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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

Saturday, April 22, 2017

Saturday, 4/22/17 update

The sideways grind continues in the ES/SPX but indications are that we're close to the end.  The pattern since the Mar 1st high looks very wedgy, the ST chart below reflects that in the form of a triangle.  There are other possibilities of course, but this seems the most likely IMO.  But I've been wrong before.  Sometimes this type of pattern resolves with a final steep plunge before wrapping up, so caution is warranted.


Intermediate term chart:


Saturday, April 15, 2017

Saturday, 4/15/17 update

It's now fairly certain that Minor W3 topped on Mar 1st.  With that in mind here's a current IT chart:


The ES is in a 4th wave. 4th waves are notoriously complex and frustrating.  A couple of possibilities for the structure of the move are outlined in the below ST chart, but a lot of other things could happen as well.



Sunday, April 9, 2017

Sunday, 4/9/17 update

Last week's action in the ES muddied up the short term picture somewhat.  Of the two alternates being followed in recent weeks the idea that Minor W3 off the election day low is still in progress has been the preferred count.  The alternate is that Minor W3 was complete at the Mar 1st high.  That preferred count remains the most likely, but it's probability vs. the alternate has now dropped very close to 50/50, mainly due to the amount of time the market is spending churning sideways.  We really need to see a sustained rally to new all time highs relatively soon to keep the preferred count healthy.  As far as invalidation levels, the preferred count is eliminated if the selling accelerates and the ES drops below The Minute W1 high of 2277.00 registered on Jan 6.  Unfortunately that's a distance away so it may be of no immediate help in deciphering where we're at.  This is especially so if the ES continues to churn sideways, which it could well do.  The alternate is eliminated if we rally up from here to new all time highs as mentioned earlier.

Preferred count

Alternate count

One final note, and sorry if this is getting confusing:  a case could also be made for the possibility of Intermediate W3 being complete at the Mar 1st high.  The significance of this is that a very major market top is much closer than would be anticipated in the above alternates. 


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

Saturday, April 1, 2017

Saturday, 4/1/17 update

The preferred count for the ES/SPX has the market in a Minor W3 rally that commenced on the election day lows of last November.  As of last weekend's update Minute W1, W2 and W3 were complete with Minute W4 in progress.  Minute W4 appears to have bottomed at last Monday's low, so the presumption is that Minute W5 is underway.  ST count under that scenario looks like this:

 
 Longer term perspective:


 
As indicated on the chart a 1st target level for Minute W5 and thus Minor W3 is ES 2412.00.  It needs to be noted that Elliott Wave rules are that the 3rd wave in an impulse cannot be the shortest wave.  In the current count for Minor W3 off the election day low Minute W3 is shorter than Minute W1.  Thus Minute W5 cannot be longer than Minute W3 for the count to be valid.  The invalidation price level that is indicated is ES 2470.25 if in fact Minute W4 was complete at last Monday's low.  If that level is exceeded during the anticipated rally then the most likely inference is that Minor W3 is extending (subdividing) in some fashion.

Finally it also needs to be noted that the alternate count presented last weekend is still in play.

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

Saturday, March 25, 2017

Saturday, 3/25/17 update

The selling since the 1st of the month needs to find a bottom soon or we could be looking at a higher degree correction than the current EW count indicates.  The current preferred IT view has the ES/SPX in Minute W4 of a Minor W3 rally that commenced on election day in November:

Alternate #1 - still working out Minor W3

However, it is possible to count the move off the Nov 9 low as complete at the Mar 1 high - and that would mean that the Mar 1 high is the Minor W3 top and we are in Minor W4 of an impulse that started at the lows of last June: 

Alternate #2 - Minor W3 top is in, working out Minor W4


For perspective it should be noted that Minor W2 of the move lasted 3 months and spanned a drop in the ES of roughly 160 points.

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

Saturday, March 18, 2017

Saturday, 3/18/17 update

The two short term alternate counts discussed in last weekend's update are still in play.  Short term charts for those:

Preferred count

A triangle is drawn in on the preferred count, but we could see other patterns form.

 Alternate count

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

Saturday, March 11, 2017

Saturday, 3/11/17 update

Looks like a ST low was established on Thursday in the ES/SPX.  The preferred count has the ES in Minute W4 of the election day rally.  Minute W2 in the preferred count is a simple zig-zag, so the EW rule of alternation would indicate a flat, triangle or complex zig-zag for Minute W4.  The drop from the ES 2401.00 high is a simple zig-zag, so the expectation is that the Thursday low marks wave "a" of Minute W4 with more corrective activity yet to occur before Minute W4 wraps up. 

Preferred count

If Thursday's low eventually proves to mark the entirety of Minute W4 then an alternate IT count for the rally off the election day low comes into play.  The alternate count does not imply any really significant variation from the preferred count - it primarily changes the target for the potential top of Minor W3.

