1 P a g e. Summary. Aloha, Dr. Arnout, aka Soul, ter Schure

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1 Summary Two weeks ago I was already looking for Ideal lows are in the S&P , NASDAQ $ and RUT $ zones., and last week I determined that Although the ideal c=a target for the S&P500 resides at SPX2587, there are now enough waves in place to count the downside complete, but one more stab lower can t be ruled out entirely yet. An ending diagonal pattern is now developing, which when complete targets SPX2820 to the upside. This week we got that one more stab lower to SPX2600, NAS6922, and RUT1461. That s 0-2% variance between my forecast and actual price levels reached... Please pardon my inaccuracy Now that wave-a, has been confirmed, wave-b is now underway and its target zone can be fine-tuned to ideally SPX2840 +/- 10p (NAS7750 +/- 50p) with the 62% retrace at SPX2820 and NAS7655. Short term I expect a minor-b low to around SPX2685+/-5p before minor-c rallies price to the aforementioned target zone to complete wave-b, from which the SPX can than drop to This will then complete either Primary-IV or only wave-a of a much larger Bear market. But let s not try to look around too many corners at once and focus on the developing b-wave bounce first as in the long run we are all dead any way (John Maynard Keynes) Aloha, Dr. Arnout, aka Soul, ter Schure Ps: please look at my hedge fund s and private twitter feed s performance on page If you or your portfolio don t have the same performance, contact me. Because I want all my members to make money and YES my hedge fund can also trade your 401K/IRA for you. 1 P a g e

2 Elliot Wave Updates Last week I concluded Both the NASDAQ and S&P500 have enough waves in place to count the downside complete, albeit one stab lower to the ideal c=a targte of SPX2587 can t be excluded. That would then be wave-c of -c of -c of -a. We got SPX2600 and now intermediate-b (or major-b) is underway. Things are tracking along nicely and minute wavea of minor-b has completed with minute-b still underway or also completed. Note the nice 38.2% retrace tag on Friday and bounce off it; typical for an a-wave. Price can still move a little higher to SPX before minute-c takes hold -grey arrows- and brings price to ideal SPX2685 +/- 5p (NAS7200 +/- 10p) to complete minor-b, from where we should see a nice minor wave-c rally -green arrows- to ideally around SPX2840 +/- 10p (NAS7750 +/- 50p) to complete intermediate-b / major-b. Figure 1. A) NAS 1 min chart. Minor-b underway to ideally /- 10p. B) SPX 5-min chart. Minor-b underway to ideally SPX /- 5p. A Copyright Intelligent Investing, LLC. May not be copied and/or distributed without permission. B 2 P a g e

3 In case you wondered why I mentioned intermediate-b and major-b it is because the September high was either Primary V or III. In the former case (P-V) the Bull since 2009 has topped and a multi-year Bear is just getting started. There is a lot going for this, as I ve shared with you over the last few weeks. The latter case (P-III) means we ll see a P- IV low in early 2019 and then one more rally to SPX3000+ to complete the Bull since Either way, once wave-c/c has completed a good long opportunity will arise for either a multi-month bounce or multi-month rally. Conversely a good short/inverse ETF/put buying opportunity arises once wave-b/b has completed. Figure 2. SPX daily charts. Main/preferred bigger picture Elliot Wave Count: b-wave bounce underway, to be followed by a substantial c-wave drop to mid to low SPX2000s A You notice that my updates are almost always devoted of the why? What will cause this c-wave drop? And what will cause this b-wave rally? Nobody knows, and I honestly don t care, because the why is not important. We don t trade why s we trade price. All answers and all your money is made in price. How will the market react to the mid-term election results in his coming week? According to the current short to intermediate-term EWT we should see a rally materialize. That s all that matters. Trade accordingly. Don t worry about what you can t control (election outcomes), worry about what you can control (losses and profits, set stops- and limit orders accordingly). We ll let the media come up with the stories in trying to explain the why. But remember the media is mostly wrong and trying to trade according to what the media has to say is very detrimental to one s portfolio. Cut out the news, focus on price. 3 P a g e

