A small range downwards day saw price move mostly sideways. Price remains above the Elliott wave invalidation points and within the channel. Targets remain the same.
Summary: The next target for a pullback or consolidation to begin is now at 2,918. The upwards trend remains intact.
The final target remains the same at 3,045. Alternate monthly wave counts allow for a target as high as 4,119.
New updates to this analysis are in bold.
The biggest picture, Grand Super Cycle analysis, is here.
Monthly charts were last published here. Video is here.
ELLIOTT WAVE COUNTS
MAIN 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. Thereafter, the next possibility may be October 2020. March and October are considered as likely months for a bull market to end as in the past they have been popular. That does not mean though that this bull market may not end during any other month.
DAILY CHART
Click chart to enlarge.
The daily chart will focus on the structure of cycle wave V.
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 2 may have been a very brief and shallow expanded flat correction.
Within primary wave 3, intermediate waves (1) and (2) may be complete. Intermediate wave (3) may be incomplete.
When intermediate wave (3) is complete, then intermediate wave (4) may not move into intermediate wave (1) price territory below 2,852.42.
The channel shows where small pullbacks are finding support. It may continue to do so, but the S&P does not always fit well within channels. It is possible that the channel may be breached and price may continue higher to find resistance at the lower edge of the channel.
HOURLY CHART
Click chart to enlarge.
The hourly chart shows all of intermediate wave (3) so far.
Intermediate wave (3) may be extending. Within intermediate wave (3), minor waves 1 through to 4 may be complete. Minor wave 3 is 9.2 points short of 2.618 the length of minor wave 1. A target is calculated for minor wave 5 to exhibit the most common Fibonacci ratio to minor wave 1.
Minor wave 5 may end mid way within the blue Elliott channel, or about the upper edge.
When it arrives, intermediate wave (4) may be relatively shallow. It may find support about the lower edge of the best fit channel.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of et=”_blank”>StockCharts.com.
Resistance about 2,880 has been overcome. Next resistance is about the prior all time high about 2,940.
On Balance Volume makes another new all time high last week strongly supporting the Elliott wave count.
A decline in volume while price moves higher is not of concern given current market conditions. This has been a feature of this market for a long time and yet price continues higher.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
The December 2018 low is expected to remain intact. The two 90% upwards days on 26th December 2018 and 6th January 2019 indicate this upwards trend has internal strength.
Lowry’s data shows that on the 8th of April Selling Pressure has reached another new low for this bull market, and Buying Power has reached a new high for this rally. This indicates an expansion in demand and a contraction in supply, which has historically been associated with strong phases of bull markets. This strongly supports the Elliott wave count, which expects new all time highs to come this year.
While the last swing low of the 25th of March remains intact, there exists a series of higher highs and higher lows from the major low in December 2018. It would be safest to assume the upwards trend remains intact.
The pennant pattern is a reliable short-term continuation pattern. A target calculated using the flag pole is about 2,956.
A gap up on Friday may be another breakaway gap from a very small consolidation. It may provide support at 2,893.42. The breakaway is supported by volume for the short term.
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 months divergence between price and the AD line. With the AD line making a new all time high again last 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 the end of July 2019 at this time.
Last week the AD line makes another new all time high. Bullish mid-term divergence continues.
Both mid and large caps have made new swing highs above the prior highs of the 25th of February, but small caps have not. This indicates some selectivity within this upwards trend.
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.
Today both price and the AD line moved slightly lower. Downwards movement had a normal decline in breadth, but breadth is not declining any faster than price. There is no new short-term divergence.
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.
Last week both price and inverted VIX have moved higher. There is no mid or short-term divergence. Long-term divergence between all time highs remains.
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.
Both price and inverted VIX moved lower today. There is no new short-term divergence.
DOW THEORY
Dow Theory confirmed a bear market in December 2018. 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 @ 06:56 p.m. EST.
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Wow. That’s a long tail on the hourly close.
Hourly chart updated:
If intermediate (3) is now over there are Fibonacci ratios between all of minor waves 1, 3 and 5.
Intermediate (4) may be brief and shallow, the last open gap from last Friday may continue to provide support and may remain open.
Lara,
Did you mean to give Primary 3 a target of 2918 versus the longstanding target of 3010?
No, sorry, I didn’t. That target was meant for intermediate (3).
Only one coffee when I put that up. The target should be deleted.
session chart in progress
not that, maybe this channel
not what they’re looking at
here is the cob chart … close of business
Anyone going to short uber right out of the gate?
$100 billion for a company that’s losing HOW MANY BILLION A YEAR? Oh, the current rate is FOUR BILLION A YEAR in losses. And has NO HOPE of ever being profitable, unless/until MAYBE they can replace all the drivers (those pesky and very expensive hu-mons) with automated cars?
I think the whole thing a bit psycho myself. More than a bit. Which perhaps just shows how little I know.
But here’s LYFT…opened at 87, now at 57. I think the puts on UBER are going to be rather expensive…
Good thoughts …
Some trade ideas: GD is breaking up and out of a clear symmetric triangle. Has pulled back to a retest of the break out, and turned back up. I’ve taken a simple bull call spread there for May. ROKU pulled back to a major 38% and has turned off it. The weekly is still in an up trend (the daily is not due to the pullback), and the hourly is back to “up”. ROKU in general has been a leader for many months. I’m long a few ROKU shares.
GD daily. Long squeeze has exited with an upward push, MACD is above zero line and bullish, trend is strong up. Breakout, test, and push back up off the upper triangle line. I like it.
Some ideas along the lines of the uber/lyft scenario. GD will benefit from BA defense difficulties (as you point out). Airbus will benefit from BA commercial plane difficulties. Here is the Airbus chart.
If Airbus retraces 50% to the 100.00 level, it would make for a great long term holding.
Prime position.
Rascal!