1 P a g e. Summary. For now, I am looking for a major-a low at

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1 Summary As all most all my forecasted upside (retrace) and downside (Extension) price targets have been reached over the last 3-4 weeks I then always try to be extra careful, cautious and objective in analyzing the price charts. However, there s for now nothing in any price chart for all major indices from daily- to weekly to suggest prices will move higher: All technical indicators are on sell Price continues to trade below its 20-day to 200-day Simple Moving Averages (SMAs). The short and long term SMA charts are deteriorating Breadth is still mostly negative, but starting to diverge, while still in correction mode Sentiment is negative but close to panic levels Thus, I will have to look lower until proven otherwise and I continue to expect for price to reach my preferred major-a targets from which we can then expect a 50-62% bounce (major-b) off the recent multi-month correction before the next multi-month leg lower (major-c starts). For now, I am looking for a major-a low at SPX2600 +/-5p (odds: 20%), SPX (35%), SPX (45%). DOW23,500-23,300 with $23,400 as the sweat spot NDX I expect these lows to be reached this coming week as I have an Intermediate-term Fibonacci-based turn date for November which is always +/- 2 to 3 trading days. Aloha, Dr. Arnout, aka Soul, ter Schure 1 P a g e

2 Elliot Wave Updates Short term the price action is still progressing as expect. On Wednesday I concluded we had most likely finished a flat wave-b/ii correction. Price on Friday already made a lower low, IMHO confirom this count (Fig 1A). As long as price makes lower highs and lower lows I continue to -accordingly!- look lower as well, and keep my preferred view as is. This POV is shown in Fig 1B. Now there are three lower price targets I am looking for on the S&P500 in order of least to most likley: SPX2600 +/-5p (c=a; 20%), SPX (c=a, c=1.382x a to c=1.618x a; 35%), SPX (c=a, 5=2.0x 1; 45%). We will need to see a move over SPX2671 to tell us b/ii is still ongoing, and a move over SPX2747 to tell us the whole downside move is over. But, given how bad the daily-, weekly-, SMAs-, and breadth charts look (see remainder of this weekly digest), I am barely even considering such a move until proven otherwise. Figure 1. A) SPX 1 min chart. Friday s price action tells us the high at SPX2671 still counts best as the wave-b/ii. Wave iii/c now underway. B) SPX daily chart. Three different ways for this first leg of the current correction to end: SPX2600 +/-5p (c=a; 20%), SPX (c=a, c=1.382x a to c=1.618x a; 35%), SPX (c=a, 5=2.0x 1; 45%). A B From a trading perspective I will scale out of my inverser ETFs partially at SPX2600 and then partailly SPX2550, and keep the remainder to see how low it can go. 2 P a g e

3 The DJIA used to be the leader of the markets with the least downside and highest bounce (76.4% retrace), but now its daily chart looks weak: all Technical Indicators are pointing down and all are on a sell. Price is below its 20d to 200d SMA and today the index made its lowest close in almost four months. None of this sounds like a Bull market to me. Hence, I will keep looking lower to the $23,500-23,300 support zone -with $23,400 as the sweat spot- remains the target Figure 2. INDU daily chart. Weak chart, all TIs on sell, $23,500-23,300 -with $23,400 as sweat spot- remains the target. A.I. Buy/Sell 3 P a g e

4 Last week I showed the NASDAQ daily chart and concluded price has been unable to even regain the red downtrend arrow. Even if it would, the 200d SMA still lies ahead as resistance and even a break above it using the simple c=a relationship would target ~$7700 at the most IMHO. But, with price below its falling 20d to 200d SMAs and all data at hand I find such a move higher for now a bit of a stretch. And a stretch it was as tech closed the week 3-4% lower. Thus, I continue to look lower, until proven otherwise. This week I wanted to show the NDX, which IMHO still has a target of $ It s where a possible minute c=a, minor c=a and intermediate c=a. You know from my prior work, and accuracy that when three different wave degrees all point to about the same price level, the probability of it to be reached is high. Once this price target zone is reached, I expect a multi-week three-wave bounce to the 50-62% of the move down from the $7700 ATH. This should target $ ; just around the 200d SMA. Figure 3. NDX daily chart. Tech remains a full-blown Bearish chart. Ideal target zone $ P a g e

5 Chart Patterns Updates Last week I gave three reasons that keep me bearish until proven otherwise all indices -except the DJIA- are A) trading below their 200d SMA (Fig 3, 4); B) my proprietary A.I. Buy Sell/Indicator has not even given a buy signal for the last two days rally. Price on the S&P has stalled below resistance and will have to move above the 200d SMA (SPX2760) before we can even start to think off a retest of the SPX2815 high. C) the 20d to 200d SMAs are all pointing down. This week we can add the DJIA to item #A, and items #B and #C are still in full effect. In fact, we can lower the price zone for #B to SPX2747. Add that all TIs are pointing down and on sell, and it is logical to conclude we need to continue to look lower. Price is now in this year s lower Support zone but seems to be gunning for SPX2575 for starters. Figure 4. S&P500 daily chart. Price continues below its 200d SMA for the 2 nd week in a row: Bearish. Price still below resistance: Bearish. All TIs pointing down and on sell: Bearish. The 20d, 50d, 200d SMAs pointing down: Bearish. 5 P a g e

