Intelligent Investing, LLC Major Indices Daily Update 02/28/ 19

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Elliot Wave Updates Today the S&P500 was stuck in a less than 6p range. So there s really not much we can learn. All parameters remain the same a step 2: A move below SPX2764.55 (last Thursday s low) will be the 2 nd clue that a top has been struck is still needed to further suggest SPX2814 was major-1/a. For now, short term it appears a triangel is forming (dotted purple lines). This is typical for a 4 th wave and should resolve it self with a move higher: wave-5. A break above SPX2804 will most likely confirm this move. Figure 1: SPX hourly chart: 4 th wave triangle forming? 1 Page

The alternate remains of course that major-1/a has already topped at SPX2834, and major-2/a is underway to ideally between SPX2636-2525 (38.2-61.8%) after which major-3/a takes hold to ATHs. But we still can t be sure until the Bears accomplish the aforementioned steps 2 and 3: a close below SPX2764 and below SPX2731; respectively. Figure 2. SPX hourly chart: Major-1/a completed at SPX2814, but Bears need to see price move below SPX2764 first. 2 Page

To reiterate, also the Dow Jones (DJIA) can still support one more wave (wave-9) higher to complete an impulse using daily red closes as waves. But as said before, there are enough scribbles in place already to count wave-1/a as complete, so please know upside is of course limited. Figure 3. DJIA daily chart: Major-1/a could have completed on Monday right at resistance and Fib-extensions, but Bears need to see price move below the wave-6 low first to tell price is now making lower lows. 3 Page

Similarly, the RUT can still also make another up move in case we had a subdividing 3 rd wave (alt: 1,2,3,4) which means wave-iii is in and wave-iv still underway. To be followed by a wave-v to complete the impulse up. This count would fit well with the daily RSI5 in which wave-3 of iii had max momentum. But, also here, a move below last Thursday s low will be a serious first warning as then the index is making a lower low. Figure 4. RUT daily chart: Can also still support one more wave higher, but a break and close below last Thursday s low is a serious first warning the uptrend off the December low has ended. 4 Page

The technical indicators continue to deteriorate, as now the MACD gave a sell signal, it s first since late December, while the daily A.I. almost has a confirmed sell signal, but not yet. Nonetheless, the Bears still need. a move and close below SPX2775 (lower end of resistance and the lower dotted red trendline)... which will open up a retest of the 200d SMA, which will likely not hold as that much off a pullback will confirm major-2/a is underway. Thus, as long as price remains above SPX2775: still no cigar for the Bears. And, a move above SPX2804 can then still unlock as high as SPX2875, which would fulfill the pennant pattern, but I would be more conservative and aim for SPX2840ish. Figure 5. SPX Daily chart Initial A.I. sell signal moving closer to confirmation, MACD sell signal, but (trendline) support holding. Break and close below SPX2775 still needed to deteriorate the chart further and attack the 200d SMA. 5 Page

Market Breadth Market breadth as per the McClellan Oscillators (MO) declined for its 4 th consecutive day and is now negative for three of the five MO s I track for the first time since December 31. Hence, the Bulls are slowly losing the needed strength; indicative of the final stages of this rally. As said before Not a healthy sign. The NAMO closed below its lower Bollinger Band (BB) again, which could signal a renewed (snap back) rally; especially, and also, since its stochastic oscillator as well as that of the SPXMO have reached 0: see Figure 6. Figure 6. NAMO negative for the first time since December 31 and closed below its lower Bollinger Band while its stochastic oscillators and that of the SPXMO are at 0: a snap back rally can be expected within typically 1-2 days. The 1 min TICK registered no >+800 peak and no <-800 peak today (max +714, min -639), thus no real selling today. Again yesterday s equities only put/call ratio (CPCE) of 0.54, correctly foretold today s lower price as CPCE readings below 0.55 -during this rally- have consistently resulted in prices below the signal s day closing price one to three days later. Today it closed at 0.63: noise. 6 Page

Buy/Sell signals based on Summation Indices and My Mechanical Systems 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. See here for more information Bottom line: Today s less than 6p range on the S&P500 doesn t lend itself for any major conclusions, so as long as price is unable to move and close below SPX2764 (the 2 nd confirmation the Bears need), price can still move higher in a possible final wave-5, with today s pullback still being (part of) wave-4 of -v of -1/a.. BUT if price can move over SPX2804 it can target SPX2840-2860 and as high as SPX2884-2911 [but I would urge caution about these higher targets as 5 th of 5 th waves often disappoint.]. In the mean time, a triangle (typical 4 th wave pattern) appears to be forming with uptrend trendline support at around SPX2767-2774 tomorrow. Breadth is longer term very overbought, but shorter-term could be setting up for snap-back rally within typically 1-2 days. Hence, upside potential is still there, but downside risk is at this stage larger (~2% vs ~10% on the S&P500). 2019, 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 Page