A small inside day remains below the invalidation point on both Elliott Wave hourly charts.
Summary: A correction was still most likely over at the last high two days ago. A short term target for the next wave down is 1,987.
Trading advice (not intended for more experienced members): Short positions entered reasonably above 2,100 should hold, and shorts opened today at the high when price touched and slightly overshot the black trend line should hold. Stops may be moved to break even to reduce risk if positions are positive. Corrections upwards present an opportunity to join the trend.
Looking at the bigger picture, any short positions entered here should be profitable this week and may still offer a very good risk / reward set up. However, any members entering short here must understand there is a risk the position may be underwater for several days before becoming profitable. With that in mind, it is essential to manage risk: no more than 5% of equity should be risked if entering short here.
Stops (and risk) for new positions must be just above 2,120.55.
Last published monthly charts are here.
New updates to this analysis are in bold.
BEAR ELLIOTT WAVE COUNT
WEEKLY CHART
Click chart to enlarge.
The box is added to the weekly chart. Price has been range bound for months. A breakout will eventually happen. The S&P often forms slow rounding tops, and this looks like what is happening here at a monthly / weekly time frame.
Primary wave 1 is seen as complete as a leading expanding diagonal. Primary wave 2 would be expected to be complete here or very soon indeed.
Leading diagonals are not rare, but they are not very common either. Leading diagonals are more often contracting than expanding. This wave count does not rely on a rare structure, but leading expanding diagonals are not common structures either.
Leading diagonals require sub waves 2 and 4 to be zigzags. Sub waves 1, 3 and 5 are most commonly zigzags but sometimes may appear to be impulses. In this case all subdivisions fit perfectly as zigzags and look like threes on the weekly and daily charts. There are no truncations and no rare structures in this wave count.
The fourth wave must overlap first wave price territory within a diagonal. It may not move beyond the end of the second wave.
Leading diagonals in first wave positions are often followed by very deep second wave corrections. Primary wave 2 would be the most common structure for a second wave, a zigzag, and fits the description of very deep. It may not move beyond the start of primary wave 1 above 2,134.72.
So far it looks like price is finding resistance at the lilac trend line. Price has not managed to break above it.
DAILY CHART
Click chart to enlarge.
Primary wave 2 would be a 0.96 correction of primary wave 1. Second wave corrections following first wave leading diagonals are commonly very deep, so this fits the most common pattern if primary wave 1 was a leading diagonal.
The most common structure for a second wave correction is a zigzag.
There is no Fibonacci ratio between intermediate waves (A) and (C).
Draw a channel about primary wave 2 using Elliott’s technique for a correction: draw the first trend line from the start of the zigzag, then a parallel copy on the end of intermediate wave (A).
Intermediate wave (C) is a complete impulse and primary wave 2 is a complete zigzag. With two full daily candlesticks below the wide black channel and not touching the lower edge, there is some confidence that primary wave 2 is over.
At this stage, it looks like minor wave 1 ended at the low for last week and minor wave 2 may have ended yesterday with a throwback to test resistance at the lower edge of the black channel. It looks like price today found resistance at the cyan line and has remained below the black trend line.
Minor wave 2 may have been quicker than expected, totalling a Fibonacci two days.
Intermediate wave (C) lasted a Fibonacci thirteen days. Intermediate wave (B) lasted a Fibonacci twenty-one days and intermediate wave (A) lasted forty seven days (not a Fibonacci number). Primary wave 2 would have lasted eighty one days (also not a Fibonacci number). If primary wave 3 exhibits a Fibonacci duration, then a reasonable estimate would be a Fibonacci 144 days.
A new low below 2,025.91 would provide final price confirmation of a trend change. At that stage, downwards movement could not be a second wave correction within intermediate wave (C) and so intermediate wave (C) would have to be over.
The targets calculated are provisional only. They come with the caveat that price may yet move higher which means the targets would move correspondingly higher. They also come with the caveat that at this very early stage a target for primary wave 3 may only be calculated at primary degree. When intermediate waves (1) through to (4) within primary wave 3 are complete, then the targets may change as they can be calculated at more than one wave degree. Primary wave 3 may not exhibit a Fibonacci ratio to primary wave 1.
The first target at 1,595 is where primary wave 3 would reach 1.618 the length of primary wave 1. This target would most likely not be low enough because primary wave 2 is very deep at 0.96 the length of primary wave 1. Primary wave 3 must move below the end of primary wave 1, and it must move far enough below to allow subsequent room for primary wave 4 to unfold and remain below primary wave 1 price territory. Normally, there is a gap between first wave and fourth wave price territory, particularly in a bear market.
The next target may be more likely. At 1,271 primary wave 3 would reach 2.618 the length of primary wave 1.
