Tuesday, September 18, 2018

Zoom out - the 5th wave is the 'extended' wave

In a five-wave "impulse" wave sequence, the Elliott theory says one wave should "extend" to a multiple of φ or 1.618 times one of the shorter legs.

Usually it is the 3rd wave in the series that obviously extends, with the 1st wave initiating the series, and the 5th wave finishing up.  With the rally since the March 2009 lows, the 3rd wave, the leg from 1074 to 2134 on the S&P 500, is only a multiple of 1.5 times the first leg from 666 to 1370.

The 5th wave, which we are currently in, will reach the multiple of φ at 2950 SPX, not far away at all, and will fulfill a condition for the sequence to be "complete".  It may go further -- I project it out to 2970 in the current ending-diagonal structure we are tracing.

LOG charts, always.

SPX daily since 2009 lows

Monday, September 17, 2018

W4 wrapping up soon, then W5 up

The impulsive c of 4 wave should be swift and severe, but so far she looks weak and feeble, anemic, unsure of herself.

The W4 won't make it down to a .382 retrace at this rate.  More likely would be that W4 is a flat, and we find support on the lower daily Bollinger Band on Wednesday around 2862 SPX.

Then we can finish with W5 up to complete the ending-diagonal with a dive back to its origin at 2594.

SPX daily ending-diagonal

Tuesday, September 11, 2018

W4 in the E-D count needs another leg down

We still need the C-wave impulse of W4, into the 2830s.

Then a final (?) 5th wave up to the 2970s to complete the pattern, in the first days of October.

SPX ending-diagonal, hourly

IMO the equity markets will crash to the 2200 level into Election Day, a last-ditch effort to upset the electorate.

Tuesday, August 28, 2018

Higher then lower then higher

The channel is steeper than thought and has its origin at 2594 SPX in May.  The 1.382 fib extension of this pullback from the 2872 is 2980 SPX, a level we could reach at the beginning of October.

$IRX indicating the September hike.  Here's the steeper channel and updated count.

Strangely enough, everything still points towards the same target next March, when everyone will be begging the Fed to lay down some serious loose policy again. 

The Fed will oblige them, it will have no choice.