1 P a g e. Executive Summary

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1 Executive Summary Last week I showed the big-picture EW/OEW count and overview of the NASDAQ, which aligned well with where many big-tech companies are in there respective wave-counts: I found Cylce-1 is close to completion. This week I ll go into interpreting what the market tells us and how to make trading decisions based on that information, as last week I continued to look down because all price charts information told me to do so until proven otherwise. But this week the market went up: it proved otherwise. With most major indices making new ATHs this week, the S&P500 breaking out of the noise box (SPX ), all TIs, market breadth indicators turning to buy, I changed my alternate count (intermediate-v to ideally SPX ) to the preferred and vice versa (minor-b of intermediate-iv). Our first target is SPX2428, from which we expect a 10-15p correction as the past week all bears got were 5p scribbles to the downside. We then expect SPX to be reached before the next >10-15p correction occurs. All indicators (TIs, breadth, etc) we follow turned back to buy/long the past week, while negative divergences were erased. Hence, we now continue to look up until again- the market proofs otherwise: A break below SPX will bring the alternate count back on the table. A break over SPX2428 will then eliminate it entirely. Please come join us at the new online, real time, forum: This forum was recently created by well-known and highly regarded Simon Maierhofer of ispyetf (hyperlinked), and Intelligent Investing and ispyetf have been collaborating for quite some time now behind the scenes as it benefits everybody involved. Hence, through our collaboration Intelligent Investing can now finally offer a place for you to get together, hang out, and provide real-time input and get real-time feedback. Enjoy this added Intelligent Investing Premium Member benefit at no extra cost * This forum was created for investors to share their research, viewpoints, and trades. Shared intellectual wealth benefits eve ryone. Please be friendly and courteous. We look forward to hearing from you. 1 P a g e

2 Trading Performance Update with North Post Partners, LLC NPP provides neither a boom, nor a bust. Just consistency. Another great week for us: we added over 1% this week, and we were able to erase our losses from shorts within one trading day: good trading systems are not affected by losses. Process over profit: plan the trade, trade the plan with military discipline. Stick with your system if it works. Since October last year our performance is on track to continue to outperform most major indices 1 to 2x ETFs. We look forward to another great week next week. Please contact me or Rus Chao directly (rustinchao@gmail.com) for more information. Joining NPP is absolutely free, and we charge no service or maintenance fees. Please follow NPP on (all intra-day trades are provided there in real time) Please bookmark NPP s website: (weekly digest/trading plans are posted there) *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. 2 P a g e

3 Elliot wave updates The market didn t provide much of a pullback this week; as the largest was only 5p. Often this is the hallmark of a 3 rd wave. Our preferred micro-count (see Figure 1A) remains therefore the same, and micro-analyses suggests a bullflag is forming (pink lines), which can target SPX2435ish. Bullish signs are that price broke above the dotted pink resistance line (Figure 1B), and has risen above the upper green Support/Resistance zone. However, since the largest pullback off the SPX2353 low was 11p, the next pullback shouldn t exceed it (by much) and this upper S/R zone should therefore hold going forward. Hence, a drop below SPX brings our alternate count back on the table: minor-b of intermediate-iv topped. Figure 1B shows the most common Fib-extensions we use and SPX2428 (as shown in las week s ideal-wave tracker table) is our first next logical target, which fits with the bull flag target. Figure 1. SPX 1min and 60 min chart, with preferred count Elliot Wave count shown. A B 3 P a g e

4 Technical Market update The S&P500 daily chart shows price is back above all SMAs (20d to 200d) and back above the red uptrend line, but right at the (shorter term) green uptrend line and below the black up trend line. All TIs are on buy. Last week I wanted to see all TIs already on buy to signal the 3 rd wave, and clearly that didn t happen. I was also expecting an ideal A.I. buy signal (as at the major 2 and intermediate-ii lows) to signal loud and clear intermediate-v is underway and that didn t happen either, which also wrong footed me. However, we have buy signals now (since Monday) and the market has gained since nicely (more about that on page xxx). If the RSI5 and MACD can break above their red (negative divergence) down trend arrows, further gains become much likely. Figure 2. SPX daily chart. Price back above 20d to 200d SMAs and red trend line. A.I. and MACD buy signals. 4 P a g e

