Summary All the charts are now improving due to Friday s strong close, bringing the S&P back above its 20d and 50d SMA and giving renewed buy signals on the daily and weekly time frame on several TIs. Thus, the short-, intermediate-, and longterm trends are all back to UP. In addition, the weekly NAS is now on a buy, and the breadth indicators we track are very close to buy signals as well. The NAS is now only 2% from its ATH, while the S&P is 4.6%. The former, combined with all these positive signs we have now at hand*, suggest the current up move has more room to run and major-4 is either over or turning into a more complex triangle. The three main counts I now track are: 1) standard impulse up for major-5; 2) ending diagonal triangle for major-5; 3) symmetrical triangle for major-4. Short term, each count is looking at S&P2800 for now. Longer term the impulse and EDT are looking for SPX3000+ more immediately, whereas the triangle will first produce some more whipsawing before the market embarks on that same rally. *when the charts improve and give buy signals all we can do and need to do is to adjust accordingly. What they tell us now is also all we can work with. Elliot Wave-wise there are shorter term a few options, but several are Bullish as well. Thus, the weight of the evidence tells us to be more Bullish than last week and adopt accordingly. IF and only when price and the charts turn south we ll adjust again. How to trade this? Short/Inverse ETFs stops were hit on Friday at SPX2731. Now we can go long with a stop loss at SPX2698. Next target is SPX2800+. IMHO both long term and aggressive investors can go long as all chars are improving and suggesting the worst is behind us. 2872 Major-3 2900-3000 Major-5 SPX2800+? Minor-5 SPX2544 You are here Intermediate-a? SPX2533 Major-4? 2533 1 P a g e
Trading Performance Update with my joined Hedge Fund: North Post Partners, LP NPP provides neither a boom, nor a bust. Just consistency. We ended the week pretty much flat. We are eyeing several old and new tickers for next week, but will reduce risk to 1x instead of 2. Now that NPP has transitioned into a Hedge Fund we can start accepting new clients again. Hence, 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! Please follow NPP on TWTR: @NPPtrades (all intra-day trades are provided there in real time) Please bookmark NPP s website: http://northpostpartners.com/ (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
Elliot Wave Updates Last week I presented the 4 different bigger picture options were dealing with, which I will reduce to 3 as the bears are running quickly out of real-estate (see page 5). Today I wanted to use the NAS 1-min chart for form to analyses the near-term options. The first (Fig. 1A) shows a clear 5-waves up off the $6626 low made February 9; followed by a quick ~23.6% retrace. Simple i, ii setup? If so, we need to see wave-iii kick in soon with a surge in breadth and a pricebreakout. From a daily-chart perspective (not shown) that would mean a break above major-3 at $7506, which is only 2% above Friday s close. The shown (red) a/b count is therefore IMHO less likely as wave-c can than easily target $7913 (c=a), which is well-beyond major-3. Note the S&P has still 4.6% more to go to reach the major-3 high at SPX2872. The short-term alternative is that (green) minor-wave-5 of (red) intermediate-i is still underway where minor-4 was an irregular flat. Thus the i, ii and 4, 5 of i count is what I will focus on. I can count green minor-1, 2, as an a- and b-wave instead, and label red intermediate-a/i and b/ii as a grey minute wave-a and-b of minor-c, but that would still target $7597 at a minimum (c=a), which is also well-beyond the major-3 high and has a rather disproportionate a, b, and c-wave. Hence, why I don t like it. Regardless, the 1-min charts tell us to expect higher prices. Figure 1. NAS 1-min charts. A) 5 Waves up completed. B) Or only 3 with an irregular 4 th /b-wave? 3 P a g e
When we leave all the possible short- to intermediate term wave counts behind us and simple look at the technical price chart of the S&P, we can observe the following: 1) price closed on Friday above the 20d and 50d SMA: short- and intermediate-term uptrends are back; 2) All technical indicators are pointing back up and are on a buy, including the daily A.I. and MACD (green boxes and dotted arrow); 3) bearish 20d/50d SMA cross; 4) resistance is at the black and blue uptrend lines (SPX2800, SPX2860; respectively). Thus, the technicals are now predominantly Bullish. The daily chart tells us to expect higher prices going forward. Hence, the three main options I will focus are: 1) standard impulse, 2) triangle 4 th wave, 3) ending diagonal triangle. See next page Figure 2: S&P daily TI chart: price recaptured 20d and 50d SMA, A.I. and MACD buy crosses. All TIs pointing up. 4 P a g e