6 The weekly chart of the S&P500 (and all other indices) continues to deteriorate. The S&P500 closed again below its 20w and 50w SMA, and now it also closed below its weekly Ichimoku cloud: the 3rd time since the March 2009 lows. Both prior occasions led to a bounce and a lower low, but past performance is NO guarantee for future results as such analogy assumes the Bull from 2009 is still in effect, which it very well may not be! Point in case: expect lower prices not higher. In addition, money continues to flow out of the market, but is not even close to oversold (<20), while the MACD remains on a sell, and the A.I. went from bounce mode back to sell mode. Resistance is now at SPX2675 +/- 5p. A break below SPX2605 continues to target SPX2475ish based on simple symmetry. Figure 5. S&P500 weekly chart. Chart continues to deteriorate, closed again below its 20w and 50w SMA. All TIs are on a sell, including the A.I. Price closed below its weekly Ichimoku cloud. No Bullish developments anywhere! 6 P a g e

7 Market breadth and Sentiment The SPXMO (McClellan Oscillator -MO- for the S&P500) ended the week at -18, down 51p compared to last week, and all indices MOs ended the week lower. See table 1. The weekly SPXMO is now on a sell again. As such, the related Summation Indexes (SIs) are turning to sell, with the DOW-SI and NYSI already on a sell, while the SPX-SI, NASI and NDX-SI are close. The daily cumulative NYA A/D line is still in corrective mode. The 1-min TICK saw last week thirtythree peaks <-800, and only six peaks >+800 (no >+800 peak on Friday). Thus, there s still no buying, but mostly selling. This favors lower prices, not higher. Not shown here, but there are a lot of possible positive divergences building on many breadth indicators, and I ll monitor those closely in conjunction with price to tell me the major-a bottom is close. Figure 6. A) Daily SPX-SI: Still on a Buy, but barely. A) Daily NYA A/D: Still in corrective mode. 7 P a g e

8 Last week sentiment per the AAII Sentiment (what I perceive as an intermediate-term indicator) was at around their respective long-term averages. This week Bullishness dropped 10% to 25% and Bearishness rose 11% to 47%. Thus investors are getting too Bearish which is in line with my preferred POV that markets are getting closer by the day to their major-a lows. The Fear & Greed Index ended at 9 last week, down 11p compared to last week (on a scale from 0 to 100: extreme fear). Since the FGI is based on technical data, it is correct in that many charts are still very bearish. But that s all we can get from such indicator for. Last week I showed the NAAIM exposure index as it has been touted by other pundits to foretell the market will go higher since this week was a low reading. However, I found Going back to 2006, since data became available, we see A) long term bottoms tend to happen at even lower readings and B) the NAAIM hasn t even turned up yet = don t front run, as lower readings can always go lower. With this week s price lower closed on all indices, all I have to add is No comment. We can assess shorter-term Bullishness and Bearishness by checking the put/call ratios. This Friday the CPCE (equity put/call ratio) ended at 0.85 which is 11p lower than the prior week, while the total put call ratio (CPC) ended at 1.12 (18p higher). While the latter is still in the neutral zone, the former is close to panic lows, but for that we need readings >0.90. Thus, short term there s now more fear than last week, and some sentiment indicators are getting extreme. But there s no sign of a reversal or panic low just yet. 8 P a g e

9 Simple Moving Averages Charts The Simple Moving Averages (SMAs) can be used for trend-following. The Short Term (ST) chart continues to deteriorate supporting further downside instead of upside and is now 95% Bearish. The Long Term (LT) chart is about the same as last week: ~80% Bullish Figure 7 A) Short term Simple Moving Averages: 95% Bearish. B) Long Term Simple Moving Averages: 80% 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 This week I wanted to also show the LT-SMA chart for the DJIA and NASDAQ (Fig. 7). We can clearly see the DJIA s chart is looking stronger than that of the NASDAQ, which is close to rolling over into a Bear Market setup as last seen in Lastly if we simple use the cross off the 50d SMA above or below the 200d SMA while the latter is pointing up or down to define a Bull or Bear Market; respectively. We find the market is close to Bear Market Territory, which fits with my preferred longer term view of an ongoing deep correction to at least SPX Figure 7 A) DJIA LT SMA chart: 95% Bullish. B) NASDAQ LT SMA chart: 80% Bullish. C) 50d/200d SMA chart close to Bear Market cross. A B C 10 P a g e

11 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. 11 P a g e

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13 Trading Performance Private Twitter Feed: Please Join Me & Sign Up Here. 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. 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 intelligent_investing@yahoo.com. I reserve the right to refuse service to anyone for any reason. 13 P a g e