The first target at 2,767 was met and price kept rising. The next target is now used.
Summary: The target is at 2,856. The upwards trend should be assumed to continue as long as price remains within the blue Elliott channel.
The bigger picture still expects that a low may now be in place.
The final target is at 3,045 with a limit at 3,477.39.
This upwards trend shows increasing internal strength: It began with two 90% upwards days close to the low and now the AD line and On Balance Volume have both made new all time highs.
New updates to this analysis are in bold.
The biggest picture, Grand Super Cycle analysis, is here.
The monthly chart was last published here.
ELLIOTT WAVE COUNT
WEEKLY CHART
Click chart to enlarge.
This weekly chart shows all of cycle waves III, IV and V so far.
Cycle wave II fits as a time consuming double combination: flat – X – zigzag. Combinations tend to be more time consuming corrective structures than zigzags. Cycle wave IV has completed as a multiple zigzag that should be expected to be more brief than cycle wave II.
Cycle wave IV may have ended at the lower edge of the Elliott channel.
Within cycle wave V, no second wave correction may move beyond the start of its first wave below 2,346.58.
Although both cycle waves II and IV are labelled W-X-Y, they are different corrective structures. There are two broad groups of Elliott wave corrective structures: the zigzag family, which are sharp corrections, and all the rest, which are sideways corrections. Multiple zigzags belong to the zigzag family and combinations belong to the sideways family. There is perfect alternation between the possible double zigzag of cycle wave IV and the combination of cycle wave II.
Although there is gross disproportion between the duration of cycle waves II and IV, the size of cycle wave IV in terms of price makes these two corrections look like they should be labelled at the same degree. Proportion is a function of either or both of price and time.
Draw the Elliott channel about Super Cycle wave (V) with the first trend line from the end of cycle wave I (at 2,079.46 on the week beginning 30th November 2014) to the high of cycle wave III, then place a parallel copy on the low of cycle wave II. Cycle wave V may find resistance about the upper edge.
It is possible that cycle wave V may end in October 2019. If it does not end there, or if the AD line makes new all time highs during or after June 2019, then the expectation for cycle wave V to end would be pushed out to March 2020 as the next possibility.
DAILY CHART
Click chart to enlarge.
The daily chart will focus on the structure of cycle waves IV and V.
Cycle wave IV now looks like a complete double zigzag. This provides perfect alternation with the combination of cycle wave II. Double zigzags are fairly common corrective structures.
Within Super Cycle wave (V), cycle wave III may not be the shortest actionary wave. Because cycle wave III is shorter than cycle wave I, this limits cycle wave V to no longer than equality in length with cycle wave III at 3,477.39. A target is calculated for cycle wave V to end prior to this point.
Cycle wave V must subdivide as a five wave motive structure, either an impulse or an ending diagonal. An impulse is much more common and that will be how it is labelled. A diagonal would be considered if overlapping suggests it.
Primary wave 1 is labelled as incomplete.
Primary wave 2 may not move beyond the start of primary wave 1 below 2,346.58.
HOURLY CHART
Click chart to enlarge.
If intermediate wave (5) is under way, then within it minor waves 1 through to 3 may be complete.
With this labelling of intermediate wave (5), there is a very close Fibonacci ratio between minor waves 3 and 1. Minor wave 3 shows stronger momentum than minor wave 1.
Minor wave 2 fits as a zigzag. Minor wave 4 fits as a complete double combination: flat – X – zigzag.
The channel is drawn using Elliott’s second technique: the first trend line from the ends of minor waves 2 to 4, then a parallel copy on the end of minor wave 3. The trend channel may show where minor wave 5 ends; it may find resistance about the upper edge of the channel, or it may end about mid way within the channel.
As minor wave 5 continues the lower edge of the channel may provide support.
A breach now of this channel by downwards (not sideways) movement would provide an indication that primary wave 1 may be over and primary wave 2 may be underway.
Within minor wave 5, minute wave iv may not move into minute wave i price territory below 2,757.90.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of et=”_blank”>StockCharts.com.
This week completes a very bullish week. The lower wick and shaven head of this green candlestick is bullish. A little support from volume is bullish.
ADX has not yet caught up with the upwards trend. RSI indicates there is room for it to continue for a reasonable distance.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Over a fairly long period of time this ageing bull market has been characterised by upwards movement on light and declining volume and low ATR. For the short to mid term, little concern may be had if price now rises again on declining volume. Current market conditions have allowed for this during a sustained rise in price.