If primary wave 3 does not exhibit a Fibonacci ratio to primary wave 1, then neither of these targets would be correct.
Well before these targets, it should be obvious if the next wave down is a primary degree third wave. It should exhibit increasing ATR, strong momentum, and a steep slope. However, please note that although it may begin very strongly it does not have to. It may also be that intermediate wave (1) maintains an ATR about 20 – 30 and has some deep time consuming corrections within it. That was how the last primary degree third wave began within the last bear market, so it may happen again.
MAIN HOURLY CHART
Click chart to enlarge.
Ratios within minor wave 1 are: minute wave iii is just 0.24 points longer than 1.618 the length of minute wave i, and minute wave v is 1.69 points short of 2.618 the length of minute wave iii.
Ratios within minute wave v are: minuette wave (iii) is 1.72 points short of 2.618 the length of minuette wave (i), and minuette wave (v) is 1.26 points longer than equality in length with minuette wave (iii).
With excellent Fibonacci ratios, this labelling has a good probability. The only problem is the proportion of minuette wave (iv) to minuette wave (ii), but the S&P does not always exhibit good proportions.
Minor wave 2 may be over as a quick deep zigzag. There is no Fibonacci ratio between minute waves a and c within it. Minute wave c overshoots the channel about this zigzag, which is fairly typical of C waves. Price tested resistance at the black trend line and moved above it to find support.
Price during this session found resistance at the cyan trend line. At the end of the session, price has broken below the pink channel which contained minor wave 2. This is a weak indicator that minor wave 2 may be over.
Minute wave ii may not move beyond the start of minute wave i above 2,100.66. At 1,987 minor wave 3 would reach 1.618 the length of minor wave 1. If price keeps falling through this first target, then the next target would be at 1,917 where minor wave 3 would reach 2.618 the length of minor wave 1.
A new low below 2,079.62 would invalidate the alternate hourly wave count below. At that stage, more confidence may be had that minor wave 2 is very likely over.
ALTERNATE HOURLY CHART
Click chart to enlarge.
Minor wave 2 may be unfolding as an expanded flat correction. Divergence between price and MACD at the hourly chart level supports this wave count, but it is not supported at lower time frames.
Ratios within minor wave 1 are: minute wave iii is just 0.24 points longer than 1.618 the length of minute wave i, and minute wave v has no Fibonacci ratio to either of minute waves i or iii.
Ratios within minute wave v are: there is no Fibonacci ratio between minuette waves (i) and (iii), and minuette wave (v) is just 0.06 short of 0.382 the length of minuette wave (i) (ratios here calculated on the five minute chart).
With reasonable Fibonacci ratios for this labelling, it has a reasonable probability.
Within minor wave 2, minute wave b would be a 1.69 length of minute wave a. This is longer than the common length but within allowable limits.
The structure of minute wave c is incomplete. It must subdivide as a five. So far minuette waves (i) through to (iv) may be complete. If it moves any lower, minuette wave (iv) may not move into minuette wave (i) price territory below 2,079.62.
At 2,112 minuette wave (v) would reach equality in length with minuette wave (i).
Minor wave 2 may not move beyond the start of minor wave 1 above 2,120.55.
This wave count expects still one more day most likely of upwards movement to complete a correction. However, the round number pivot of 2,100 and the black trend lines would be expected to provide strong resistance. This favours the main hourly wave count over this alternate which must overcome some of that resistance before returning downwards.
BULL ELLIOTT WAVE COUNT
WEEKLY CHART
Click chart to enlarge.
Cycle wave IV is seen as a complete flat correction. Within cycle wave IV, primary wave C is still seen as a five wave impulse.
Intermediate wave (3) has a strong three wave look to it on the weekly and daily charts. For the S&P, a large wave like this one at intermediate degree should look like an impulse at higher time frames. The three wave look substantially reduces the probability of this wave count. Subdivisions have been checked on the hourly chart, which will fit.
Cycle wave II was a shallow 0.41 zigzag lasting three months. Cycle wave IV may be a complete shallow 0.19 regular flat correction, exhibiting some alternation with cycle wave II and lasting nine months. Cycle wave IV would be grossly disproportionate to cycle wave II, and would have to move substantially out of a trend channel on the monthly chart, for it to continue further sideways as a double flat, triangle or combination. For this reason, although it is possible, it looks less likely that cycle wave IV would continue further. It should be over at the low as labelled.
At 2,500 cycle wave V would reach equality in length with cycle wave I.
Price has now broken a little above the bear market trend line. This line is drawn from the all time high at 2,134.72 to the swing high labelled primary wave B at 2,116.48 on November 2015. This line is drawn using the approach outlined by Magee in the classic “Technical Analysis of Stock Trends”. To use it correctly we should assume that a bear market remains intact until this line is breached by a close of 3% or more of market value. Now that the line is breached, the price point at which it is breached is calculated about 2,093.58. 3% of market value above this line would be 2,156.38, which would be above the all time high and the confirmation point.