5 Last week, the S&P500 s weekly chart s had become more bearish and the TIs and sell signals didn t match with a wave 3 of wave-v to SPX2500 is around the corner count. This week all of that has changed as price now shows us that it found support at the 20w SMA and rallied since. The RSI5 and MACD are turning back up; with the former erasing the prior negative divergence. Reassessing the chart I found the lower parallel green trend line to better fit when connected with the 2015 and 2016 lows. This then increased the symmetry breakout target from SPX2440 to SPX2485, which fits very well with the ideal SPX target zone. The weekly SMAs continue to bullishly align: all are pointing up and all are bullis hly stacked (20>50>100>150>200): longer term uptrend. Figure 3. SPX weekly TI chart. TIs starting to point back up, initial A.I. sell signal remains as well MACD remains on sell, but adjusted!- symmetry breakout targets SPX2485, right in our ideal SPX target zone. 5 P a g e

6 This week the NASDAQ was able to erase the negative divergence on the weekly RSI5 (hence the dotted arrows and why I continue to reiterate that divergence is divergence till it isn t) and minor-5 of intermediate-iii of major-3 of Primary-V of Cycle-1 is extending. (Extensions can never be accurately predicted beforehand: they are always possible, but never known for sure). The MACD and On Balance Volume (OBV) keep rising. What does this mean? Price momentum and direction remain strongly up, as money keeps flowing into the NASDAQ even as prices continue to rise. That s bullish. Simple. Figure 4. COMPQ weekly TI chart. In uptrend, all sell signals and negative divergences erased last week. iii? i iii 3 3 ii 1 b i ii i 1 2 ii iv 4 a 2 6 P a g e

7 Market breadth & Simple Moving Averages Charts Since the SPXSI (Summation Index for the S&P500) is derived from the McClellan Oscillator for S&P500 (SPXMO) and is the breadth-based indicator I use to also get buy/sell signals from, and not the MO itself, going forward I ll only report on the SPXSI, and other indices SIs. Same info, but one chart less. That said, the SPXSI and all other SIs (NASI, NDXSI, NYSI) remain on buy. In addition, the NYAD (advancing/declining issues) continues to make new highs (more advancing then declining tickers): no significant correction until we see negative divergence on this indicator. The number of stocks on the S&P500 above their respective 50d SMA moved back above the long term average (Figure 5C, next page); suggesting more upside ahead because 7 out of 8 times this happened in the past 18 months the markets continued to rally (green and orange up arrows) Figure 5. A) SPXSI and all other SIs turned to buy last week and remain on buy. B) NYAD keeps making new highs: bullish. A B 7 P a g e

8 Figure 5. C) Stocks above their respective 50d SMA in S&P500 above the long term average: further gains likely. C Our long-term Simple Moving Averages only chart (LT-SMA, for trend followers and long term investing) continues to be 100% bullish. It s telling long term investors to stay long and strong: major 3 still underway. As such this chart also continues to support our overall view of the market and where it will head over the next several months: higher. Our short term chart (ST-SMA, for traders to swing traders) improved last week and is now only 80% bullish; also in line with our view that a correction is most likely over. Figure 6. LT-SMA chart 100% bullish ST-SMA chart 80% Bullish. Copyright Intelligent Investing. May not be distributed without permission. Copyright Intelligent Investing. May not be distributed without permission. Below is how a 100% bullish chart look likes, everything points up. Price > fastest SMAs > slowest SMAs. The Ebola scare correction in 2014 didn t even register on the LT chart! 8 P a g e

