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The main Elliott wave count expected more upwards movement.

A new all time high adds confidence to the target.

Summary: The target remains at 2,773.

The market is overbought and overstretched at the daily and weekly chart levels, but there are no bearish signals yet at the weekly chart level. Assume the upwards trend remains intact while price remains within the narrow best fit channel on the hourly chart, and above 2,652.02.

A new low below 2,652.02 would indicate more downwards movement to a target at 2,605 – 2,600.

A new low below 2,557.45 would indicate a multi month pullback or consolidation has arrived.

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 (an alternate hourly wave count again looks at the possibility it could be complete at the last 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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The main wave count will now expect that within minor wave 5 minute waves i and ii are complete.

Within minute wave iii, no second wave correction may move beyond its start below 2,624.85.

The target expects minor wave 5 to exhibit the most common Fibonacci ratio to minor wave 1.

Price is finding resistance about the mid line of the best fit channel.

The narrower channel, which is drawn on the hourly chart, is added to the daily chart in order for members to see how it is drawn. Copy this channel over to the hourly chart. If minor wave 5 is incomplete, then price should remain within this channel.


S&P 500 Hourly 2017
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Minute wave iii may only subdivide as an impulse.

Within minute wave iii, minuette waves (i) and now (ii) may now be complete.

The next wave up for minuette wave (iii) should exhibit a strong increase in momentum.

Within minuette wave (iii), the second wave correction of subminuette wave ii may not move beyond the start of subminuette wave i below 2,652.02. This price point is taken from the five minute chart, which sees no truncation for micro wave 5.

If this wave count is correct, then corrections along the way up should find support about the lower edge of the best fit channel. If that channel is breached by clear downwards movement (not sideways), that shall be an early indication that this wave count may be wrong and one of the alternates below may be right.


S&P 500 Hourly 2017
Click chart to enlarge.

It is still possible that minute wave ii may not be complete and may be continuing as an expanded flat correction.

If price makes a new swing low below 2,652.02, then the target for downwards movement to end would be 2,605 to 2,600. This assumes the most common Fibonacci ratio between minuette waves (a) and (c), and the most common point for minute wave ii to end at.

Minuette wave (c) may last five days if minute wave (ii) exhibits a Fibonacci duration of thirteen.

With upwards movement for Friday, minuette wave (b) now has a better look as a zigzag.


S&P 500 Hourly 2017
Click chart to enlarge.

A more bearish option is still technically possible. It is possible that intermediate wave (4) may begin here or very soon.

A new low below 2,557.45 is required for confirmation of this idea. Only then should it be taken seriously.

Intermediate wave (4) may last about three months. It may be a choppy overlapping large consolidation, or a deep sharp pullback (which may be over more quickly than three months). It should have some reasonable proportion to intermediate wave (2), so that the wave count has the right look at the weekly time frame.

While there is plenty of bearishness in indicators at the daily chart level, there is none yet at the weekly chart level. It may be that a bearish signal at the weekly chart level is needed before this alternate wave count may be correct.



S&P 500 weekly 2017
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There is still no candlestick reversal signal at highs. The trend is now very extreme and overstretched, but this can continue for longer before price is ready to turn.

Overall, at this time frame, this market remains very bullish.


S&P 500 daily 2017
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The bearish engulfing candlestick pattern noted in last analysis has failed.

With ADX not yet extreme, there is room for this upwards trend to continue. It is overbought, but that can continue for longer.

There is no reversal signal at this stage.

On Balance Volume is at resistance and this may halt the rise in price for another short term pullback.


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.

There is short term bearish divergence between inverted VIX and price. While this supports the alternate Elliott wave counts, it will not be given weight in this analysis because it appears recently to fail more often than it accurately predicts downwards movement.


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.

Only large caps made new all time highs this week. There is some weakness this week with mid and small caps unable to make new all time highs; this is bearish and offers some support to the alternate Elliott wave counts.

Breadth should be read as a leading indicator. The new all time high for price is matched by a new all time high for market breadth. The rise in price has support from rising breadth. This is bullish.


The S&P500, DJIA and Nasdaq this week all made new all time highs. Only DJT has failed to make a new all time high, but it has failed by a very small margin. The ongoing bull market is this week not confirmed, but this is a very weak non confirmation.

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 @ 9:09 p.m. EST on 16th December, 2017.