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Saturday, November 18, 2017

Saturday, 11/18/17 update

Recent market activity has been a little difficult to read from an EW standpoint.  The short term chart on last weekend's update had the low of Thurs, 11/9 labeled as the "c" wave in an irregular flat.  That was blown up this week when further selling continued that move down and formed a 3 wave move from the top on 11/8 - so we have an a-b-c down rather than a 5 wave impulse as required in a "c" wave.  This forced a revision of the short term count.  The current view is that Minute W3 ended with an ending diagonal that topped at the ATH of 11/8 and the subsequent 3 wave move into last Wednesday's low is the "a" wave of either a flat, triangle or multiple zig-zag Minute W4.

Short term chart:


From a wider perspective it's still the case that the current count (IF correct) requires a couple of additional W4 - W5 sequences before a significant top is in place.

Intermediate term chart:


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

Saturday, November 11, 2017

Saturday, 11/11/17 update

Just a tad wobbly last week, but there needs to be a lot more bear action of that sort before considering a declaration of demise for the bull.  Current EW count has 4th & 5th wave unwinds still in progress, so a top is not yet in place IF the count is correct.

Short term chart:


Intermediate term chart:


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

Saturday, November 4, 2017

Saturday, 11/4/17 update

4th & 5th wave unwinds have been in progress, market is moving towards a top but not there yet.  The bull is still stampeding, but it does show signs of getting tired.

Short term chart:


Intermediate term chart:


In the last couple of weeks the ES/SPX has rallied while the broader market has been essentially flat.  That's a sign of an approaching top - fewer and fewer stocks are seen as having upside potential.  The divergence is obvious in the below comparison of the SPX to the NYA.  The same divergence is apparent in the RUT.

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

Saturday, October 14, 2017

Saturday, 10/14/17 update

Last week's action in the ES/SPX served to obscure more than illuminate.  It looks somewhat like an ending diagonal - upward sloping wedge kind of shape, so it could be a 5th wave as labeled in the chart.  If not then it's a "b" wave of an expanded flat.  Either way the indications are to expect a down stroke in prices in the next day or two.  If selling does materialize the other message from the current EW count is that it should be a very short lived correction.  BTFD baby. NOT TRADING ADVICE


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

Sunday, October 8, 2017

Sunday, 10/8/17 update

Time for some long term perspective.


The above long term weekly chart has been published in the update from time to time.  Although it's never been mentioned in the discussion the chart has displayed a target of ES 2569 for Primary W III for some time.  The ES is very near to that target with last week's strong ramp up.  Primary W III started at the lows of 2010.  Note that the ES is right up to the top of the channel that's defined Primary W III  since 2011.  Finally, the current count has the ES in wave 5 of 5 of Primary W III.

All this IS NOT to say that a crash is imminent.  What it does say is that a major turn is possible.  But momentum is pretty strong right now, and the ES could quite easily extend and blow through that 2569 target and the top of the long term channel.  So what's a trader to do? The trend has been up and remains so, so until there are definite signs of a change of trend the bull must be respected.  Equity markets tend to form rounded tops, so whenever that Primary W III top is established there should be time to identify it and respond appropriately.

Daily chart:


Speaking of strong momentum, the ramp up from the ST low of Sep 25 looks a lot more like a 3rd wave than a 5th wave.  Coming into last week it looked as if Minute Waves 1, 2, 3 & 4 of Minor W3 off the late August low were done and Minute W5 was in progress.  However, the rally from the Sep 25 low has been stronger and longer than the preceding rally leg.  There is therefore the possibility that Minute W3 is extending and that we are currently seeing Micro W3 of Minute W3.  Thus the labeling on the short term chart:     

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

Saturday, September 30, 2017

Saturday, 9/30/17 update

The bull keeps grinding away.  Possible top of at least intermediate degree in October.

Alternate #1

Alternate #2

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

Saturday, September 16, 2017

Saturday, 9/16/17 update

The ES closed at an even 2500.00 on Friday.  Ding!!  One more milepost on the way to ES 10000.00.  Bears are extinct, go long or be wrong!!

Obviously, the trend continues to be up.  The question as to what degree to assign to the early August correction remains open.  Was it Intermediate W4 as in alternate #1 below?  If so a major top is nearby.  Or was it a Minute W4 of an extended Minor W5 as in alternate #2?  In that case there's a lot more bull market yet to occur before that major top comes into view.  Right now alternate #2 seems more likely given the relative shallowness of that early August correction.

Alternate #1

Alternate #2 

A major top will be accompanied by some type of panic.  If alternate #1 is correct there should be a significant negative financial and/or geopolitical development that occurs in the very near future.  Some things of note in this regard are the recent moves by major world Central Banks to more restrictive postures and of course the North Korean situation.  Worth watching these.