Figure 1. SPX 1-min chart. NAS 1-min chart.

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Jonas Roberts
5 years ago
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1 In the weekend update I summarized my findings as Short-term the market should be close to completing intermediate-a, though based on a simple Bollinger Band Study, SPX2820 may well be reached first, which would allow for a further subdividing wave higher. Hence, as all pullbacks have been around 20p on the S&P500 since the SPX2630 low, any larger pullback going forward [>25p] strongly suggests intermediate-a has completed. I then expect intermediate-b to retrace back to the breakout level of around SPX2700, before intermediate-c takes hold and takes price to new uptrend highs for all of major-b at preferably SPX , with a sweet spot of SPX Today the markets gapped up 40p higher, but none held their opening gains which is not all that Bullish. These big gap ups and extensions do not make the short-term Elliott Wave count any easier, and Figure 1 shows that the truth lies between A) either intermediate-a has topped especially with the 26.8p pullback (>25p!) seen today, or B) there may be a few more subdivisions higher until it tops. It is this price ambiguity from November 23 through 28 that makes defining the exact subdivisions very hard. Thus, SPX2820 can still be reached as long as price remains above SPX2750. Figure 1. A) SPX 1-min chart. Can be counted as having completing 5 waves up. B) NAS 1-min chart. Due to the ambiguity of the November price action, a few more 4 th and 5 th waves before intermediate-a ends A B 1 P a g e

2 The alternate count as shown on the hourly S&P500 chart since last week, see below, corroborates with the NASDAQ s 1-min chart; and it also shows that as long as price remains in the uptrend channel and above the grey dotted arrow, the trend remains up. However, negative divergences are starting to build again (dotted red arrows). Last this happened didn t amount to more than a 20p pullback, but with todays ~27p, it may signal a more serious pullback. IF intermediate-a has topped, then I expect intermediate-b to drop to ideally around SPX2715 +/- 20p (38-62% retrace of wave-a) Figure 2. SPX 60-min chart. Supports both possible counts as shown in Figure 1. A drop below the lower uptrend lines, which are tomorrow between SPX will help tell the current uptrend has ended. 2 P a g e

The daily chart of the S&P500 shows a doji today: not enough buying power to stage a rally any more than the gap up. Price is now stuck in the resistance zone.

3 The daily chart of the S&P500 shows a doji today: not enough buying power to stage a rally any more than the gap up. Price is now stuck in the resistance zone. Due to the monster gap higher price was able to recoup the 50d SMA (2772) as well, and is now above the 20d SMA (2726) to 200d SMA (2762), thus technically the short- to long-term trend is now up. The Bollinger bands are expanding, showing upward price strength and all the technical indicators are on a buy. All would like to see higher prices; which would fit with the alternate count (Fig 1A, 2). The RSI5 is now getting overbought, suggesting that this bounce is likely to end sooner than later based on prior bounces (see red down arrows). Figure 3. SPX daily chart. Gap up over 50d SMA. All TIs are poiting higher and on buy. 3 P a g e

4 Another way to simple look at price is too see where it is now in relation to other bounces, and law-and-behold we ve been there before. Price will really have to rally over SPX2820 to tell us it would want to target the next resistance level (blue horizontal arrows) at SPX The SPY chart shows a gap-up daily candle with a lower close than open; and this has happened many times before, and often signals a change of trend is at hand. Figure 4 A) SPX daily chart. Back at the scene of the crime. A break above SPX2820 is needed to target SPX B) SPX daily chart. Gap up open, but lower closes have happened before, but often signal a trend change is close. A B 4 P a g e

5 The NAS (and NDX) still paint a less rosy picture than the broader S&P500 and DJIA. Price is still below their respective 50d and 200d SMA on both the NAS and NDX, and was unable to clear the downtrendline connecting the prior to bounce highs. In the mean time, price has now -per the daily RSI5- become overbought. Thus with this current setup; below the 50d and 200d SMA while getting overbought the index is becoming fulnerable to selling pressure. But, for now the TIs are still pointing up and would like to see higher prices. Let s see who wins. Figure 5 NAS daily chart. Still unable to move above the black downtrend line, while price is now overbought (as per the RSI5) but still below its 200d SMA. 5 P a g e

Today market breadth -per the McClellan Oscillators- closed higher again on all indices. See table 1, next page. In addition, the 1-min TICK had ten >+800 peaks today.

However, the fly in the ointment (there s always one ) is back in that the NDX-MO has once again reached overbought levels from where (local) tops formed before (Fig 1A).

6 Today market breadth -per the McClellan Oscillators- closed higher again on all indices. See table 1, next page. In addition, the 1-min TICK had ten >+800 peaks today. Thus, the Bulls had another good showing of internal strength today, suggesting this rally has more legs. However, the fly in the ointment (there s always one ) is back in that the NDX-MO has once again reached overbought levels from where (local) tops formed before (Fig 1A). In addition, its FSTO is about to cross lower. But, for now all McClellan Oscillators FTSOs remain on a buy, while the Summation Indices for all major market indices are also still on a Buy (See Fig 1B and table 1 next page). Thus, the Bulls still have breadth on their side as it is positive. The put/call ratios (CPC and CPCE) ended at 0.76 and 0.57 today; respectively. Bullishness over the short term thus prevails, and could require some downside to cool it off first. Figure 6. A) NDXMO daily chart. Still on a Buy, but getting very overbough. B) SPXSI daily chart Still on a buy, as are all other indices SI s but also getting overbough. Bottomline: The charts are giving some mixed signals; there s still room for more upside, but price and breadth is already getting overbought enough from where a pullback can occur at any moment. As long as the S&P500 remains over SPX2750 we can allow it to reach SPX2820s, through further subdivisions of the waves, but with today s >25p intra-day pullback, and lower close than open after a monster gap up; odds have increased for the intermediate-a high to be in. In that case intermediate-b should target SPX2715+/-20p before intermediate-c targets SPX P a g e

Short-term and intermediate-term is now available on my private twitter feed. Aloha, Dr. Arnout, aka Soul, ter Schure 2018, Intelligent Investing, LLC.

7 Table 1. Buy/Sell Signals based on Summation Indices. Table 2. Buy/Sell for the Exchanged Traded Funds (ETFs) SPY & SH and performance (intermediate- and long-term only) based on mechanical trading system. Short-term and intermediate-term is now available on my private twitter feed. Aloha, Dr. Arnout, aka Soul, ter Schure 2018, Intelligent Investing, LLC. This copyrighted daily periodical is published on most stock market trading 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 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 our information for trading and investing are the sole responsibility of the reader and cannot be construed as any type of recommendation, nor solicitation. 7 P a g e

In addition, a word of advice: when in a Bear market and my Elliot Wave Count suggests either down or a few more subdivisions marginally higher

In addition, a word of advice: when in a Bear market and my Elliot Wave Count suggests either down or a few more subdivisions marginally higher WOW, who would have known?! Price went from my upper target zone to my lower (see page 2) in just 11 trading hours: The S&P500 lost ~10p/hour Crazy. Big gap ups one day, followed by a 100p drop the next