Figure 3. S&P daily charts 3 most likely options 1) standard impulse, 2) triangle 4 th wave, 3) ending diagonal triangle 5 P a g e
Staying with the NASDAQ for form, its weekly chart shows how price bottomed exactly in the 23.6-38.3% target zone 2 weeks ago and has now recaptured all the important SMAs and trendlines. The TIs are pointing back up, and the A.I. gave a buy crossover this week. Price will need to break below the upper orange trendline followed by <20w SMA to suggest a c-wave down is underway. Regardless, what this price chart tells us now is to expect higher prices going forward. Note there was no negative divergence on the RSI5 and MACD prior to the recent correction, which may set up now. In conclusion: the weekly chart(s) are rapidly improving and back in uptrend mode, wanting to see higher prices as well. Figure 4. NAS weekly TI chart: A.I. back on a buy, MACD almost. Price back above upper trendline, and >20w SMA 6 P a g e
Market breadth, Simple Moving Averages Charts and Volatility The SPXSI (McClellan Oscillator [MO] derived Summation Index for the S&P500) is still on a sell albeit the SPXMO ended the week at +23. Down 8p compared to last Friday s close and thus in line with price not having made a new uptrend high. All daily MIs are still on a sell, albeit breadth is positive, but the NASI, NDXSI and NYSI are now close to buy crossovers. In fact, Friday s breath readings were strong enough to move the daily S&P cumulative A/D line to a new rally high after it found support did move back above its 21d EMA, which is often a good sign for a continued rally. In conclusion, breadth is improving, to the point where we will get buy-signals, further supporting the Bullish case for higher prices Figure 5. A) The SPXSI still on sell, but breadth positive. B) S&P cumulative A/D back above moving averages: bullish A B 7 P a g e
This week I wanted to show the percent of stocks in the S&P above their 50d SMA and 200d SMA; respectively. We can observe that the former dipped below its 2 standard deviations reading (-2 STDEV), which in the past coincided with important lows (blue circles). Similarly, the latter dipped into the zone (red boxes) from where -since the uptrend from February 2016 started- important lows were made. In the current cases, both have now surged higher. Hence, also these two indicators suggest an important low was struck and higher prices can be expected. Figure 6. Percent stocks above 50d SMA (A): and above their 200d SMA (B). A B Not shown here, but volatility (VIX) continues to drop, losing another 15% this week, ending at $16.49. A lower VIX is good for higher stock prices. Very simple 8 P a g e
The Simple Moving Averages (SMAs) trend-following charts show that the past two weeks made no dent in the longterm moving averages: Still 100% Bullish. The short-term chart obviously is still about 40% Bullish. Although these charts can t really predict the market s next move, as these are simple trend following, larger corrections are often foretold by either a tightening of the SMAs (price is topping and not going anywhere over a longer period of time, something we ve not seen yet, causing the SMAs to stall) or the short term chart turning slowly bearish. Figure 7. Short term Simple Moving Averages: 40% Bullish. Long Term Simple Moving Averages: 100% Bullish. Copyright Intelligent Investing, LLC. May not be copied and/or distributed without permission. www.investingintelligent.com Copyright Intelligent Investing, LLC. May not be copied and/or distributed without permission. www.investingintelligent.com 9 P a g e
Fib-based Trading Interval Turn dates & Remaining Bradley Turn Dates for 2017 The Bradley Turn Dates (BTD) on January 29, 2018 and my Fib-Based Turn Date of January 31, were spot on. Their recent turn dates of February 20, and February 22 respectively, may have been spot on as well, but not been a top, but a low. The next turn dates are March 27 (BTD) and March 21 (FBTD), respectively, which once again align very nicely. All TDs are always +/- 3 trading days. Figure 8. Fib-based turn dates: February 22 was Thursday s low. Next turn date March 21. 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. 10 P a g e