9 Making trading decisions based on what the charts tell us. Last week I reiterated: all SI s are on a sell, while breadth itself is not convincingly strong to suggest a new rally has started. Can this change? Of course it can, all TIs, etc can change depending on price. We can always and only work with what the charts tell us now; and right now they tell us everything is on sell. Until that changes we have to stick with that observation. In addition, last week the market presented us with 1) only three quantifiable waves up, 2) daily and weekly charts with all TIs on sell; 3) price below uptrend lines and 20d SMA support; 4) negative divergence on weekly charts ; 5) and most market breadth buy/sell indicators on sell. As such I logically concluded: IF this is the start of a 3 rd wave to SPX , then it sure hasn t announced itself properly as there are no buy signals anywhere In conclusion, we see no reason to turn bullish until all the charts turn bullish as well. With predominantly sell signals on all current charts we therefore remain bearish until proven otherwise. SPX remains our target before the larger rally to SPX should materialize. So was I wrong to look down instead of up as the market ended the week up? No, clearly not as all the market told us was to look down. Note the underscored sentences: those are key to making trading decisions as those boil down to the following issue I see that many suffer from: trying to nail the tops and bottoms while entirely forgetting that trading is ONLY about being on the right side of the trade. The meat of profits are in trading the trend correctly and waiting for the markets to signal which way the trend most likely will be. Profits are not made from nailing tops and bottoms. Think otherwise still? Well, you just sold your longs at the bottom after having bought them at the top. Congratulations, you nailed both the top and bottom, but lost entirely... Instead, all good traders, firms, etc wait until the market tells them to enter a position be it long or short based on what price does (e.g. a breakout or breakdown from congestion zones; like last week) and what their OBJECTIVE indicators tell them to do at the same time: if these flip to sell/short then sell/short it is, if these flip to buy/long then buy/long it is. You HAVE TO wait until indicators flip from one side of the trade to the other confirming price s direction. That s the system; adhere to it 100% of the time. Can the system eliminate any and all losses? No! No system is perfect. Never was one, never will be one. Even big successful trading firms go through losses. BUT, in the end adhering to a good system with military discipline will reduce losses and maximize winners and it allows traders to trade (within) the trend correctly. One can decided to hold a position all the way up, sitting through drawdowns and retraces or one can sell the rips and buy the dips. Neither way is better than the other, as long as it gives profits. Because making profits (and reducing losses) is all this is about. Nothing else matters. Last week the market gave me all the signals I look for to tell a new uptrend has started: sustained breakout over SPX2400, A.I. buy signal, MACD buy signal, SI buy signals, etc. The market told the trend was now up. Then trade accordingly. Not before. Good traders catch 60-70% of a market move, none catch 100%. Trying to catch 100% comes with great risk, catching 60-70% comes with much lower risk. Does this mean the market can t turn down? No! In the very end nobody really knows what the market will do next. All we can do is establish the possibilities and what the probabilities of each possibility is. The indicators, SMAs, breadth etc then help in determining the weight of the evidence: the probability of the possibility. In this case: probabilities are highest for price to continue to go up. Next week I ll go into some cardinal rules for reducing losses. Stay tuned! 9 P a g e

10 Fib-based Trading Interval Turn dates & Bradley Turn Dates for 2017 Our next turn date is tomorrow Tuesday May 30th. There s a Bradley turn date June 9 as well. There are two very strong turndates slated for the end of June. Not shown here, but two larger Time-based intervals I follow off the February 2016 low and March 1 high are both set for early August. We ll worry about those when we get closer. January 18 (50/100 Long Terms Power) January 30 (55/100 Middle Terms Power) March 20 (100/100 Long Terms Power) April 3 (31/100 Declinations Power) April 17 (19/100 Bradley Siderograph Power) April 19 (59/100 Middle Terms Power) April 29 (19/100 Bradley Siderograph Power May 5 (30/100 Declinations Power) June 9 (61/100 Long Terms Power) June 21 (100/100 Bradley Siderograph Power) June 30 (100/100 Declinations Power) July 4 (100/100 Middle Terms Power) August 19 (17/100 Bradley Siderograph Power) September 5 (17/100 Declinations Power) September 7 (29/100 Bradley Siderograph Power) October 7 (48/100 Middle Terms Power) December 3 (23/100 Bradley Siderograph Power) 10 P a g e

11 December 6 (100/100 Long Terms Power) ALOHA Soul, Ph.D. 2017, Intelligent Investing. This copyrighted weekly periodical is published on non-stock market trading weekend days by Intelligent Investing, 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 our 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. We reserve the right to refuse service to anyone for any reason. 11 P a g e