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Price has moved overall higher to begin the new trading week, towards the new target provided in last analysis.

Summary: For the short term, look now for a pullback to about 2,624 or 2,599. This may be a second wave correction. Thereafter, look for upwards movement to continue towards the target about 2,773.

If price makes a new low below 2,557.46, that would indicate a multi week (about 10) correction may have arrived.

Always trade with stops and invest only 1-5% of equity on any one trade. All trades should stick with the trend. The trend remains up.

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

The biggest picture, Grand Super Cycle analysis, is here.



S&P 500 Weekly 2017
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Cycle wave V must complete as a five structure, which should look clear at the weekly chart level. It may only be an impulse or ending diagonal. At this stage, it is clear it is an impulse.

Within cycle wave V, the corrections for primary wave 2 and intermediate wave (2) both show up clearly, both lasting several weeks. The respective corrections for intermediate wave (4) and primary wave 4 should also last several weeks, so that they show up at weekly and monthly time frames. The right proportions between second and fourth wave corrections give a wave count the right look. This wave count expects to see two large multi week corrections coming up, and the first for intermediate wave (4) may now be quite close by.

Cycle wave V has passed equality in length with cycle wave I, which would be the most common Fibonacci ratio for it to have exhibited. The next most common Fibonacci ratio would be 1.618 the length of cycle wave I.

Intermediate wave (3) may now be nearing completion, and a new hourly wave count today looks at the possibility it could be complete at today’s high. When it is complete, then intermediate wave (4) should unfold and be proportional to intermediate wave (2). Intermediate wave (4) may be very likely to break out of the yellow best fit channel that contains intermediate wave (3). Intermediate wave (4) may not move into intermediate wave (1) price territory below 2,193.81.

The yellow best fit channel is redrawn. Price points are given so that members may replicate this channel. This channel is copied over to the daily chart.


S&P 500 Daily 2017
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We should always assume the trend remains the same until proven otherwise. Assume that minor wave 5 is incomplete while price remains above 2,557.45.

The target calculated for minor wave 5 expects it to exhibit the most common Fibonacci ratio for a fifth wave. This target would not expect a Fibonacci ratio for intermediate wave (3) to intermediate wave (1). A new lower target is calculated at the hourly chart at minute degree, one degree lower.

Within minor wave 5, no second wave correction may move beyond the start of its first wave below 2,557.45.


S&P 500 Hourly 2017
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This first hourly chart follows on from labelling on the daily chart.

A five up from the low of minor wave 4 is today complete. This wave count fits with MACD: the strongest momentum within this five up is the end of the third wave of minuette wave (iii), and within the third wave the strongest portion of the histogram is its middle, subminuette wave iii. At the end of the five up, there is some divergence with price and momentum for the fifth wave of minuette wave (v).

With a five up now compete, a three down should follow. If minor wave 5 is incomplete, then only minute wave i may be over at today’s high. Now minute wave ii may take a couple of days to complete. The most likely point for it to end may be the 0.618 Fibonacci ratio about 2,599, but the 0.382 Fibonacci ratio about 2,624 is also a reasonable target.


S&P 500 Hourly 2017
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This first alternate hourly chart expects the five up may be incomplete, and within it the fifth wave may be extending. This is also possible and at this stage also fits with MACD.

If the fifth wave is extending, then minuette wave (ii) within it may not move beyond the start of minuette wave (i) below 2,605.67.


S&P 500 Hourly 2017
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Because we should always assume the trend remains the same until proven otherwise, this wave count should be considered an alternate while price has not confirmed it.

By simply moving the degree of labelling within the five up from the end of minor wave 4 all up one degree, it is possible to see today that intermediate wave (3) could be over.

If this wave count is confirmed with a new low below 2,557.46, then it would expect a multi week pullback or consolidation for intermediate wave (4) to last about ten weeks or so. If it is a complicated combination or a triangle, then it may be longer lasting, possibly a Fibonacci thirteen or even twenty-one weeks.

At this early stage, the 0.382 Fibonacci ratio of intermediate wave (3) would be a reasonable target.



S&P 500 weekly 2017
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This last week completed the strongest volume for a year, which for an upwards week is very bullish.

The problem with divergence, and one reason why it is hopeless as a timing tool, is that sometimes it just disappears. That is what has happened between divergence with price and RSI. Still, the failure of On Balance Volume to make new all time highs with price is bearish especially if On Balance Volume is a leading indicator.

This trend is extreme, but it could still continue for a while longer. Look for a candlestick reversal pattern or a bearish signal from On Balance Volume.


S&P 500 daily 2017
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We have a bearish signal now from On Balance Volume. This offers some support to the main hourly Elliott wave count, and the second alternate hourly Elliott wave count, but it cannot distinguish which one of those two wave counts is correct as both expect some pullback. It may offer slightly more support to the second alternate hourly Elliott wave count, which expects a multi week pullback to begin here.

Volume, On Balance Volume, RSI and Stochastics all support the main hourly Elliott wave count, and also offer some support to the second alternate hourly Elliott wave count.


VIX daily 2017
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So that colour blind members are included, bearish signals will be noted with blue and bullish signals with yellow.

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.

The last two bearish signals from VIX were followed by a day that saw a sharp pullback. They are considered to have worked.

Another bearish signal is given today from inverted VIX: price has moved higher, but inverted VIX has moved lower. This indicates the upwards movement for price does not come with a normal corresponding decline in volatility; volatility has increased today. This indicates weakness within price, which is 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.

All of large, mid and small caps last week have made new all time highs. The rise in price has support from market breadth.

Market breadth slightly improved as price moved higher today. The rise in price has support from rising breadth, which is bullish.


The DJIA, DJT, S&P500 and Nasdaq have last week made new all time highs. This provides confirmation of 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 @ 07:30 p.m. EST.