This wave count requires price confirmation with a new all time high above 2,134.72.
While price has not made a new high, while it remains below the final trend line (lilac) and while technical indicators point to weakness in upwards movement, this very bullish wave count comes with a strong caveat. I still do not have confidence in it. It is produced as an alternate, because all possibilities must be considered. Price managed to keep making new highs for years on light and declining volume, so it is possible that this pattern may continue to new all time highs for cycle wave V.
The invalidation point will remain on the weekly chart at 1,370.58. Cycle wave IV may not move into cycle wave I price territory.
This invalidation point allows for the possibility that cycle wave IV may not be complete and may continue sideways for another one to two years as a double flat or double combination. Because both double flats and double combinations are both sideways movements, a new low substantially below the end of primary wave C at 1,810.10 should see this wave count discarded on the basis of a very low probability long before price makes a new low below 1,370.58.
DAILY CHART
Click chart to enlarge.
Intermediate wave (2) may still be an incomplete flat correction. Minor wave A will subdivide as a three, a double zigzag, and minor wave B may be seen as a single zigzag.
The most likely point for intermediate wave (2) to end would be the 0.618 Fibonacci ratio at 1,920.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,810.10.
While it is possible that intermediate wave (2) may be a complete double zigzag at the low labelled minor wave A, this would be a very shallow and rather quick second wave correction. The first reasonable second wave correction within a new bull market should be expected to be deeper and more time consuming for this bull wave count, so intermediate wave (2) is expected to continue.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
The reversal implication of the shooting star candlestick pattern for last week is now confirmed by a strong red weekly candlestick which gapped down. This week’s candlestick pattern may be considered to have completed an Evening Doji Star pattern, albeit with two doji at the high.
Along the way down, price may find some support about 2,040.
Upwards movement made an important new high last week but could not manage to break above the final lilac line of resistance. That line remains intact and is now strengthened.
Volume has increased for a downwards week, but as this includes an options expiry date it should not be considered as definitive. Volume for the two downwards weeks prior also showed some increase, although volume was light. It looks like so far the market may be falling of its own weight; selling pressure is light. If selling pressure increases, then look out for a strong increase in downwards momentum.
On Balance Volume trend lines are redrawn this week: support in yellow and resistance in purple. OBV would allow for a little further downwards movement before it finds support at the first yellow line. This may indicate where a bounce may turn up.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Volume data on StockCharts is different to that given from NYSE, the home of this index. Comments on volume will be based on NYSE volume data when it differs from StockCharts.
Lighter volume for a green daily candlestick for today’s session is bearish. Volume declines as price moves slightly higher; the rise in price is not supported, so it is suspicious. This supports the Elliott wave count.
ADX now is clearly declining indicating the market is not trending. ADX has not indicated a trend change though; the -DX line remains above the +DX line. If ADX again increases, then a downwards trend would be indicated.
ATR may overall be slightly increasing from a low about 16 on 9th June to about 18 now. ATR overall indicates a trend may be developing. If ATR and ADX come to agreement, then more confidence may be had that the market is trending. Some disagreement between these two indicators at the start of a new trend is to be expected.
On Balance Volume found support at the upper yellow trend line and moved up from there. There is plenty of room for price to rise before OBV may find resistance at the purple trend line. A break below the yellow line would be a strong bearish signal from OBV.
RSI is neutral. There is plenty of room for price to rise or fall.
Stochastics is returning from oversold, but this oscillator may remain extreme for reasonable periods of time during a trending market.
VOLATILITY – INVERTED VIX MONTHLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Several instances of large divergence between price and VIX (inverted) are noted here. Blue is bearish divergence and yellow is bullish divergence (rather than red and green, for our colour blind members).
Volatility declines as inverted VIX rises, which is normal for a bull market. Volatility increases as inverted VIX declines, which is normal for a bear market. Each time there is strong multi month divergence between price and VIX, it was followed by a strong movement from price: bearish divergence was followed by a fall in price and bullish divergence was followed by a rise in price.
There is still current multi month divergence between price and VIX: from the high in April 2016 price has made new highs in the last few days but VIX has failed so far to follow with new highs. This regular bearish divergence still indicates weakness in price.
VOLATILITY – INVERTED VIX DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
There is now only one instance of hidden bearish divergence noted on this daily chart of price and VIX (blue lines). VIX makes higher highs as price makes lower highs. The decline in volatility is not matched by a corresponding rise in price. Price is weak.
VIX (inverted) has run away strongly from price. Volatility sharply increased beyond the prior point of 19th May (yellow lines) while price fell.