It is also normal for this market to have lower ATR during bullish phases, and strongly increasing ATR during bearish phases. Currently, declining ATR is normal and not of a concern.
Considering the larger picture from the Elliott wave count, some weakness approaching the end of Grand Super Cycle wave I is to be expected.
From Kirkpatrick and Dhalquist, “Technical Analysis” page 152:
“A 90% downside day occurs when on a particular day, the percentage of downside volume exceeds the total of upside and downside volume by 90% and the percentage of downside points exceeds the total of gained points and lost points by 90%. A 90% upside day occurs when both the upside volume and points gained are 90% of their respective totals”…
and “A major reversal is singled when an NPDD is followed by a 90% upside day or two 80% upside days back-to-back”.
The current situation saw two 80% downside days on December 20th and 21st, then a near 90% downside day with 88.97% downside on December 24th. This very heavy selling pressure on three sessions together may be sufficient to exhibit the pressure observed in a 90% downside day.
This has now been followed by two 90% upside days: on December 26th and again on 4th January.
The current situation looks very much like a major low has been found.
This chart is overall very bullish. Only the moving averages are not yet full bore bullish.
Price does not move in straight lines though. There will be small and large pullbacks within the trend. Use them as opportunities.
BREADTH – AD LINE
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com. So that colour blind members are included, bearish signals
will be noted with blue and bullish signals with yellow.
Every single bear market from the Great Depression and onwards has been preceded by a minimum of 4-6 months divergence between price and the AD line. With the AD line making a new all time high this week, the end of this bull market and the start of a new bear market must be a minimum of 4 months away, which is mid June 2019 at this time.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com. So that colour blind members are included, bearish signals
will be noted with blue and bullish signals with yellow.
Breadth should be read as a leading indicator.
There is now a cluster of bullish signals from the AD line. This supports the Elliott wave count.
The AD line has made another new high above the high of the 3rd of December, but price has not. This divergence is bullish.
VOLATILITY – INVERTED VIX CHART
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com. So that colour blind members are included, bearish signals
will be noted with blue and bullish signals with yellow.
Inverted VIX has made yet another new high above the prior swing high of the weeks beginning 26th of November and 3rd of December 2018, but price has not. This divergence is bullish for the mid term.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com. So that colour blind members are included, bearish signals
will be noted with blue and bullish signals with yellow.
Inverted VIX has made a new high above the prior high of the 3rd of December, but price has not. This divergence is bullish.
DOW THEORY
Dow Theory confirms a bear market. This does not necessarily mean a bear market at Grand Super Cycle degree though; Dow Theory makes no comment on Elliott wave counts. On the 25th of August 2015 Dow Theory also confirmed a bear market. The Elliott wave count sees that as part of cycle wave II. After Dow Theory confirmation of a bear market in August 2015, price went on to make new all time highs and the bull market continued.
DJIA: 23,344.52 – a close on the 19th of December at 23,284.97 confirms a bear market.
DJT: 9,806.79 – price has closed below this point on the 13th of December.
S&P500: 2,532.69 – a close on the 19th of December at 2,506.96 provides support to a bear market conclusion.
Nasdaq: 6,630.67 – a close on the 19th of December at 6,618.86 provides support to a bear market conclusion.
With all the indices moving now higher, Dow Theory would confirm a bull market if the following highs are made:
DJIA: 26,951.81
DJT: 11,623.58
S&P500: 2,940.91
Nasdaq: 8,133.30.
Published @ 01:23 a.m. EST on February 16, 2019.
—
Careful risk management protects your trading account(s).
Follow my two Golden Rules:
1. Always trade with stops.
2. Risk only 1-5% of equity on any one trade.
Yipee!
The new “War Room” trading forum that Bryan has been working on the last few months is ready for Beta testing!
A few traders are going to be getting a trial run next week and I am going to ask Bryan for permission to post share some of our trades with Lara’s subscribers once we are up and running. When the posse trades, we move the market! 🙂
Awesome news. Good luck and may prosperity come your way in this new venture.
UUP may be initiating a C wave down after a completed B wave (with clear a-b-c structure) up. The B wave up got quite close to the 78.6%. Classic. I’m short.
