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Another very slight new all time high continues the upwards trend today.

Summary: The correction may be over; while price remains above 2,541.60 now, this should be the expectation. The next target is at 2,602 to 2,614. However, there is less bullishness and more weakness today, so a little less support for this view.

While the trend is clearly up, overbought conditions illustrate risk here to long positions.

A new low below 2,541.60 would indicate the pullback is not over and a target for it to end would now be at 2,527 to 2,523. If this happens, then use it as an opportunity to add to long positions. The trend remains up.

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
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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.


S&P 500 Daily 2017
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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. It looks like minuette waves (i) through to (iv) may now be complete despite minuette wave (iv) lasting only two sessions. The problem of proportion may be accepted if bullishness in classic analysis correctly predicts more upwards movement.

If it continues any further then minuette wave (iv) may not move back down into minuette wave (i) price territory below 2,454.77. If it continues further, then minuette wave (iv) may end to total a Fibonacci eight sessions and have good proportion with minuette wave (ii).


S&P 500 Hourly 2017
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It is possible that minuette wave (iv) may have been as a flat correction. The downwards wave labelled subminuette wave a will subdivide as either a three or a five on the five minute chart. This wave count looks at it as a three which would give alternation for minuette wave (iv) as a flat correction to the zigzag of minuette wave (ii).

The target may now be calculated at two wave degrees, so it is widened to a rather large zone. When subminuette waves i through to iv are complete, then it can be calculated at a third degree. At that stage the zone may be narrowed.

Upwards movement for the start of minuette wave (v) will now subdivide nicely as a leading contracting diagonal for subminuette wave i. Leading diagonals in first wave positions are very commonly followed by very deep second wave corrections. If this structure is correctly labelled, then tomorrow subminuette wave ii may move lower, but it may not move beyond the start of subminuette wave i below 2,541.60.

A new low by any amount at any time frame below 2,541.60 would invalidate this main hourly wave count. At that stage use the alternate below.

Prior to any invalidation, it is safest to assume the trend remains the same, upwards.


S&P 500 Hourly 2017
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If minuette wave (iv) is not over, then it may continue for another three days to total a Fibonacci eight.

There are still multiple structural options for minuette wave (iv). Today, it is labelled as the most common option, an expanded flat. But it may still morph into a combination or complete as a running triangle.

An expanded flat may see minuette wave (iv) come lower to test support at the lower edge of the green Elliott channel. The target calculated may be a little too low if this channel offers strong support.

This alternate wave count would see minuette wave (iv) still exhibit good proportion with minuette wave (ii), and they would have perfect alternation. At the daily chart level, this wave count would give the structure of minute wave v a better look.



S&P 500 weekly 2017
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This chart remains very bullish, but with RSI now overbought for a little while the upwards trend may see a pullback soon to relive this overbought condition.

ADX is now again fully bullish at the weekly chart level as the black ADX line returns to below the directional lines.

The decline in volume for the last completed week is slightly bearish, but this bull run has done this before and yet price has continued higher. On its own this will not be taken as a sign that a pullback or consolidation must begin here. The bull run could continue yet for weeks.


S&P 500 daily 2017
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A very slight new all time high today now sees some bearish divergence return to RSI and remain with Stochastics.

If On Balance Volume breaks below support, that would offer support to the alternate hourly Elliott wave count, but right now On Balance Volume supports the main hourly Elliott wave count. Assume the yellow line will provide support until it is breached. The yellow line offers only weak technical significance as it is fairly steep. It is considered though because it has been tested four times and is reasonably long held.

Supporting the main hourly Elliott wave count: price, ADX, MACD, On Balance Volume and Bolllinger Bands.

Supporting the alternate hourly Elliott wave count: Spinning Top candlestick pattern, short term volume, ATR, RSI and Stochastics.


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 bearish divergence today between price and inverted VIX. The new all time high for price does not come with a normal corresponding decline in market volatility; the rise in price is weak.


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 AD line has again made a new all time high. As this should be read as a leading indicator, it supports the main hourly Elliott wave count. This is bullish.

Small, mid and large caps have all made new all time highs. The rise in price is supported in all sectors of the market.

Go with the trend. Manage risk.


All the indices are making new all time highs. The continuation of the bull market is 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 @ 07:55 p.m. EST.