A divergence 101 interpretation of this is bullish. Volatility is stronger than it was on 19th of May, but this has not translated into a corresponding new low for price. Price is weak. Some upwards reaction would be a reasonable expectation about here to resolve this divergence. At this stage, it looks like that interpretation was correct as it has been followed by some upwards movement from price.
Price fell after the short term bearish divergence noted here (short blue lines). Now, after short term bullish divergence (yellow lines), price is rising.
Volatility increased today as price moved higher. This is not normal. This short term divergence between price and VIX is bearish and supports the Elliott wave count at least short term.
While I would not give much weight to divergence between price and many oscillators, such as Stochastics, I will give weight to divergence between price and VIX. Analysis of the monthly chart for the last year and a half shows it to be fairly reliable.
BREADTH – ADVANCE DECLINE LINE
Click chart to enlarge. Chart courtesy of StockCharts.com.
With the AD line increasing, this indicates the number of advancing stocks exceeds the number of declining stocks. This indicates that there is breadth to prior upwards movement.
Taking a look at the bigger picture back to and including the all time high on May 2015, the AD line is making substantial new highs but price so far has not. While market breadth is increasing beyond the point it was at in May 2015, this has not translated (yet) into a corresponding rise in price. Price is weak. This is hidden bearish divergence.
DOW THEORY
The last major lows within the bull market are noted below. Both the industrials and transportation indicies have closed below these price points on a daily closing basis; original Dow Theory has confirmed a bear market. By adding in the S&P500 and Nasdaq a modified Dow Theory has not confirmed a new bear market.
Within the new bear market, major highs are noted. For original Dow Theory to confirm the end of the current bear market and the start of a new bull market, the transportation index needs to confirm. It has not done so yet.
Major lows within the prior bull market:
DJIA: 15,855.12 (15th October, 2014) – closed below on 25th August, 2015.
DJT: 7,700.49 (12th October, 2014) – closed below on 24th August, 2015.
S&P500: 1,821.61 (15th October, 2014) – has not closed below this point yet.
Nasdaq: 4,117.84 (15th October, 2014) – has not closed below this point yet.
Major highs within the new bear market:
DJIA: 17,977.85 (4th November, 2015) – closed above on 18th April, 2016.
DJT: 8,358.20 (20th November, 2015) – has not closed above this point yet.
S&P500: 2,116.48 (3rd Nobember, 2015) – has now closed above this point on 8th June, 2016.
Nasdaq: 5,176.77 (2nd December, 2015) – has not closed above this point yet.
It is a reasonable conclusion that the indices are currently in a bear market. The trend remains the same until proven otherwise. Dow Theory is one of the oldest and simplest of all technical analysis methods. It is often accused of being late because it requires huge price movements to confirm a change from bull to bear. In this instance, it is interesting that so many analysts remain bullish while Dow Theory has confirmed a bear market. It is my personal opinion that Dow Theory should not be accused of being late as it seems to be ignored when it does not give the conclusion so many analysts want to see.
This analysis is published @ 09:41 p.m. EST.
Here is the last time we saw such a strong candle following an upper BB penetration by VIX.
Analysis is finally written and being proofed now.
I’m really concerned after the session closed and VIX data is available at the bullish divergence there. I take VIX divergence seriously, it usually indicates the next direction for price.
I have a new wave count expecting minor 2 is going to move higher tomorrow as a double zigzag. Invalidation point still at 2,120.55.
The only more bullish wave count I can see so far is Peters idea of an ending contracting diagonal for intermediate (C). I still don’t like it, price is fully below the channel containing primary wave 2 now and finding resistance at the lower edge. I know the S&P doesn’t always play nicely with trend channels, but that one is a big on on the daily chart about a large movement. It should be somewhat reliable in indicating an end to the trend, a channel of that size.
Anyway, I’m charting Peters idea and if it shows itself to be true then I’ll publish it. For now, I don’t like it. It doesn’t look right.
Minor 2 moving higher though is entirely reasonable.
I’m holding onto my short entered at 2,117 and looking to exit the second position entered at 2,091. After hours movement may bring price down a bit in a few hours, if it does I’ll exit the second short and then open a long to hedge the move up I’m expecting tomorrow. Not sure where i’ll set my stop for that one ATM, will post if and when I do that.
I am not seeing divergence with VIX today Lara. VIX closed near its high for the day and SPX closed near its low as well. Are you looking at a time frame other than intra-day?
This is what I’m seeing on StockCharts. Daily.
From the low 13th June to today. I’m seeing inverted VIX move strongly lower today to make a new low.
Are you looking at this somewhere else? If so, can you upload a chart or point me to your source?
