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Saturday, September 24, 2016

Saturday, 9/24/16 update

Current preferred count for the ES:

Sunday, September 11, 2016

Sunday, 9/11/16 update

Awfully heavy hit on equities on Friday - down 53+ on the SPX, NYSE declines over advances by 17 to 1 and down volume over up volume by 27 to 1!  Very strong.

Last update proposed a 4th wave expanding diagonal in progress with a quick 5th wave yet to come.  Obviously that's not happening.  Looking at the pattern of recent weeks there are all sorts of possible counts.  One of those possibilities is that the 5th wave anticipated in the alternate referenced in the last post has in fact occurred.  Reworked count using that idea is as follows:

Hourly bars

Daily bars

If this count is the one that is in play then the ES is in Primary W IV which should be a significant decline - several months and several hundred points.  A prior 4th wave of lower degree is the usual target for a 4th wave, in this case Major W4 bottomed around ES 1800, so that would be where Primary W IV may be headed.

The main alternate here would be that the top that was established in August was Minor W1 of Inter W3 of Major W5 as below:

In this case the ES is in a 2nd wave which should bottom relatively soon with far less damage than the 1st alternate proposed earlier.  A continuation of the bull market in the form of Minor W3 should ensue.  This count is invalidated with a drop below the starting point of the proposed Minor W1 at ES 1981.50.

Monday, September 5, 2016

Monday, 9/5/16 update

The "c" wave ED proposed last Thursday got blown up with Friday's rally.  The sideways track of recent weeks is beginning to look like an expanding triangle.  Triangle corrections are only found in 4th waves of 5 wave impulse sequences, and that brings an alternate count into view, which is that the ES completed Intermediate W3 of Major W5 at the mid-August high:

Since Inter W1 is longer than Inter W3 in this count, the Inter W5 that will commence at the conclusion of the Inter W4 triangle has to be shorter than Inter W3 to comply with EW rules.  So a relatively short burst for Inter W5 is likely.  Currently two possible targets for the Inter W5 top are at ES 2228 and 2261, but these targets are very tentative.  If this count is correct, that Inter W5 top will also be the top for Major W5 and in turn Primary W III, so there should be a significant bear market following that event.

Short term count for this alternate looks like this:

The count that has been preferred at this site is still possible and thus in play.  That count has the mid-August top labeled as Minor W1 of Inter W3 with Minor W2 in progress.  If that count is in fact the correct one then the significant top anticipated by the alternate outlined above gets pushed a lot farther down the road.

Thursday, September 1, 2016

Thursday, 9/1/16 update

Still looks like a flat correction in progress from the Aug 15 high in the ES, with the "c" and final leg forming an ending diagonal:

If the move lower from the "b" wave high isn't an ED then it's a whole bunch of nested waves 1 & 2 - that doesn't seem too likely.

Tuesday, August 23, 2016

Tuesday, 8/23/16 update

Looks like a flat correction in progress over the last week and a half.

Sunday, August 14, 2016

Sunday, 8/14/16 update

From a long term perspective the equities markets continue to show divergences of the blue chips as measured by the S&P 500 as compared to the broader market, represented in the below charts by the NYSE (NYA) and the Russell 2000 (RUT):

My current long term count has the ES/SPX working out at least one 4th/5th wave sequence of the bull market that commenced at the MAR 2009 lows.  A narrowing of relative strength in equities to favor blue chips vs other issues is a characteristic of 5th waves, so the long term perspective is confirmed by the above charts.  The obvious message is that a bear market of some significance is getting closer.

On the short term, crude oil looks to have established a low at almost exactly a 50% retrace of the early February to early June rally:

This could provide some lift to the ES/SPX.

Current EW counts for the ES can be found here.

Sunday, August 7, 2016

Sunday, 8/7/16 update

ES/SPX finally woke up from it's mid-summer slumber this last week.  The EW count has not changed significantly after the last two weeks of sideways churn.  Alternate counts are essentially the same as those proposed two weeks ago: