move beyond the start of its first wave below 2,417.35.

The next reasonable correction should be for intermediate wave (4). When it arrives, it should last over two months in duration, and it may find support about the lower edge of this best fit channel. The correction may be relatively shallow, a choppy overlapping consolidation, at the weekly chart level.

At this stage, the alternate Elliott wave count will now be discarded based upon a very low probability.


S&P 500 Daily 2017
Click chart to enlarge.

To see details of the whole of primary wave 3 so far see the analysis here.

Minute wave v to complete minor wave 3 must subdivide as a five wave structure. It looks like an incomplete impulse. So far it looks like minuette waves (i) and (ii) are complete with minuette wave (iii) now very close to completion.

When minuette wave (iii) is complete, then minuette wave (iv) may not move back down into minuette wave (i) price territory below 2,454.77.

A new target is calculated for minuette wave (iii) to end. The target would see no Fibonacci ratio at minuette degree, but it would see a ratio at subminuette degree within minuette wave (iii).

So far minuette wave (iii) has lasted 24 sessions. The structure is still incomplete at the hourly chart level, so it may not exhibit a Fibonacci duration.


S&P 500 Hourly 2017
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The target is widened now to a 1 point zone calculated at two wave degrees. It would see the most common Fibonacci ratio of equality between subminuette waves v and i, and a less common ratio at micro degree for micro wave 5.

Within micro wave 5, no second wave correction may move beyond the start of its first wave below 2,528.85.

The orange Elliott channel about minuette wave (iii), which can be seen on the daily chart, is here removed from the hourly chart because it is no longer showing where price is finding resistance along the way up. The smaller violet channel about subminuette wave v may now be a better guide. Micro wave 5 may end at the upper edge of this channel. When this channel is breached by downwards movement, that shall be the earliest indication that minuette wave (iii) may be over and minuette wave (iv) may have begun.

When minuette wave (iii) is over, then minuette wave (iv) may last about five to eight sessions. It would most likely be a shallow sideways consolidation to exhibit alternation with the deep zigzag of minuette wave (ii).



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

The candlestick is bullish. On Balance Volume is very bullish. MACD is now bullish. ADX remains bullish.

ADX is extreme but not by much.

This analysis strongly supports the main Elliott wave count. The trend is up. Keep all trades with the trend. Always use stops as there is always risk to the downside. Invest only 1-5% of equity on any one trade to manage risk.

From the small flag pattern, using the measured rule gives a target about 2,520; this is nicely close to the Elliott wave target.


S&P 500 daily 2017
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This chart remains very bullish. Only a slight decline in volume today indicates any weakness. This slight decline on its own should not be taken as a sign that a high is in place.

The Three While Soldiers is a bullish candlestick pattern. Each candlestick is closing at or near its highs, showing a steady increase in price. The pattern, which shows some strength ahead, appears after a small consolidation. The only note of caution from Nison would be that it is not appearing at an area of low prices, quite the opposite.

Stochastics may remain extreme for long periods of time for this market when it is in a strong bull trend. Wait for RSI to now begin to show some divergence with price while overbought before looking out for a trend change. There is no indication today of a high in place. There is no divergence between price and RSI and RSI has only just entered overbought.

With RSI now overbought, traders should be disciplined with risk management. There will be a correction coming up, probably not quite yet, but when it does arrive soon it may begin with a violent downwards movement.


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 still mid and longer term bearish divergence, but it has been noted in the past that divergence over a longer term does not seem to work as well for VIX. Short term bearish divergence has disappeared.

There is single divergence today with price and inverted VIX: volatility increased while price moved higher. This indicates some weakness within price and will be interpreted as bearish.


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.

The rise in price today is again supported by a rise in market breadth. The AD line continues to remain very bullish.

The mid and small caps have also made new all time highs. The rise in price is supported in all sectors of the market. Lowry’s measures of supply and demand continue to show expanding demand and contracting supply, which is more normal for an early bull market. This market shows reasonable internal health.

Go with the trend. Manage risk.


The S&P’s new all time high is confirmed by DJIA and Nasdaq also making new all time highs. DJT has also now made new all time highs, so the continuation of the bull market is now confirmed.

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 @ 10:32 p.m. EST.