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Last analysis expected more upwards movement to begin the new trading week, which is what has happened.

The Elliott wave target is just one point off a target using the measured rule and a reliable continuation pattern.

Summary: The Elliott wave target is at 2,616 and a target from a small pennant pattern is 2,617. The upwards trend has support from very bullish On Balance Volume.

Assume the trend remains the same until proven otherwise. The trend is up.

Weakness at the end of this week in market breadth points to the alternate hourly Elliott wave count possibly being correct. If price breaks below the green Elliott channel on the hourly charts, then expect a multi day pullback or consolidation is underway.

Pullbacks and consolidations at their conclusions offer opportunities to join the upwards 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
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This wave count has strong support from very bullish 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.

When minor wave 3 is complete, then minor wave 4 should find support about the lower edge of the best fit channel. Minor wave 4 may not move into minor wave 1 price territory below 2,299.55.

The next reasonable correction should be for intermediate wave (4). When it arrives, it should last over two months in duration. The correction may be relatively shallow, a choppy overlapping consolidation, at the weekly chart level.


S&P 500 Daily 2017
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Minute wave v is completing as an impulse. The final fifth wave of minuette wave (v) is underway.

The target for minor wave 3 expects to see the most common Fibonacci ratio to minor wave 1.

Within minuette wave (v), no second wave correction may move beyond the start of the first wave below 2,544.00.


S&P 500 Hourly 2017
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Assume the trend remains the same until proven otherwise. Assume the trend remains up while price remains within the green channel and above 2,566.17.

Minuette wave (v) must subdivide as a five wave structure. It may be an impulse with subminuette waves i and ii complete.

This wave count expects to see a further increase in upwards momentum as a small third wave up unfolds.

From the start of subminuette wave iii, it looks now like another five up may be complete. This cannot be subminuette wave iii in its entirety as it has not yet moved far enough above the end of subminuette wave i to allow for room for a subsequent consolidation for subminuette wave iv to unfold and remain above subminuette wave i price territory.

Within the impulse of subminuette wave iii, only micro wave 1 may now be complete. Micro wave 2 may not move beyond the start of micro wave 1 below 2,566.17.

A breach of the green channel by downwards movement would be the earliest indication that this first wave count may not be correct. If that happens, then seriously consider the alternate hourly wave count below.


S&P 500 Hourly 2017
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This alternate simply moves the degree of labelling within the last five up all up one degree. It is possible again that minor wave 3 could be over.

Minor wave 2 was a quick shallow 0.16 zigzag lasting just three days. Minor wave 4 should also show up at the daily chart level. It may be a sideways consolidation, subdividing as a flat, combination or triangle, to exhibit alternation with the zigzag of minor wave 2. These structures are often more time consuming than zigzags. So far minor wave 4 may have lasted six days and the structure would be incomplete. It may end in a total Fibonacci thirteen days.

A new correction at minor degree should begin with a five down at the hourly chart level. This has not happened, a three down only is complete. The probability of this wave count is reduced.

It is possible that minor wave 4 is beginning with a flat correction for minute wave a. Within the flat, minuette wave (b) has passed the minimum 0.9 length of minuette wave (a). The most common length for B waves within flats is from 1 to 1.38 times the length of the A wave. Here, minuette wave (b) is still within this common range.

There is reasonable support from volume for recent upwards movement. This reduces the probability of this wave count substantially; B waves should exhibit weakness and not strength.

This alternate is an unlikely scenario; it is only published to consider all possibilities.



S&P 500 weekly 2017
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The Hanging Man candlestick requires bearish confirmation because the long lower wick has a strong bullish implication. Last week has not given bearish confirmation, so the Hanging Man candlestick should not be read as a reversal signal.

Indicators are now extreme, but at this stage there is not enough weakness in price to indicate an end to the upward trend here. Extreme conditions for ADX and RSI may persist for several weeks while price continues higher.


S&P 500 daily 2017
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Pennants are one of the most reliable continuation patterns. The measured rule calculates a target about 2,617. Because this is only one point off the Elliott wave target, this area may offer strong resistance.

This chart today is increasingly bullish. The trend is clearly up. Go with the trend. But risk management is essential, as always: with RSI and Stochastics both extreme, there is risk here of a pullback to resolve these conditions.


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 moved higher today with a higher high and a higher low, and the candlestick closed green. But inverted VIX has moved lower as volatility increased. This is not normal with rising price. This indicates weakness within price today and interpreted as bearish.


AD Line daily 2017
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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 longer term 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 short term divergence between price and the AD line. Upwards movement during Monday’s session has some support from rising market breadth. There is still some mid term divergence back to the 20th of October. As minor wave 3 comes to an end, this should be expected.

Small caps have moved lower during last week failing to make new all time highs. Mid caps made their last all time high on Wednesday and have failed to make a new all time high for Friday. There is some very short term weakness within this market developing.


At the end of last week, only DJT failed to make a new all time high. The S&P500, DJIA and Nasdaq have made new all time highs. DJT has failed so far to confirm an ongoing bull market.

Failure to confirm an ongoing bull market should absolutely not be read as the end of a bull market. For that, Dow Theory would have to confirm new lows.

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 @ 06:20 p.m. EST.