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Sunday, June 25, 2017

Sunday, 6/25/17 update

Equity markets tend to build rounded tops rather than spike into them, so calling a top can be risky.  But it sure looks like a top of at least intermediate term significance was made at last Monday's high in the ES/SPX.  If this analysis is correct, we saw the top of the 3rd wave (Intermediate W3 to be precise) of the bull move which started at the February, 2016 lows.  The daily chart below outlines that count:

If we are in fact in Intermediate W4 we should see a down move to the ES 2320-2315 area which was the area of the low of Minor W4 of Inter W3.

Hourly chart:

The price action since last Monday's high has served to corroborate the idea that we've transitioned to a bear market.  Since that high there's been a clear 5 wave impulse down into a short term oversold condition on Wednesday, with a corrective looking series of overlapping 3 wave patterns since - as opposed to a sharp upward impulse that is normally seen at the low of a short term corrective pattern.  So odds are good of at least another down impulse in the near future, and if the above counts are correct probably a lot more.

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

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