I rather like JD here. The weekly has transitioned from down trend to neutral, the daily is in a consistent up trend, the hourly just just broken a swing high. The weekly is in week 6 of a squeeze with upward momentum. The stop point looks to me to be just under today’s low.
Good morning everybody.
Another green daily candlestick is printing. The target remains the same, the structure still isn’t complete, but it’s getting closer now.
Based on that count, to achieve the intermediate 5 target, doesn’t the final minute v have to be hugely disproportionate relative to the rest of the minor 5 structure?
Hugely…..
It would have to be extended, yes.
Or minor 5 may need to be relabelled.
Yep! 🙂
NDX is squeezing on the hourly, for about 12 hours now. And it’s stalling underneath a major 100% swing high. A falling NDX could be a bellweather…if it happens.
SPX is rather low in a larger and broader channel, pointed up to the ATH level of 2940 with a target arrival date between 2/22 and 3/15.
It’s also riding in a lower channel for 5 weeks but threatening to blow out the top of that with any significant upward push.
There’s a huge fibo cluster not far overhead 2800-2820, with three 100% levels, the 78.6% of the entire cycle 1 down, and a 1.62% extension of a prior upswing. Some significant consolidation under/at this 2800-2820 seems very likely, and a turn off this level has high potential to become a major swing high.
There’s still potential for a turn in this 2775-2780 zone, with a 1.27% extension and a wave equality level (2779, horizontal line But it seems like it’s going to get run right over given the bull rush nature of the market instantly.
Trend is obviously strong up at the daily level. At the weekly level my trend indicator showed last week as week #3 of neutral trend (+DI>-DI but ADX not trending up yet).
The minor wave structure of the intermediate 5 in play is indicating completion of the primary 1 at a significantly lower price level than the intermediate wave structure. I.e., perhaps at the 2800-2820 range.
NYSE is closed for Presidents Day this Monday.
Analysis resumes tomorrow.
Hi Lara,
in your main hourly, minute III looks to be the shortest of the impulse waves?
It does doesn’t it. But it’s not.
Minute i is 26.67 points. Minute iii is 27.41 points.
Hey Y’all,
I would like to update what I’m seeing and what I’m trading.
The comment from Lara about “the trend is the trend until it’s proven otherwise” is a driving force in my strategy. Here is a chart that illustrates that the trend is bullish. It’s the ES 6 month weekly chart.
What we have just done recently is illustrated in this basic technical analysis chart. It’s a concept that we are all very familiar with. This is easier for me to show a picture of than to describe.
Resistance becomes support.
Here is the current chart that shows this. The line of resistance that now is support is the 76.4 % fib line. It is from the fibs that are between the December low and the target of ES 2860. The price action from the last session has verified the ES 2860 target. The target was modeled on the 9th of January 2019 and has remained unchanged since that date. At that time the ES price was about 2569. This chart is the ES 3 week, daily Heikin-Ashi chart.
P.S. — When the ES 2860 level is achieved, the bull run from the December low will have been 543.25 handles. We are currently 83 points from that level.
There are levels of resistance between here and ES 2860. At each level there will be bears created. When the resistance level fails they will become squeezed and drive the market higher. This will repeat over and over until there are no longer traders who are willing to enter short trades. That will occur at ES 2860. At ES 2860 the bull trade from the December low will be finished.
My bias is bullish. I am long and looking to aggressively add fresh long entries to my positions.
Thanks Verne for your answers to my question regarding coin during a SHTF scenario. I should have stated I am looking for something that will be useful for barter. Cash may be useful. Coin may be useful. But both need to be relatively small denominations for everyday barter. That is why I lean toward the American Silver Eagle as it is a relatively small denomination / value especially among PM alternatives. I am glad you think it is a viable option.
I look forward to hearing from other members. I should also ask, “Are the members of this forum taking steps to prepare for a SHTF scenario?” The end of Grand Super Cycle I as Lara projects having a relatively high probability of coming about a year from now, would be one such situation. I’d like to know if members are taking action and If so, what? And if not, why not? Thanks for any input.
I have accumulated all the cash I think I will need. I am in the process of accumulating and storing on site, the coinage I have addressed. Over the next year, I will gather enough food and incidentals for at least a month possibly three. I have most of the gear / equipment I would need in such a situation. I have the things needed for protection as well as enough supplies for protection to last a long, long time. My son is an expert and collector in that arena.
I am also thinking of selling my home and moving into an apartment or lower scale home. I am not sure on this one yet.
Thanks in advance for all those who share your thoughts.
Most welcome Rod.
For purposes of barter as opposed to a more long term store of value, simple 1 and 1/2 ounce silver rounds will definitely be the way to go.
So-called “Junk Silver” which are older issue coins with high Silver content is also a great medium for bartering.
Don’t wait too long to downsize. The 18 Yr RE has already peaked and the market is probably going to be flooded with supply as masses look to exit.
Rodney is this something you’ve decided to do purely from what you believe yourself could happen or have you been looking at Prechter’s opinions ?
I haven’t read anything from Prechter in about 8 years or so. What is he saying?
I have been contemplating preparing for a SHTF scenario for some time. I have been doing some preparing. I do think there is a very strong possibility that residential real-estate will see another 2008 crisis. Harry Dent is one who is strongly pushing that idea. He has been right before and he has been wrong for many years in a row predicting the collapse of markets. So I am not sure what to think. I also read / follow others like James Rickards, Peter Schiff, Lynett Zang, Bill Holter, Jim Willie and Gerald Celente. Sometimes I think they are over the top and a broken clock is right once a day. But other times I take their words seriously. When I mix it all with a possible Grand Super Cycle top that Lara is predicting, I think I should take heed and take action.
None of my preparing is crazy over the top. I do not have an underground bunker or anything like that. Everything I do is just good practical actions that would benefit all. I am also thinking of selling my home because I may be retiring at the end of 2020. However, because of being laid up after surgery these past six weeks, I am thinking I may not want to retire. I guess you could say I am in a transition period right now.
Bottom line, I wondered if others on this forum were preparing for a SHTF or economic collapse scenario and if so, what they were doing to prepare. If anyone has thoughts, I’d love to hear them. Thanks all.
Prechter has basically said what you’ve mentioned. He detailed it all in his book “Conquer the Crash”
#1 like a bullet. Have a great weekend all.
I have a question for our members. For those of you who are storing physical gold and / or silver for the day the SHTF, what coin or bar etc are you using / accumulating? And, where do you buy it? My tendency has been to American Silver Eagles. I’d love to hear your thoughts.
American Eagles are a great choice.
If you are a “U.S. Person” and subject to IRS rules, American coins offer some tax advantages as well. When you go through US customs, for declaration purposes the face value of the coin is used. Even some customs agents may not be aware of this and may have to be informed of what the rules are.
I am personally very fond of Mexican Libertads, S.A. Kruggerands (love the hue from the copper content!) and my very favorite coin is the Austrian Philharmonic.
The Gold Buffalo is also quite beautiful in my opinion.
The very best way to accumulate non-numismatic precious metals is to find a local dealer and become a regular customer and don’t be afraid to ask for a discount if you buy regularly.
If you can buy in bulk, you will not find a better deal than monster boxes of Silver Eagles. The boxes contain 500 coins, and most dealers will cover shipping and insurance. You will pay more than you would for plain old Silver rounds but they offer the advantage of instant world wide recognition.
The best dealer I have ever worked with is Michael Checkan at Asset Strategies International (A.S.I)
My favorite way to accumulate P.M. is the metal dividend program offered by GORO, the Gold mining company. Not a lot of people know about this.
Obviously you need to hold a large number of shares to make signing up for the program worth the effort. They will ship your dividend metal in Gold or Silver anywhere in the world! They even have their own coin! Requires a bit of paper-work and it is a bummer that they will not let you use the program in a retirement account. As a long term strategy, I think it is a very attractive approach.
🙂
Hi Rodney,
I agree with Verne: Stick to the coins that are recognizable around the world. Basically all the coins Verne mentioned.
Furthermore, I’m a fan of what some called “semi-numismatic” coins. A great example of that is the Perth Mint (both gold and silver) coins that come out annually to commemorate the Lunar New Year. Many times you can get these coins very close to the premium you pay for Silver Eagles, or other national coins. BUT, they tend to become more valuable over time since there is a limited mintage on most of them… The Perth Mint gold and silver coins are the only semi-numismatic coins I recommend…
Thanks ari. I find it interesting that no one has mentioned any actions taken to prepare for an economic collapse or a SHTF scenario. Are members not interested or concerned? Do members not want to reveal such things on this forum? Do members think it is not going to happen or if it happens it will just be an 18 month recession followed by a return to normalcy and a new bull market? Or something else? Interesting to me.