A new all time high was expected from the main Elliott wave count for the short term.

The target is now calculated at two Elliott wave degrees. It remains the same, and price continues to move higher towards the target.

Summary: Both main and alternate wave counts expect the low of the 30th of October to not be breached for many months.

The next target zone for the upwards trend is at 4,585 – 4,608. About this target zone another multi-week pullback or consolidation may develop.

An alternate wave count at the weekly chart level has an about even probability with the main weekly chart.

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

Monthly charts are last updated here with video here.

MAIN WAVE COUNT

WEEKLY CHART

Click chart to enlarge.

Cycle wave V may last from one to several years. So far it is in its tenth month.

This wave count may allow time for the AD line to diverge from price as price makes final highs before the end of the bull market. The AD line most commonly diverges a minimum of 4 months prior to the end of a bull market. A longer divergence is positively correlated with a deeper bear market. A shorter divergence is positively correlated with a more shallow bear market. With zero divergence at this stage, if a surprise bear market does develop here, then it would likely be shallow.

Cycle wave V would most likely subdivide as an impulse. But if overlapping develops, then an ending diagonal should be considered. This chart considers the more common impulse.

Primary waves 1 and 2 may be complete.

Primary wave 3 may only subdivide as an impulse. The target for primary wave 3 is now calculated at both primary and intermediate degrees, so it widens to a zone.

Primary wave 3 has now moved well above the end of primary wave 1. Primary wave 4 may not move into primary wave 1 price territory below 3,588.11.

There is already a Fibonacci ratio between cycle waves I and III within Super Cycle wave (V). The S&P500 often exhibits a Fibonacci ratio between two of its actionary waves but rarely between all three; it is less likely that cycle wave V would exhibit a Fibonacci ratio. The target for Super Cycle wave (V) to end would best be calculated at primary degree, but that cannot be done until all of primary waves 1, 2, 3 and 4 are complete.

DAILY CHART

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Primary waves 1 and 2 may both be complete. Primary wave 3 may be nearing its end.

Primary wave 3 may only subdivide as an impulse.

Intermediate wave (4) may also be complete.

An Elliott channel is added in beige about primary wave 3. The upper edge may provide resistance and initiate pullbacks, which normally occur within an upwards trend.

Intermediate wave (2) was a very deep zigzag lasting 14 sessions. Intermediate wave (4) may be a complete expanded flat lasting 14 sessions. There is alternation and perfect proportion between intermediate waves (4) and (2).

Primary wave 1 looks extended. The target for primary wave 3 expects it to also be extended.

No second wave correction within intermediate wave (5) may move beyond its start below 3,694.12.

HOURLY CHART

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Intermediate wave (5) may subdivide as either an impulse or an ending diagonal. An impulse is much more common, so it is much more likely. An impulse will be expected until and unless overlapping suggests a diagonal should be considered.

Minor waves 1 and 2 within the impulse of intermediate wave (5) may now both be complete. Minor wave 2 may be a brief shallow correction; this is normal for minor degree corrections for this market.

Minute wave ii within minor wave 3 may not move beyond the start of minute wave i below 3,816.68.

Minor wave 3 may exhibit an increase in upwards momentum.

ALTERNATE HOURLY CHART

With a new all time high and bullish technical analysis, today this alternate hourly wave count is discarded.

ALTERNATE WAVE COUNT

WEEKLY CHART

Click chart to enlarge.

This wave count is the same as the first weekly chart with the exception of the degree of labelling within cycle wave V.

If the degree of labelling within cycle wave V is moved down one degree, then only primary wave 1 may be currently unfolding. When primary wave 1 may be complete, then a multi-week pullback or consolidation may begin for primary wave 2. Primary wave 2 may not move beyond the start of primary wave 1 below 2,191.86.

This wave count is more bullish than the main weekly chart. It expects that cycle wave V may be in an earlier stage and may yet last many more years than the main weekly chart expects it to. These two weekly wave counts are of an even probability. In coming months to years classic technical analysis will be used to judge the probability of these two weekly wave counts.

DAILY CHART

Click chart to enlarge.

This wave count is the same as the first daily chart except the degree of labelling is one degree lower within primary wave 1.

The target for a third wave up to end is the same.

TECHNICAL ANALYSIS

WEEKLY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

Last week completes a strong bearish candlestick reversal pattern that has support from volume. This has come when the prior upwards trend did not exhibit extreme conditions. A normal pullback within an ongoing trend looks most likely here.

On Balance Volume suggests more downwards movement here for the short term.

DAILY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

A new all time high on a closing basis today is bullish and continues the series of higher highs and higher lows from the low back in October 2020.

Today a bullish signal from On Balance Volume is given weight; the trend line breached today is long held and tested multiple times, so it has reasonable technical significance.

Neither ADX nor RSI are extreme. There is room for this upwards trend to continue. Regular pullbacks within the trend have caused ADX to be slow to catch up with the trend.

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.

Breadth should be read as a leading indicator.

Lowry’s Operating Companies Only AD line has made a new all time high on the 20th of January. This is a strong bullish signal and supports the main Elliott wave count.

Large caps all time high: 3,872.42 on February 4, 2021.

Mid caps all time high: 2,482.63 on January 25, 2021.

Small caps all time high: 1,258.83 on January 25, 2021.

Last week both price and the AD line have moved lower. Downwards movement in price has support from declining market breadth, but breadth is not declining faster than price. There is no short-term divergence.

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.

Today both the AD line and price have made new all time highs. There is no new divergence. Upwards movement in price has support from rising breadth. This 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 remains well below all time highs. The all time high for inverted VIX was in the week beginning October 30, 2017. There is over 3 years of bearish divergence between price and inverted VIX. There is all of long, mid and short-term bearish divergence. This bearish divergence may develop further before the bull market ends. It may be a very early indicator of an upcoming bear market, but it is not proving to be useful in timing.

Last week both price and inverted VIX have moved lower. Inverted VIX has made new lows below the week beginning December 3, 2020, but price has not. This divergence is bearish for the short term.

Comparing VIX and VVIX: Both VIX and VVIX have moved higher. There is no new divergence.

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.

Today both price and inverted VIX have moved higher. Price has made new all time highs, but inverted VIX has not made a new short-term high. There is again all of short, mid and long-term bearish divergence.

Comparing VIX and VVIX at the daily chart level: VVIX has made a new high above the high of October 28, 2020, but VIX has not. This divergence is bearish for the mid term. Today both VIX and VVIX have moved lower. VVIX has made a new short-term low below the low of the 21st of January, but VIX has not. This divergence is bullish for price for the short term.

DOW THEORY

Dow Theory confirms a new bull market with new highs made on a closing basis:

DJIA: 29,568.57 – closed above on 16th November 2020.

DJT: 11,623.58 – closed above on 7th October 2020.

Adding in the S&P and Nasdaq for an extended Dow Theory, confirmation of a bull market would require new highs made on a closing basis:

S&P500: 3,393.52 – closed above on 21st August 2020.

Nasdaq: 9,838.37 – closed above on June 8, 2020.

The following major swing lows would need to be seen on a closing basis for Dow Theory to confirm a change from bull to a bear market:

DJIA: 18,213.65

DJT: 6,481.20

Adding in the S&P and Nasdaq for an extended Dow Theory, confirmation of a new bear market would require new lows on a closing basis:

S&P500: 2,191.86

Nasdaq: 6,631.42

Published @ 06:31 p.m. ET.

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New updates to this analysis are in bold.