Alternate Count

Saturday, March 4, 2017

Saturday, 3/4/17 update

Looks like we may have hit a wall at ES 2401 on Wednesday, but it should only be temporary.  If the current count is correct we're in Minute W4 of the election day rally that commenced Nov 9, and that is Minute W4 of Minor W3 of Intermediate W3 - so the bull should be alive and well for some time yet.  4th waves can be complex and tricky, so it's difficult to project how the correction might unfold.  Potential chart support for a Minute W4 low is in the ES 2370 area and below that in the ES 2350 area:


Intermediate term view:




Wednesday, March 1, 2017

Wednesday, 3/1/17 update

At the end of last Saturday's update it was noted that the IT count of the move up off the early November lows had the 1st wave longer than the 3rd with a 5th wave in progress.  In Elliott Wave the 3rd wave cannot be the shortest, so it was noted that if the rally kept steaming ahead and breached ES 2381.00 then the count was invalidated as that would make the assumed 3rd wave the shortest in the sequence.
Obviously we blew through that 2381 mark with today's action, so the IT count had to be revisited.  Best solution for the pattern at this point is that the rally from early November into the ST top of Jan 26th constitutes an extended Minute W1 of the move with Minute W3 currently in progress and Minute W4 & W5 yet to come.  So the bull has a distance to go yet in this analysis.



Saturday, February 25, 2017

Saturday, 2/25/17 update

After an initial surge last Monday the ES/SPX finally embarked on some corrective activity for the remainder of the week.  If the current ST count is correct then we're in Micro W4 of Minute W5.  Micro W2 was a simple zig-zag, so Micro W4 should be a flat, diagonal or some type of complex structure.  Micro W5 will follow into a more significant top.


Longer term perspective:


One thing of note on the above Intermediate Term count is that Minute W3 (green) of Minor W3 (red) is shorter than Minute W1.  EW rules dictate that the 3rd wave of an impulse cannot be the shortest wave, so if the move currently counted as Minute W5 exceeds the length of Minute W3 then the count is invalidated.  That invalidation level lies at ES 2381.00.  In that event then the move up from the Minute W2 low into the top currently labeled Minute W3 will be relabeled as Micro W1 of Minute W3 and the potential top for the whole sequence from the early November low moves up significantly.


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

Saturday, February 18, 2017

Saturday, 2/18/17 update

Last weekend's update marked the top of peak acceleration for Minute W5 at the high that Friday.  It wasn't.  Monday thru Wednesday last week saw further extension of the run with a pause in the action on Thursday & Friday.  Updated short term count looks like this:


If this count is correct then we have a 4th & 5th wave sequence yet to occur to complete Minute W5 and thus Minor W3.

Looking at the longer term count, the Major W5 bull market that commenced at the Feb, 2016 lows still has quite a distance yet to travel.  If the long term count is correct we're in Minor W3 of Intermediate W3 of that move - i.e. in the middle of the run from an EW standpoint.  Go long or be wrong!



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

Saturday, February 11, 2017

Saturday, 2/11/17 update

Of the two possibilities for the ES proposed in last weekend's update the 2nd alternate appears to be the one in play, and that is that Minute W5 is extending.  The current count has the ES at the top of the peak acceleration in Minute W5.  If accurate, there needs to be a series of 4th & 5th wave sequences before Minute W5 concludes:


Longer term view:

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

Sunday, February 5, 2017

Sunday, 2/5/17 update

There are always two questions to be answered in market analysis: what's possible and what's probable.   Currently there are two possibilities if our EW count for the ES/SPX is correct, and those are that Minute W5 of Minor W3 topped at the Jan 26 ATH or that the Jan 26 high only marked the top of Micro W1 of Minute W5.  As far as what's probable there is not a definitive favorite.   In EW waves 1 & 5 generally are similar in time duration and wave 5 relates to wave 1 by a fibonacci multiple.  Minute W1 was the initial thrust out of the election day low and lasted 2 days, the rally that led to the Jan 26 high was about 4 days, so they are similarly brief in duration.  However, the possible Minute W5 was not a fibonacci multiple of Minute W1 - in fact it didn't even achieve a .382 multiple of Minute W1 (Trump enthusiasm waning?).  Because of the quick duration of the Jan 23 - 26 rally the possibility that Minute W5 topped on Jan 26 has an edge, but only a very slight one.  


Long term count:


Tuesday, January 24, 2017

Tuesday, 1/24/17 update

As it turns out, the pattern in the ES since the Jan 6 top wasn't a pure EW triangle as suggested in last Saturday's update.  But there's no doubt it was corrective, and there's also no doubt that it's now over.  How exactly to label the correction is irrelevant at this point, so it's going to keep the triangle labeling and be counted as Minute W4.  Thus Minute W5 is in progress.  Preliminary target for Minute W5 is ES 2326, but that number is not chiseled in a stone tablet that came down from the mountain.

Hourly chart

Daily chart

I will be traveling Thursday PM through Sunday so probably no weekend updates.

Saturday, January 21, 2017

Saturday, 1/21/17 update

Looks like the ES is forming a triangle for Minute W4, and that triangle is very close to being completed.  If so, Minute W5 should rally prices to new ATH's:


Hourly chart:  
 

Daily chart:  
 

Thursday, January 12, 2017

Thursday, 1/12/17 update

Tough market to read this week.  Very much a correction in progress, very unlikely that this is the start of a sustained bearish move.  Current count has the ES in a Minute W4, the short term chart below suggests a flat type structure but it could take another form.  If this count is accurate we should resume the march upwards in a few days or so (if we haven't already).

Hourly chart:


Daily chart: