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Some more downwards movement was expected but the target at 2,733 was inadequate.

The main and alternate Elliott wave counts are swapped over today.

Summary: Expect overall downwards movement to continue to about 2,584 – 2,571. Price may find support about the 200 day moving average.

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

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

Last historic analysis with monthly charts is here. Video is here.

An alternate idea at the monthly chart level is given here at the end of this analysis.

An historic example of a cycle degree fifth wave is given at the end of the analysis here.



S&P 500 Weekly 2018
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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 third waves at all degrees may only subdivide as impulses.

Intermediate wave (4) has breached an Elliott channel drawn using Elliott’s first technique. The channel is redrawn using Elliott’s second technique. The upper edge may provide resistance for intermediate wave (5).

Intermediate wave (4) may not move into intermediate wave (1) price territory below 2,193.81. At this stage, it now looks like intermediate wave (4) may be continuing further sideways as a combination or triangle.


S&P 500 Daily 2018
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At this stage, it looks like intermediate wave (4) may be continuing sideways. It may be either a triangle, combination or double zigzag. Of all of these three possible structures a double zigzag is very unlikely because that was the structure of intermediate wave (2).

Intermediate wave (4) is labelled today as a possible triangle. At this stage, both a triangle or combination would expect a zigzag downwards to complete, so the two ideas do not diverge in terms of short term structure or expected direction. When they diverge, then they will be charted separately.

Minor wave B is a 0.75 depth of minor wave A within the possible triangle. Minor wave C may find support about the 200 day moving average. A reasonable range for it to end would be about 0.8 to 0.85 the length of minor wave B at 2,584 to 2,571.

If intermediate wave (4) is a contracting or barrier triangle, then minor wave C within it may not move beyond the end of minor wave A below 2,532.69. An expanding triangle would require a new low below 2,532.69, but these are exceptionally rare structures, so rare in fact that I have never seen one. It will not be expected here.

If this downwards zigzag makes a new low below 2,532.69, then intermediate wave (4) would be labelled as a double combination. The second structure for minor wave Y would be expected to be a flat correction. Double combinations are common structures.


S&P 500 Hourly 2018
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A five down looks like it is completing and has just passed the middle of a third wave. When the middle of the third wave is complete, then a series of small fourth wave corrections must remain below their respective first wave price territories.

The first in a series of three fourth wave corrections for subminuette wave iv may not move into subminuette wave i price territory above 2,738.02.

The acceleration channel may contain downwards movement. The upper edge may provide resistance for bounces along the way down.



S&P 500 Daily 2018
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It is still possible that intermediate wave (4) is complete and intermediate wave (5) upwards has begun.

Within intermediate wave (5), so far minor waves 1 and 2 may be complete.

Within minor wave 3, minute wave ii may not move beyond the start of minute wave i below 2,697.77.



S&P 500 weekly 2018
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Volume last week is much lower than the prior week, which is bearish.

The longer lower wick on the last weekly candlestick and the shaven head are bullish.

The pullback has brought ADX down from very extreme. A possible trend change to down is indicated, but as yet no new trend is indicated.


S&P 500 daily 2018
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On Balance Volume is still bullish, but note that this does not preclude the new main Elliott wave count. Another deep pullback may happen here, which may find support about the 200 day moving average.

The last two daily candlesticks are very bearish for the short term. There is some distance to go before On Balance Volume finds support and halts the fall in price.


VIX daily 2018
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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.

Inverted VIX today has made a new low below the low of five sessions prior, but price has not. This divergence is bearish if inverted VIX is read as a leading indicator.


AD Line daily 2018
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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 small, mid and large caps last week moved upwards. The bounce has support from wide breadth.

Breadth should be read as a leading indicator.

Bearish divergence noted in last analysis has now been followed by a downwards day. It may be resolved here, or it may require another downwards day to resolve it. There is no new divergence today between price and the AD line.


All indices have made new all time highs as recently as five weeks ago, confirming 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 @ 07:47 p.m. EST.