Sunday, 4/22/18 update

The bull market of 2016-17 has obviously gone bye-bye since January's peak prices.  There's an unanswered question here concerning the potential severity of the current bear market.  In the ES/SPX there are two valid long term Elliott count alternates which portend significant differences in bear market possibilities.

The difference between the two is in the analysis of the 2010 to 2011 price pattern.  The first possibility is that Primary W II in 2010 was a simple zig-zag which only lasted a few months from the Primary W I peak in late April, 2010 to an eventual low in early July, 2010.  That low marked the start of a 7 1/2 year extended Primary W III which peaked this January.  In this context we are now seeing Primary W IV unfold, and that wave should be wrapping up by the end of the year and be limited in price damage - at least as compares to the 2nd alternate described later.  And of course another bull market in the form of Primary W V should ensue.

Alternate #1

The second possibility is that Primary W II was a running flat which didn't conclude until the lows of early October, 2011.  Following that the market put in Primary Waves III, IV and V into this January's top.  This means that the January top is the culmination of a nine year bull market that started at the March, 2009 lows.  As such the current bear market could last much longer and reach far deeper than in the 1st alternate. 

Alternate #2

There is some basis for favoring the 2nd alternate in terms of the financial environment.  Up until last fall the period from March, 2009 forward was notable for the multiple Federal Reserve Quantitative Easing programs.  These programs supplied extraordinary financial liquidity to US markets and arguably fueled the bull.  Last fall the Fed began reversing that liquidity flow in an effort to unwind it's bloated balance sheet.  Thus not only is the fuel no longer being supplied, it's actually being siphoned out.  So an EW count showing a completed move starting in 2009 and ending this January ties right in. 

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

Thursday, 3/22/18 update

Haven't posted for a while, but this is a juncture worth noting.  The ES is at an important support level - if prices drop through this area in a sustained move the bottom could really fall out.

Sunday, 1/21/18 update

The rip your face off rally in the ES/SPX the first two weeks of the month has dictated a revision in the EW count from last August's lows:

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

Monday, 1/15/18 update

ES/SPX has certainly been parabolic as can be seen on the weekly chart:

It may make more sense to look at the long term picture using a chart on a log scale:

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

Saturday, 1/6/18 update

The ES/SPX is on a trajectory of which any rocket scientist would be proud. And there's no sign of running out of fuel yet.  Where the top might be is anyone's guess.

ALTERNATE

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

Happy New Year!! update 1/1/18

The pattern in the ES over the holiday weeks can be counted in two different ways.  1st possibility is that of a 4th wave triangle leading into a quick thrust of a 5th wave on Friday followed by the 1st leg of a correction:

This would portend more corrective activity over the coming days.

The 2nd possibility is that of a flat style correction with Friday's selling being the "c" - and thus last - wave of that pattern:

This would mean a quick conclusion to the selling (if it's not already done) and another ramp up almost immediately.  This alternate is the higher probability IMO.

From a longer term perspective the preferred count is showing a major top in the near future:

This count has the ES in Intermediate W5 (purple) of Major W5 (blue) of Primary W III, with Primary W III being a bull market that commenced in 2010 and Major W5 being the bull market of the last 2 years - if true, a significant juncture.

However, the parabolic rise of recent months is more typical of a 3rd wave rather than a 5th wave as labeled above.  So the thought is that the pattern from early 2016 thru mid 2017 is a series of nested 1st & 2nd waves with the run up from August thru now being the 3rd of a 3rd of a 3rd of a 3rd wave - i.e. the point of maximum acceleration:

This count has to be given serious consideration - if for no other reason than that there have been no serious signs of topping action as of yet.

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