O.K. I see the difference. Your chart is showing the CLOSING price. I tend to look at intra-day spikes for assessing divergence for trading decisions. I get it and you are right. VIX today made a new closing high above the close from June 16, which saw a higher intra-day high. “Never mind!” 🙂
Ah, okay then.
Was a bit worried I had it wrong there….
I took a look at the last time VIX was at this level and it was on Feb 26 when SPX was at 1945.78 low for the day. I guess in that sense VIX has made a high seemingly not commensurate with SPX price action we saw back in Feb and I am guessing that is what your are looking at. It could also be that VIX is saying something about the nature of the decline ahead as opposed go being bullish divergence on a monthly time frame. It may be that SPX will play catch up….that candle today was very strong…
Correction: That strong VIX candle was actually on Jan 13 and the low that day was 1886.41. Sorry about the error!
No worries!
I’ve been eyeing the SPY options that expire this week, thinking to enter a straddle tomorrow before the Brexit vote is announced. These options have not only NOT experienced theta decay, but they have actually become about 25% MORE expensive as the day wore on! Guess a few others have had the same thought!
Quite amazing. At market’s highest and lowest points this morning some puts and calls I owned had hardly budged! Of course we should not be too surprised considering what VIX did today.
nice 10 point rip to the upside just 2 hours after market closed.
I wish the banksters the best of luck. They have a few bearish items to contend with.
1. Another long upper wick in all the indices today.
2. Bearish engulfing candles in several.
3. VIX closing near the day’s high; long lower wicks the last three days.
4. Transports already filled last Friday’s closing gap.
Of course they are going to pump overnight futures; that’s what they do, and we ought to thank them! 🙂
POPed on the latest & last BREXIT poll of 3000 voters… 51% stay – 49% go
So that is the stay rally. BFD
yes Verne, but geeeesss, 10+ points in 15 minutes? Really? No volume, yada, yada, yada. Seriously, is there point of diminishing returns? Even if the money is practically free, isn’t there a point their balance sheets are going to trigger reserve issues?
Well Gary, that’s why it’s called the “confidence game”. The approach of the banksters these past few years has always been to “shock and awe”. Remember the old mantra “Don’t Fight the Fed!”? This is the mind-set that 10+ points in 15 minutes is supposed to evoke. What is really funny is that lately it has not been having quite the same effect. The market clearly is not seeing selling pressure; perhaps due to a lingering caution over how repeatedly the bears have been ambushed these past many months now. It continues to “trade heavy” and drift lower on its own torpidity. I cannot even remember the last time we had a massive ramp up of futures that they were able to make stick; as you recall the last one was faded.
I sense a sea change in the air. Perhaps the on-lookers are starting to decide that “The Emperor has no clothes!”
Tomorrow should be most interesting!
ps The reserve question is a profound one. I have a few ideas but not enough time to explore… 🙂
Thanks Verne. I get it.
thats if they are even tracking the amount of paper they are printing. I don’t even know if they are printing it anywhere. They probably just whipped it up digitally transfer the funds into the New York Federal Reserve Banks account and have some Joe buy $10’s of billions of equity futures in the name of National Security.
There was someone …..BIG, buying all those contracts the last hour. So much, that I posted something. So much buying….that I almost went long at the close, went as far as loaded a 1/2 position into my exectution bar…but held off because I don’t want to gamble with the vote tomorrow. Kind of wish I would have hit the send button now….judging by the current futures price.
Close at 2076.75 and then open up at 2086.38 without a single contract tells you all we need to know. Crony Capitlism is in full effect. Free markets are dead.
What is going to blow up the system is the algos. The only thing they can do to stop a geometric ramp of directional trading in an accelerating trend by these machines is to trigger circuit breakers. The first time they talk about some “glitch” in trading on one of the exchanges in the coming months, that will by your first shot across the bow to get your funds to a safe location and leave in your brokerage accounts only as much as you can afford and/or are willing to loose!
I think more than likely this for tomorrow…..
Perfect Projection.
I think we have another five down on the five minute chart.
Overall the wave count won’t change today. Another day of watching paint dry.
Holy Smokes! If short term VIX means anything this market is in for whole heap of pain…trade carefully folks…
UVXY suggesting a bounce atm???
I’m seeing that also in RSI – yet price still looks heavy.
Olga,
I am seeing the same and expect the same into early next week. That works perfectly for trapping the remaining bulls into the long side before drop into july starts. Expecting ATH between July1 -5.
My time horizon is much shorter than that atm. My expectations do not stretch further than hours until we take out either the upper or lower confirmation points (as shown on Lara’s charts).
ATM?
At The Moment…
thank you !
Yes, that’s very bullish.
I’m thinking maybe minor 2 isn’t over, maybe it will move higher as a double zigzag.
Looks like a slight truncation for five down…
Have a great evening all! ‘Bye!