4 The NASDAQ looks also better with one more wave down (wave-b) and one more wave up (wave-c) to complete waveb; especially since it has not reached the ideal B-wave bounce target zone yet ( ). In addition, we need to see nice Bullish sentiment readings again before the rug is pulled out from under. Figure 3. NAS daily chart. B-wave bounce underway. Minimum targets not yet reached. Nice support overlap 4 P a g e

5 The DOW did reach its minimum bounce target but since wave-4 of wave-a on the DOW was at least 3 days, the current one-degree higher bounce/counter trend rally can be expected to last longer than the current 3-4 days we ve had so far. This need to become more complex and more Bullish. Figure 4. DOW daily chart. B-wave bounce underway. Minimum target (50% retrace) reached, but timing-wise the bounce of this degree is still too short. 5 P a g e

6 Chart Patterns Updates Last week I found It appears an ending diagonal pattern is forming. A close above the upper red trendline is needed to confirm this pattern has completed and price can then move back to its origin: SPX2820. Support is at SPX followed by SPX Other than the divergence there are 0 buy signal on the chart. The ED completed, and price is now working on its counter trend rally to at least SPX2820, which would fit with a ~62% retrace of the SPX2940- >2603 move. Resistance levels -including SMAs- are shown with the red arrows. All TIs are pointing back up and on a buy; wanting to see higher prices. Figure 5. S&P500 daily chart. Counter trend rally to ~SPX2820 underway, TIs back up and on Buy. Multiple resistance levels (red arrows). 6 P a g e

7 The weekly chart remains on a sell, and price has now closed for its 2 nd consecutive week below its 50w SMA. The last time it did that was December Clearly the uptrend off the 2016 lows is over and a more substantial correction is underway. Note how price got more oversold per the weekly RSI5 than during the 2015 correction; telling us this current correction is technically more severe albeit price had so far only dropped 11% at the SPX2603 low, which is the same percentage as the February correction. This is also illustrated with the long term simple moving averages chart on page 9. Resistance is now at prior support, from which the next larger decline should start. Figure 6. S&P500 weekly chart. Symmetry target (blue arrows) reached at SPX2600 support (purple arrows); resistance at SPX2750 (50w SMA) and prior trendline support (SPX2850). 7 P a g e

8 Market breadth and Sentiment The SPXMO (McClellan Oscillator -MO- for the S&P500) ended the week at +20, up 93p compared to last week, and all indices MOs ended the week positive. See table 1. A first since late-september, thus signaling the larger bounce is underway. All indices Summation Indices (SIs, cumulative MOs) remain, however, on a sell, but are starting to point back up (Fig 7). The double positive divergence on the indices MOs arrived last week, and price has confirmed the decreasing downside participation at the final stages of the first wave down, with the anticipated larger bounce on positive breadth now materializing. Note the stark differences in how oversold the SPXSI (and all other SIs for that matter, some of which shown in the daily market updates) were now vs the February and April lows. This also tells us that internally things are a lot worse then back then. Figure 7. SPXSI: still on a sell, as are all other SIs, but starting to point back up. Expecting a buy signal before next leg lower. Sentiment is getting very bearish. AAII Sentiment (what I perceive as an intermediate-term indicator) saw Bullishness increase 10% to 37.9% over the past week, while pessimism decreased 6.5% to 34.5%. These are more normal readings, and consistent with a bounce. The Fear & Greed Index ended at 8 last week, up 1p compared to last week (on a scale from 0 to 100: extreme). Since the FGI is based on technical data, it is correct in that many charts are still very bearish. We can assess shorter-term Bullishness and Bearishness by checking the put/call ratios. Last week the CPCE (equity put/call ratio) ended at 0.66 neutral, but quite the jump from Thursday s 0.52 reading. 8 P a g e

