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Tuesday, June 20, 2017

Tuesday, 6/20/17 update

Could be a top of IT significance in place as of yesterdays ATH in the ES/SPX.  If the below EW count is correct we're in a 4th wave correction of a bull trend that started in Feb 2016.  A possible target low is in the ES 2315 - 2320 area.  As usual keep in mind that there are alternate counts here.



 NOTE: dotted lines show potential EW structures and are not necessarily accurate price/time forecasts

Saturday, June 17, 2017

Saturday, 6/17/17 update

I find that trending markets are easier to analyze from an EW standpoint than cycling (sideways) markets.  They're also easier to trade.  Unfortunately, markets spend more of their time cycling than trending.  Such has been the case in the ES/SPX since the first of the month.
Right now the price action since Jun 2nd has been a sideways trading range affair which has generated an ambiguous EW pattern.  The market laid down a flat type corrective sequence from the beginning of the month into the tech selloff low of Friday, Jun 9.  Normal expectation would be for a clear 5 wave impulse rally off the Jun 9 low, but that's not what we saw last week.  Examining the chart it looks like two main possibilities are apparent at this juncture: either the Jun 2nd high was a Minute W3 top of a bull sequence that commenced on Apr 19 with Minute W4 of that sequence a triangle that ended on Friday, OR the Jun 2nd high was wave 1 of that Minute W3 with the low of Jun 9 marking the end of wave 2 - and the pattern this last week would be a series of nested waves 1 & 2 of an extended 3rd wave of Minute W3:


The above count is based on the idea that Minor W3 of the bull market that started on election day 2016 was complete at the Mar 1st highs and that Minor W5 is now in progress.  The alternate count is that Minor W3 is still in progress.  The alternate carries a lower probability IMHO, but if in fact it is what's in play then Minor W3 could well have topped on Jun 2nd and we may be in for more corrective activity.

 NOTE: dotted lines show potential EW structures and are not necessarily accurate price/time forecasts

Saturday, June 10, 2017

Saturday, 6/10/17 update

So when are the wheels going to fall off this market?  Maybe now.  The tech sector certainly took a hit on Friday, things are possibly unraveling.  But never count out the BTFD crowd.

There is still a question in this analyst's mind as to whether Minor W3 which started at the election day lows was complete at the Mar 1st high or continued to develop from there.  So there are still two alternates to be considered.
Alternate #1 below has Minor W3 continuing in progress since March with the top of an impulsive pattern registered on Jun 2nd.  In the week since then the ES/SPX has laid down a flat style correction.  The Jun 2nd high could finally mark the top of Minor W3 or it could be just the top of the 1st leg of Minute W5 of Minor W3.  If the collapse in the tech market on Friday is in fact the beginning of a bear trend then Minor W3 may very well have topped on Jun 2nd.

Alternate #1

Alternate #2 has Minor W3 topping on Mar 1 with Minor W4 forming a triangle into it's conclusion on Apr 19.  Minor W5 has been unfolding since then but has a distance yet to travel.

Alternate #2

NOTE: dotted lines show potential EW structures and are not necessarily accurate price/time forecasts

Sunday, May 28, 2017

Sunday, 5/28/17 update

Short form holiday weekend update:

Alternate #1

Alternate #2
NOTE: dotted lines show potential EW structures and are not necessarily accurate price/time forecasts

Saturday, May 20, 2017

Saturday, 5/20/17 update

On Tuesday this week the ES/SPX appeared to roll over into the meltdown that has been anticipated in recent posts with a strong and impulsive selloff that bottomed on Thursday.  However, the BTFD crowd stepped in early Thursday morning and generated an equally strong and impulsive round of buying.  Typical.  Markets always have a way of sowing doubt.
The late week rally to this point is only three waves, and my short term momentum indicators reached "overbought" conditions late Friday.  So the pre-conditions for a resumption of the sell off are in place.  But the problem with momentum indicators is that the market can and does keep right on chugging regardless of what those indicators are suggesting.  If they are accurate then a resumption of the selling should occur early next week and that will validate the short term counts.  If not and the rally continues to new all time highs then those short term counts will have to be reworked.
However, from an Intermediate Term standpoint the action since the March 1st highs still looks very much like a market top under construction.  So barring a sustained rally to new highs significantly above those recently attained the longer term view remains bearish.

The IT Elliott counts remain as have been presented in recent weeks, with two possibilities still open:



NOTE: dotted lines show potential EW structures and are not necessarily accurate price/time forecasts

Sunday, May 14, 2017

Sunday, 5/14/17 update

The ES/SPX hasn't given us a whole lot of new information in the last couple of weeks.  From an Elliott Wave perspective the pattern has been difficult to decipher, lot's of choppy and range bound action.  However there are two related observations that can be made at this juncture:
1) The seasonal tendency in recent years has been for bear market conditions over the summer ("sell in May and go away");
2) Equity indexes tend to build rounded tops, and that's what the last couple of months look like.

The two possibilities of recent note are still on the table.  The 1st alternate in the chart below has a Minor W3 top as of March 1st with the a flat type W4 correction in progress since then, and in that flat waves "a" and "b" are done and wave "c" is just starting - this would indicate a sustained bear market in the coming weeks.


The 2nd alternate has Minor W3 still in progress but very close to topping.  This would allow for one more stab up past ES 2400, possibly topping around ES 2412, before rolling over into a sustained bear trend.


Either way it appears that a summer bear market is in the offing.

NOTE: dotted lines show potential EW structures and are not necessarily accurate price/time forecasts

Sunday, April 30, 2017

Sunday, 4/30/17 update

We're back to where we were several weeks ago in the ES/SPX with two possibilities apparent.  Those are that Minor W3 off the election day low ended at the Mar 1st high as in the 1st chart below or that Minor W3 is still in progress with Minute W5 of that move underway as in the 2nd chart below.  Under the 1st option the market should turn south in the area of the Mar 1st high (2401 in the ES), under the 2nd the market should blow past those highs.



NOTE: dotted lines show potential EW structures and are not necessarily accurate price/time forecasts