26 minutes before close is like a life-time in a skittish market… 🙂
Either a fifth or third wave down to wrap things up today; which should be shortly apparent… 🙂
UVXY above 13 hints at more bearish potential…
VIX not retreating either…
Just sold 50% of my UVXY position @ 13.20 – scaling into cash the closer we goto 2079 – will re-buy the full position just below it (or scale back in if looks like we will dip under then bounce).
Might be tempted to buy back in earlier if I see an obvious 3 wave scalp.
Current move up might be (c) of a flat but it’s getting very long in the tooth imho
2085 S&P has been a big number for weeks…
Yes it has. If that was minute wave 1 down, maybe it finds support here and we get minute wave 2 up, within minor wave 3 down of intermediate wave 1 down.
If we get a new low today… otherwise this could be sub-minuette w(b) down as indicated in truncated idea below
Looking like we are setting up for some fireworks into the close…
Currently mostly in cash…
Me too. I get a feeling that someone like PPT has been buying this market. The moves to the downside are met with heavy buying…constantly. With the economy where it is, you are telling me that PM’s are buying this market at 2090. Sheez…no way.
Spending like drunken sailors. Sadly it is a fool’s errand, but what do they care? It’s not their cash they are so frivolously burning….
Taking a few more profitable short trades off the table…
Vern,
I am a bit concerned with the hesitation of the bears to push the markets down even when we have an event such as Brexit/Bremain. Something is not aligning well with what you would expect in a normal market. Oh well, that is why trades have to be nimble and quick in this market.
The slow, shallow development of the waves is right in keeping with a trend that is being vigorously opposed by market interventionists. They can prolong the trend’s development but they cannot prevent it. Eventually their efforts are going to be dwarfed by the run-away train of market sentiment and the downward momentum will begin to accelerate. The longer they stall, the steeper the ultimate slide.
Looks like that fourth wave count was right on! 🙂
I don’t care what the Brits decide; if we go past UVXY 13.92 today stop cavorting around in your birth-day suits and get some shorts on will ya?! 🙂 (not that I mind birth-day suits mind you!)
I’d wear mine if I could get the wrinkles out it…
Possible that minute w(ii) was truncated by about .20 cents. I really don’t like truncated counts but must see it possible.
I like it! 🙂
Wave c = a @ 2094.61
If UVXY blows past 13 before SPX makes a new daily low that’s all she wrote….
O.K. folks; we are about to get some clarification as to where exactly we are in the wave count…
Agreed!
If this is a fifth wave down as per Gary’s chart, UVXY should remain under 13 with a lower high prior to a second wave up…
Looks like an impulse down complete on 15 minute chart…corrections should continue to be weak if this is what we think it is…
Vern,
I am expecting the banksters to park the S&P just below 2,100 (minor moves away will excite folks but net result will be negligible change) and on a ‘Bremain’ vote outcome, there will be a ripping rally to take us to another ATH.
It should be interesting. We should get some kind of second wave up into the close today for the main count so that would be in keeping with your idea. Question is what happens come tomorrow…
I counted 7 waves off the high on a 5 minute chart….hmmmm?
Yep – if we don’t get another lower low before hitting 2096.78 my shorts could be in (short term) trouble.
UVXY is on my side atm.
I’m sure you saw it, but just an FYI in any event…sell off today broke the trend line connecting the lows starting from the 6/16 low. Testing it from underneath at the moment. Break down here and I’ll rejoin the short side for a day trade.
May be working on minuette w(1) down. Main count still valid
Cashing in some of my bullish UVXY spreads on this nice pop and waiting for additional downside confirmation to re-load…next, 2079.62…OR, UVXY 13.92…
Quite a tone change in the markets after todays high.
Any opinions how that might be reflected in the EW count?
end of P-2 for alt?
Would somebody please hand me a wooden stake and hold down these thrashing banksters for just a minute??!! 🙂
Oh…and don’t forget the mallet…!
Farewell and adeiu…
To you Spanish Ladies… 🙂
RFLOL! You CRACK me up Verne!!!
“dont forget the mallet”….OMG! STILL laughing!
Anything to elicit a smile or two… 🙂
VIX up 1.08 to 19.56….
Hourly SPX chart looking good so far.
VIX now up 1.76 to 20.24….
Expanded flat C wave probably underway…
Maybe a ZZ…
Look at the banksters thrashing around like worms on a hook. The bears are on the prowl…. 🙂
This morning’s gap slammed shut…let’s see if they can keep it that way…most interesting…
Now up to about 2095.87 followed by the “electric slide”… or I am taking my marbles and going home… 🙂
Now a sharp c up?
