Flat/consolidation day for the S&P and NAS, whereas the DJIA continued its relentless Bull run. Since the low made in February 2016 (22 months ago) the DJIA has gained 8000 points, of which the last 3100 were gained over the past 6 months alone! To put that in perspective; it took the DJIA 48 months to gain 8000 points off the low made March 2009 Thus, the advance since early 2016 is more than 2x as fast and the past half year is over 3x times as fast compared to back then; talk about going parabolic. However, the end is not yet in sight as we still need to wrap up a few smaller waves for all of major-3, before major-4 will shave up to 200p off the S&P into early 2018. And after that we still need major-5 to ideally SPX2800 before all is said and done. The two counts presented since last weekend s update for the S&P and since yesterday for the NAS/NDX remain, so I wanted to look at the DJIA. Figure 1. DJIA hourly chart. Counts best as micro-3 of minute-iii of minor-5 of intermediate-v of major-3. Standard retrace targets $23,050-$22,800, but there s been nothing standard about the advance so a retrace back to the prior, 1-degree lower, 4 th wave low ($22,200) is also possible. Ultimate target based on symmetry: $24,000 Symmetry target: 24000 3100 point gain in <6 months 1800p 22200 1800p The hourly chart above, counts best as micro-3 of minute-iii of minor-5 of intermediate-v of major-3. This means micro-4 is going to be soon underway and it can ideally target $23,500-$22,800 (23.6-38.2% retrace off micro-3). But since the advance of the final 5 th wave was so extended, we may see a deeper decline to the nano-iv/minor-3 level, which was the breakout level: $22,200. Based on simple symmetry off that level we should see $24,000 eventually before all is said and done for major-3. 1 P a g e
On the S&P daily chart there the Technical Indicators (TIs) keep pointing down, wanting to see lower prices. Obviously, price is still above all simple moving averages (SMAs) and above all important trendlines, and is still in the grey up trend channel. Thus clearly anything but a bear market set up. Support is now at the 20d SMA, and the grey and blue uptrend line (SPX2544-2554). Figure 2. S&P daily TI chart: TIs still pointing down, but otherwise still a bullish chart. 2 P a g e
The S&P500 s McClellan Oscillator (MO) ended Tuesday at +1; not a strong rally in other words supporting and the SPX-SI (Summation Index of the MO) is therefore now flat. The NYSI (Summation Index of the NYA s MO) gave a sell crossover today as well, joining the NASI (Summation Index of the NASDAQ s MO). Yesterday the VIX closed above its 50d SMA and had a bullish setup, which it confirmed today by closing higher. The VIX is at the upper Bollinger Band, which is expanding: the VIX has strength. Resistance is at the red down trend line, followed by $12.5 and $15.0 Figure 4. SPXSI turning back down again. Note similar setup as during early April 2016. VIX moving higher as expected. B 3 P a g e
In conclusion: Not much to add to the S&P and NAS as both ended flat today, suggesting further downside is likely. The DJIA, however, marched higher primarily on MCD, CAT and MMM earnings, and appears very close to completing micro-3. This adds weight to the evidence that micro-3 instead of minute-iii is completing on the S&P, as discussed in yesterday s update. We ll know soon enough. Regardless, also the current corrections are still buying opportunities as the S&P should still set sight on SPX2600 +/- 10, the DJIA on $24,000 and the NAS ideally $6860 to complete major-3 and then major-4 should embark on a ~200p correction for the S&P. A bonus chart on MMM is shown on the next page. The Elliot Wave count suggests MMM is close to wrapping up its final 5 th waves. ALOHA Soul, Ph.D. 2017, 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. 4 P a g e
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