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Upwards movement continues exactly as the main Elliott wave count and classic technical analysis expect. When classic technical analysis offers strong support to the Elliott wave count, then confidence may be had in the analysis overall.

Summary: The short term target is at 2,824 or 2,915. The mid to longer term target is at 2,922 (Elliott wave) or 3,045 (classic analysis). The final target for this bull market to end remains at 3,616.

The Elliott wave count has good support from classic technical analysis. Price has support from rising market breadth and declining volatility and rising volume.

Pullbacks are an opportunity to join the trend. An upwards trend is expected to be developing. It is possible that upwards movement may show a further increase in momentum over the next several days.

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

New updates to this analysis are in bold.

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

Last historic analysis with monthly charts is here, video is here.



S&P 500 Weekly 2018
Click chart to enlarge.

Cycle wave V must complete as a five structure, which should look clear at the weekly chart level and also now at the monthly 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 first trend line from the ends of intermediate waves (2) to (4), then a parallel copy on the end of intermediate wave (3). Intermediate wave (5) may end either midway within the channel, or about the upper edge.

Intermediate wave (4) may now be a complete regular contracting triangle lasting fourteen weeks, one longer than a Fibonacci thirteen. There is perfect alternation and excellent proportion between intermediate waves (2) and (4).

If intermediate wave (4) were to continue further as either a flat or combination, both possibilities would require another deep pullback to end at or below 2,532.69. With both On Balance Volume and the AD line making new all time highs, that possibility looks extremely unlikely.

If intermediate wave (4) were to continue further, it would now be grossly disproportionate to intermediate wave (2). Both classic technical analysis and Elliott wave analysis now suggest these alternate ideas should be discarded based upon a very low probability.

Within intermediate wave (5), no second wave correction may move beyond the start of its first wave below 2,594.62.


S&P 500 Daily 2018
Click chart to enlarge.

It is possible that intermediate wave (4) is a complete regular contracting triangle, the most common type of triangle. Minor wave E may have found support just below the 200 day moving average and ending reasonably short of the A-C trend line. This is the most common look for E waves of triangles.

Intermediate wave (3) exhibits no Fibonacci ratio to intermediate wave (1). It is more likely then that intermediate wave (5) may exhibit a Fibonacci ratio to either of intermediate waves (1) or (3). The most common Fibonacci ratio would be equality in length with intermediate wave (1), but in this instance that would expect a truncation. The next common Fibonacci ratio is used to calculate a target for intermediate wave (5) to end.

Price has clearly broken out above the upper triangle B-D trend line. This indicates that it should now be over if the triangle is correctly labelled.

A trend line in lilac is added to this chart. It is the same line as the upper edge of the symmetrical triangle on the daily technical analysis chart. Price has found support about this line at the last two small swing lows. The suppport at this line has reasonable technical significance now that it has been tested twice, and this line should be assumed to continue to provide support until proven otherwise.

Sometimes the point at which the triangle trend lines cross over sees a trend change. A trend change at that point may be a minor one or a major one. That point is now about the 12th of June, but may change to the 14th of June on Monday because MotiveWave does not allow for weekends to print no candlesticks.

Minor wave 3 may only subdivide as an impulse, and within it the subdivisions of minute waves ii and iv may show up as one or more red daily candlesticks or doji.

Within minor wave 3, no second wave correction may move beyond the start of its first wave below 2,676.81. Along the way up, any deeper corrections may now find support at the lower edge of the base channel drawn about minor waves 1 and 2. Minor wave 3 may have the power to break above the upper edge of the base channel. If it does, then that upper edge may then provide support.


S&P 500 Hourly 2018
Click chart to enlarge.

Minor wave 3 may only subdivide as an impulse, and within it all third waves at all degrees may only subdivide as impulses.

This main hourly wave count is now preferred as it fits better with MACD. Momentum for Friday’s upwards movement is slightly waning and this coincides with the fifth wave for minuette wave (v).

Within the impulse of minute wave iii, minuette wave (iii) is shorter than minuette wave (i). This limits minuette wave (v) to no longer than equality in length with minuette wave (iii), so that minuette wave (iii) is not the shortest actionary wave within the impulse and the core Elliott wave rule is met.