Banksters defending 2090. The bears need to blow ’em out…
Giving bears the benefit of the doubt and assuming impulse one down…
I am wondering if the current price action is designed to keep retail short positions in the market into the event. It will be typical for retail investors to pick short position cause they tend to look things in smaller context devoid of influences. I guess we shall find out over the coming days.
You will have an answer today before the close. Keep an eye on UVXY as it is telling us what the heavy hitters expect thirty days or more out. The key price point remains 13.92. It it reaches that at any point today it does not matter what the Brexit vote is. If not, I think anything could happen and I will be going into tomorrowm mainly on the sidelines…
This wave down is going to be bought by the banksters, the bears need to take out 2088.90 if they are initiating a continuing impulse down, and they need to do it convincingly…
VIX leading UVXY on a reversal…very noteworthy people! 🙂
Vern,
Likely false trend change to trap more folks ahead of the event.
Possible; in most cases when both VIX and the market are printing green it’s time to get out of Tombstone, or was that Dodge?! 🙂
Sustainable trend changes also typically led by VIX so far as a volatility indicator is concerned.
You are however quite right in that old signals no longer necessarily mean the same thing in the current market environment…
“….the round number pivot of 2,100 and the black trend lines would be expected to provide strong resistance. This favors the main hourly wave count over this alternate which must overcome some of that resistance before returning downwards.”
Looks like Lara is nailing it!
Yes… Lara nailed it… look at that 11:30AM 10 min candle. Hope it continues and that is the main hourly bear as it has NOT been eliminated.
+ it’s at a key time of day… I like sell offs that start between 11:30AM -11:50AM… that is always a signal in my imo.
But it also has to accelerate down afterward for several 10 min candles to confirm with no material bounce to be a valid signal for me. So we will know over the next hourish
This 12:20PM 10min candle… looks to me like confirmation of my comments above. I think the trend has turned down.
2079.82 will be ultimate confirmation of trend change then 2025.
Failure to even penetrate the bear phalanx at 2100 as it did on Monday quite revealing….we know the banksters are really pumping today…I suspect they are not quite done yet and will give it the old college try one more time after that impulse down on the one minute chart; should hold below 2099.71 with a very strong downward mini third….
Looks like Lara’s alternate count, or Peter’s count from yesterday in play…
It seems like this will be the classic buy the rumor, sell the news scenario…
Currently, the main count could still be valid too I believe. Only until we take out Monday’s high. Which currently looks very likely.
Yes, that is true…
ALBERT EDWARDS: The Brexit hoopla has diverged our attention from the real problem – Read at Business Insider: http://www.businessinsider.com/albert-edwards-says-brexit-diverged-our-attention-from-renminbi-revaluation-2016-6?&platform=bi-androidapp
Touche!
I had been contemplating that exact thing…much ado about nada…
The cash dumps into market continues with very strange gaps, under the circumstances, evident; I am starting to get a very bad feeling about all this…
In case you are wondering who has the advantage see below
The British government allows large hedge funds to conduct their own exit polling. They are not allowed to release their findings until 22:00 British Summer Time (BST) — there is no prohibition against their trading based on their own Brexit exit polling. Properly sampled Brexit exit polling in UK voting is extremely accurate (usually within a +/- 1% error). Hedge funds will have a good indication on the Brexit vote by midday BST and will almost certainly have solid data by 18:00 BST.
It is starting to look like Ari is right about the likely price action following the vote. This upward movement today simply has to be a bankster pump. Just think about it.
What intelligent retail investor in his right mind would be going long the market at this juncture?!
Holding onto my upside short-term hedge until the close….up 15% so far…UVXY continues to stick ’em the horn…
🙂
Brexit bookie odds skewed by a few large bets:
“In other words, a few large bettors are skewing the bookie odds dramatically in the favor of Remain, even as the mass of bettors is betting on Leave, albeit with smaller cash amounts. Another way of putting it: a substantially outsized influence by a wealthy minority over the poor majority, just like in every other aspect of life.”
http://www.zerohedge.com/news/2016-06-22/something-strange-emerges-when-looking-behind-brexit-bookie-odds?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
I would think that this shows more actual votes to leave… No???
One person… One Vote! It doesn’t matter how big that person is or how much is placed on the bet.
Correct. Interesting yes?
Yes… But the question remains, is that a representative sample of who will actually take the time to go out and vote.
Anyone know if a registration process is in place and has the opportunity to register ended?
How is the voting done .electronically via voting machines? How difficult will it be to manipulate the voting machines to the outcome desired by the powers…:)
Not difficult at all, and it is a foregone conclusion that they will try to corrupt the vote; votes to leave must be in the overwhelming majority to forestall that outcome imho…
Yes registration required and ended at least a week ago (I think maybe a couple weeks ago)
Thanks… so the players are set. That has to be a sample of registered voters who will actually take the time to go out and vote.
