In the weekend update I presented 3 different counts for the S&P in order of probability 1) micro-1 ongoing with nano-iv at SPX2578 and nano-v to SPX2595 underway (60%). 2) Micro-2 topped at SPX2590, micro-c to SPX2540+/-5 for all of minute-iv underway (30%) 3) Triangle forming (10%) Although the last thing I want to do is to confuse my readers, I do have to show all the possibilities I see with the latest information at hand as it is also possible that micro-1 of minute-v already topped at SPX2590 and micro-2 is now underway to SPX2570ish or has already bottomed at SPX2578. This is a 4 th possibility, but it now has the highest probability, ranking it together with option 1) given improving market breadth, improving TIs on the daily chart and continued rally in the RUT. This means the micro-b wave high and triangle formation are now low and lowest probability (20% and 10%). The reason I present this option -and as a high probability- is because the intra-day decline on Wednesday October 15 th was only 9.53p. Rounded that adds up to 10p, but I do need to see waves >10p in order to count them. Hence, the whole advance from SPX2557 to SPX2590 counts best as one wave up. Figure 1. SPX-1min chart. Since the intra-day decline on Wednesday was only 9.53p (and thus <10p) it s entirely possible SPX2590 was micro-1, and micro-2 bottomed at SPX2578 or will continue to decline to SPX2570. 2? Like the subdividing micro-1 count, it means minute-v (major-3) can target SPX2645ish. Please note that a move >SPX2600 (which is well-beyond the typical v=i relationship for nano-v) from current levels, places the shown count front and center. It also means, and as has been repeated many times before: shorts have no place in this market yet other than quick trades to make some money on counter trend moves. Thus, to recap: 1) Minute-v underway (70%, both count ultimately target ideally SPX2640ish) a. micro-1 ongoing with nano-iv at SPX2578 and nano-v to SPX2595 underway. b. Micro-1 at SPX2590, micro-2 at SPX2578 or to SPX2570. 2) Micro-2 topped at SPX2590, micro-c to SPX2540+/-5 for all of minute-iv underway (20%) 3) Triangle forming (10%) 1 P a g e
On the S&P s technical indicator (TI) chart, things are slowly improving with the A.I. non-ideal buy signal now confirmed. The weak signal could be due to the fact we re dealing with a 5 th of a 5 th wave; which are most often weakest (only extended 5 th waves are strong). But price, is still above its 20d SMA and above trendline support. Thus the trend remains up. Figure 2. S&P daily TI chart: Weak A.I. buy signal confirmed. Price still above the 20d SMA. Bounced right off the 23.6% retrace. More indications of a minute-iv low at SPX2557. 2 P a g e
The RUSSELL2000 continues to rally and is gunning for it s minimum target of $1520, possible higher based on the Bull flag pattern and the 5=1 relationship. The A.I. buy signal from last Thursday was correct and the MACD is now about to give a buy crossover as well. Here you can already see that a good A.I. buy signal out performance the MACD by several days. The former means one is already long the RUT (via the IWM), whereas the latter means one would still have to wait till tomorrow at least. All other TIs are pointing up; wanting to see higher prices as forecasted using EWT. Due to this index I can t be too bearish about the S&P, DJIA, NAS and NDX and expect those to rise to new ATHs soon too. Figure 3. RUT daily TI chart: strong A.I. buy signal, bullish engulfing candle. 3 P a g e
The S&P500 s McClellan Oscillator (MO) ended today at -11, up 7p from last Friday s close. Improving, but it is still negative: more stocks are still declining than advancing. That s still not very Bullish. However, the NDX-MO, NAS-MO and NYMO are now positive. As such, the SPX-SI ([Cumulative] Summation Index of the MO) remains on a sell, as well as all the other SIs: DIA-SI, NYA-SI, NDX-SI, NAS-SI. But, the latter three SI s are now starting to point back up as the MO s are now positive. Hence, a clear improvement. Another improvement is the NYA-A/D cumulative line for common stocks only moved up over the (red) downtrend line today (The regular NY-A/D did the same today). As said last Thursday and in the weekend update A break above the green trendline is a first sign of a new uptrend, which will be confirmed by a break above the red one. Thus, the A/D lines for the NYA are telling us to expect higher prices as more and more stocks are now advancing (in line with the improving MO readings); see prior similar setups (orange boxes). Figure 4. SPX-SI and all other SIs remain on a sell as breadth remains negative, but continues to improve. NYA A/D common stock cumulative line now in new uptrend mode. 4 P a g e
In conclusion: On Thursday I mentioned as long as SPX2578 holds, the market has the potential to set up an impulse to SPX2595. So far that is still in the charts. The EWT counts have been update and favor now two bullish options; both eventually targeting SPX2640s. Market breadth continued to improve today; and the NY A/D cumulative lines both entered uptrend mode today. The daily TI charts for the general indices continue to improve, and the RUT is now in wave-5 to at least $1520, ideally $1580. Hence, more evidence is pointing to higher prices than to lower prices. Since in a Bull Market (and especially a strong one like this one) surprises come often to the upside, it s prudent to continue to look up until proven otherwise (i.e. a break below SPX2557). 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. 5 P a g e