9 Simple Moving Averages Charts The Simple Moving Averages (SMAs) can be used for trend-following, and both the short-term chart and the long-term chart continued their deteriorating from last week into this week. The ST chart is now 85% Bearish, while the LT chart dropped to 70% (75% last week). Note the difference in the LT-SMAs now vs earlier this year; telling us the LT trend is much weaker now and more easily turned into a LT down trend. Thus both charts confirm the bleak longer-term outlook for the markets, even if we get a brief relief rally, which supports the preferred view that we ll eventually see much lower prices. Figure 8 A) Short term Simple Moving Averages: 85% Bearish. B) Long Term Simple Moving Averages: 77% Bullish. A Copyright Intelligent Investing, LLC. May not be copied and/or distributed without permission. B Copyright Intelligent Investing, LLC. May not be copied and/or distributed without permission. 9 P a g e

10 Buy/Sell signals based on Summation Indices and Mechanical System NO system is perfect, and NO system or trader has only winning trades. EVERY system gives false signals every now and then resulting in losses. But, sticking to a system over the long-run will pay off. Discipline pays. Switching between systems does not. Good systems have small losses and big gains and out-perform the indices. If you can t handle losing trades: don t trade! Table 1. Buy/Sell Signals based on Summation Indices Table 2. Buy/Sell Signals based on my Mechanical System for SPY/SH only. 10 P a g e

11 Trading Performance Update with Hedge Fund North Post Partners, LP NPP provides neither a boom, nor a bust. Just consistency. Years of combined trading experience and market expertise are truly coming to fruition during this Bear market, which we had planned for weeks in advance: plan the trade, trade the plan. This week we add another whopping ~4% to our clients accounts, beating the indices massively and most other hedge funds AGAIN! We are now pushing ~24% YTD. Our goal is to provide our clients with a ~+20% per year and again we will not disappoint them. When will you decide to join!? Please see below! NPP s performance since going public/live 2017 compared to several major indices. Insert shows YTD performance. If you want to join our winning team, please contact me or NPP s President, Rus Chao, directly (rustinchao@gmail.com) for more information. We do the hard work, i.e. trading for you, and you get to reap the rewards! *It should not be assumed that future performance will always be guaranteed and/or profitable. Nor will future performance necessarily equal past performance or past performance trends. All trading and investment decisions are the sole responsibility of NPP. Joining NPP is free, but does not exclude commission costs, and other possible charges. 11 P a g e

12 Trading Performance Private Twitter Feed: Please Join Me & Sign Up Here. In Bear Markets he/she who loses the least wins as then there s the most ammunition left for the next Bull. Remember that making money in a Bear market is extremely difficult and focus is on THE rule #1 of trading; minimize losses. If you can reduce a loss: kudos. If you can make it to break even: fantastic. If you can change it to a profit: pro-level stuff. So how does it work!? I tweet in real-time when I buy or sell and you can simply follow my lead*. It doesn t get simpler than that! Of course, you don t have to Private Twitter Feed Trading Results Since June 1* Subscriber does not have to act upon tweets and should consider them as for information purposes only. Results (% gains and losses) are calculated assuming each trade is of equal sized position. However, position sizes may differ in reality. Results are for Intelligent Investing, LCC s - the provider- trades only. Subscriber results may vary due to different time of entry as provider s trades are tweeted shortly (up to two minutes) after they ve been made. Subscriber takes full responsibility for his/her own trades and assumes no liability towards the provider regarding possible losses as provider s system is not perfect and no system can guarantee only winning trades. When you subscribe you have read and agree to I.I. s terms and conditions and have read, understand and agree to I.I. s disclaimer. 12 P a g e

13 2018, Intelligent Investing, LLC. This copyrighted weekly periodical is published on non-stock market trading weekend days by Intelligent Investing, LLC, and is intended solely for use by designated recipients. No reproduction, retransmission, or other use of the information or images is authorized. Legitimate news media may quote representative passages, in context and with full attribution, for the purpose of reporting on my opinions. Analysis is derived from data believed to be accurate, but such accuracy or completeness cannot be guaranteed. It should not be assumed that such analysis, past or future, will be profitable or will equal past performance or guarantee future performance or trends. All trading and investment decisions are the sole responsibility of the reader. Inclusion of information about managed accounts, program positions and other information is not intended as any type of recommendation, nor solicitation. For more information, contact intelligent investing at I reserve the right to refuse service to anyone for any reason. 13 P a g e