If your going to place a bet on the outcome… I would think that you would want to participate and be registered to participate before placing the bet.
But still… is this enough of a sample to be representative of the population of registered voters?
I don’t have much faith in any of the spin. When you look at the amounts being spent on the campaign, placing a few £50K bets to make it look like odds are in your favour is a drop in the ocean.
Unfortunately I also don’t have much faith that the people will vote for what is best long term for the UK.
The only saving grace if they vote to go down with the sinking ship is that Cameron will not be able to blame the upcoming financial storm and every other mess they have made on the fact that UK left EU – his get out of jail card goes up in flames. A small consolation but the only one I’ll have as I watch the country I was born in slowly self destruct.
Someone here made a very good point – maybe the stay voters will be too lazy to go vote – they are certainly too lazy to look beyond the spin (imho).
I don’t see why anyone would want to live by rules setup & enforced by an un-elected bureaucracy based in another country that has zero accountability to the citizens of the UK.
I can’t put my head around that.
If a few large bettors are skewing the odds with remain bets, that actually means the risk/reward ratio for those taking the opposite side of that bet DECREASES, substantially…
Wow! That is truly insightful. One cannot help but wonder whether that kind of betting by a few players is part of a sophisticated psy ops operation. I have heard others comment on that scenario and I have to say your post has me rethinking how to assess that info….
The fact that the vote is now still too close to call even after that false flag murder of the MP suggests to me that sentiment is overwhelmingly in favor of leaving the EU; it is the only sensible position in my view. I can understand the panic of the EU overlords and their imbecilic resort to threatening UK citizens. How any self-respecting UK voter can choose to remain under the purview of these cretins is beyond me. Despite their threats to make an example of the UK of they leave, as they did to Greece, the cold hard reality is that if the UK leaves, the runaway gravy train obtained via the largesse of EU client serfs will come to a screeching halt if the UK departs….and they know it!
It’s very interesting that the very valid points you raise I only hear from people living outside the UK – people living inside the UK have much more selfish short term reasons for voting in or out as I outlined yesterday (I get UK TV in IoM so have been watching the debates etc).
Not seeing the wood for the trees comes to mind.
I heard someone yesterday stating that they would vote to remain in as voting out *might* mean Boris Johnson being PM. With that level of short sightedness, I can see why many elites view the masses as unworthy of democracy.
Too long in the matrix…! 🙁
Subsequent SPX price action…
A very savvy trader I know, Jeff Clark, has interpreted the recent VIX penetration of the upper BB as bullish for equities. He made a good case for the number of times this has happened in the past and the subsequent market move and he is absolutely right about he historical trading action in the short term. Something nonetheless seems a bit different about this recent move, not the least of which is the action in UVXY…in all fairness, he did point out the buy signal was effective for at least a few days, with the picture become more mixed a few weeks out…relevant charts in this post and next…
I have to concur fellows. I will be going into the close extremely light today and short term holding only that EUFN straddle. These kinds of situations generally see strong moves going into the event, often followed by sharp reversals afterwards in a buy the rumor, sell the news scenario. I am a bit cautious since we have not really seen that, especially since the wave count is expecting downwards movement now or soon. More meandering today suggests to me SOH time,…big time! 🙂
Locked profits now SOH
I expect the bankster pump to continue into the close….will cash out then….
My guess is today is going to be an up day folks, and its time to be careful if pressing shorts.
That’s what I’ll be trading anyhoo. Will see if that was the right tact later today.
Still looking short later in the week (maybe Thurs night/Fri am post Brexit result) but price looks like it has some unfinished business to the upside imhumbleo
GLTA
Stuart,
I agree with you especially if the market trend higher into the vote. I highly doubt if the vote will be for ‘exit’ but we will see in 48 hours where we stand. The move higher from current levels will be the head fake before the drop.
I agree. Too many variables and I currently don’t want to hold anything long or short going to this vote.
http://www.bloomberg.com/graphics/2016-brexit-watch/
Just got a notice from a broker I use (Gain Capital) that they are temporarily raising margin requirements because of Brexit.
Also on Zero Hedge
“UBS Warns Its Clients They May Not Be Able To Trade At All After Brexit”
http://www.zerohedge.com/news/2016-06-21/ubs-warns-its-clients-they-may-not-be-able-trade-all-after-brexit
Seems like the banks and brokers are getting a little bit worried… 🙂
I am filth 🙂
Futures tonight, and market action earlier today suggest we’ll be shmoozing until the Brexit vote results are in Friday morning breakfast time…
I will be having some earl grey for the occasion, with my pinky lifted of course…
There’s a whole lotta turding and forting going on ’round here! 🙂
Turd, if I pronounced it right 🙂
yes you are,,, I am fort
Hello Vern 🙂
Hi!