A possible target for minute wave iii to end may be about 2,792, where minuette wave (v) would reach 0.618 the length of minuette wave (i).

Minuette wave (iv) may not move into minuette wave (i) price territory below 2,751.61.

When minute wave iii may be complete, then the invalidation point must move down to the high of minute wave i at 2,729.34, and the following correction for minute wave iv may not move into minute wave i price territory. Minute wave iv may end within the price territory of the fourth wave of one lesser degree; minuette wave (iv) has its range from 2,779.90 to 2,760.16.


S&P 500 Hourly 2018
Click chart to enlarge.

This alternate wave count now has a lower probability than the main hourly wave count. Friday’s upwards movement shows weaker momentum and this does not coincide with the middle of a third wave at four degrees.

Both wave counts are identical up to the low labelled minuette wave (ii). Thereafter, for this alternate, the degree of labelling within minuette wave (iii) is moved down one. Within minuette wave (iii), only subminuette waves i and ii may be complete.

This wave count now sees four first and second waves complete. A strong increase in upwards momentum should begin about here as the middle of a third wave unfolds higher.

Within subminuette wave iii, no second wave correction may move beyond its start below 2,760.16.



S&P 500 weekly 2018
Click chart to enlarge. Chart courtesy of

This week closes very bullish with support from volume. The gap open this week moves up from a small three week consolidation, so it may be a breakaway gap; if this is correct, then the lower edge may provide support at 2,736.93.

The bullish signal from On Balance Volume is now very clear. If next week sees On Balance Volume move higher again, then it may make a new all time high; if it does, then that would be a very bullish signal.

Overall, this chart is fairly bullish.


S&P 500 daily 2018
Click chart to enlarge. Chart courtesy of

The symmetrical triangle may now be complete, and price has completed an upwards breakout. There may be some small cause for concern that the upwards breakout does not have support from volume. However, in current market conditions only some small concern is had here. Rising price on light and declining volume has been a feature of this market for years, yet price continues to rise.

After an upwards breakout, pullbacks occur 59% of the time. The pullback looks typical. With price now moving up and away from the line, it does look like the pullback may be over.

On Balance Volume made a new all time high on the 14th of May at the daily chart level. This signal remains overall very bullish.

The base distance is 340.18. Added to the breakout point of 2,704.54 this gives a target at 3,044.72. This is above the Elliott wave target at 2,922, so the Elliott wave target may be inadequate.

On Balance Volume remains slightly bearish for the short term as it still has not made a new high above the prior swing high of the 14th of May while price has, but the difference for On Balance Volume is so very slight no weight will be given to this in today’s analysis.

There is no new divergence between price and On Balance Volume. Friday’s candlestick is very bullish.

Stochastics may remain overbought for a reasonable period of time during a bull trend for this market.


VIX daily 2018
Click chart to enlarge. Chart courtesy of 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 has made a new high above the prior swing high of the 9th of March, but price has not made a corresponding new swing high about the same point yet. This divergence is bullish. Inverted VIX is still a little way off making a new all time high.

There is no new divergence today.


AD Line daily 2018
Click chart to enlarge. Chart courtesy of

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. New all time highs from the AD line means that any bear market may now be an absolute minimum of 4 months away. It may of course be a lot longer than that. My next expectation for the end of this bull market may now be October 2019.

Small caps made a new all time high last week. Now mid caps make a new all time high this week. It is large caps that usually lag in the latter stages of a bull market, so this perfectly fits the Elliott wave count. Expect large caps to follow to new all time highs.

Breadth should be read as a leading indicator.

The AD line is daily making new all time highs. This is a very bullish signal and will be given the most weight in today’s analysis. Price is likely to follow within days or a very few weeks.


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: 23,360.29.

DJT: 9,806.79.

S&P500: 2,532.69.

Nasdaq: 6,630.67.

Only Nasdaq at this stage is making new all time highs. DJIA and DJT need to make new all time highs for the ongoing bull market to be confirmed.

Charts showing each prior major swing low used for Dow Theory may be seen at the end of this analysis here.

Published @ 12:24 a.m. EST on 9th June, 2018.