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

18 comments:

Christian Gustafson said...

c of 4 in the ending-diagonal is still pending, requires a sharp drop (50-60 pts SPX) this week before opex.

Anonymous said...

This is one bizarre inflection point. When things are this weird, I can't help but think there is something strange taking place behind the scenes.

Kevin Wilde said...

I'm in the correction camp in the short term, though looking for the year to end well for the bulls, so long as we don't see too much damage inflicted on the expected next swoon for stocks. That fits the seven year cycle, which also fits the election cycle well going into an expected big run next year. Martin Armstrong just out with a private blog post that also fits the above.

Here's my interpretation synopsis of what he expects:

The next few weeks are going to be choppy, with a panic cycle slated for the mid-term election week. He expects blow off bull to run all the way into 2020/2021, and we are getting close to blast off phase. Only thing that can bring the markets down is loss for Trump on the trade war, or he gets taken down on the political front - impeachment etc. Win for Trump on trade and markets blast off. SP bullish level is 2906 (which is where we are trading just above today,) while Dow industrial BEARISH level is 26,063 (thus bulls in charge while Dow above 26K.) He sees out-performance of late of the Dow as bullish, and due to money flows from Europe, which is gearing up for the end and reversal of QE from the ECB that creates troubles over there driving money into the US.

As I stated above, this fits the seven year cycle - which calls for bull into 2021 peak, big bad bear into 2023 - though we have to survive a tricky few weeks before we reach the blast off phase. I think we either correct by price - a quick retest of the 200 day moving averages here - or correct via time - with mid-October likely the last chance to get on board longs at favorable prices, though we may see some election week silliness before the bull train leads.

T.Berry said...

fits in perfect with my 6th inning call. martin should have started reading my posts 5 years ago. no problem with him riding my coattails----his ba will only go up.

should have listened when back in june i said the naz & russell will lead mkt higher.. those 2 have always lead to new all time record highs.

now, does the dow jones overshoot 40,000 and hit 50,000 before "the top" is in? lol

T.Berry said...

rotrot, i hope you didn't actually buy uvxy yesterday. it's heading back under 10.00 again.

T.Berry said...

expecting small pullback next week which is week before earnings season. they'll try to shake the bushes if they can then resume the new all time record highs. will s&p hit 3000 by oct month end??????

Kevin Wilde said...

Since Armstrong cycle said to buy the summer 2011 lows, and has essentially been long since, I doubt he needs any help, though I appreciate the humor.

Armstrong was out after the close saying that since the Dow closed below the 26406 level today (we closed at 26405.76) tomorrow is likely a temporary high turning point, and that would be confirmed if we close Friday below 26,211.

What I believe Martin is saying is not to ignore the corrective potential here, though once we get past the election, and we new highs going into 2019, to expect a vertical move up.

I see those bearish EW set-up CG is mentioning, and there's a lot that can go wrong here, where following reality remains called for. That, to me, means long though hedged. If trends turn scary negative then follow CG's (and ex b's) charts. If we survive the current correction and enter 2019 at new highs, aggressively play the melt-up potential.

Tomorrow is an important day in this regards.

T.Berry said...
This comment has been removed by the author.
T.Berry said...
This comment has been removed by the author.
T.Berry said...
This comment has been removed by the author.
T.Berry said...

long since 2011? lol. are you on his payroll?

T.Berry said...

he also said on monday the corrective low has began-----since then dow jones +343, nas +55 , s&p +19

rotrot said...


re SVXY & UVXY...09/19/2018 VIX expiration ambush...cautioned same yesterday via Twitter...https://www.theocc.com/components/docs/about/publications/xcal2018.pdf

re NYAD...in spite of today's rally NYAD closed -336...numbers really can be deceiving...my proprietary indicator is 0.04 from generating a bearish signal...many postulate expectations/theories regarding NYAD...don't believe everything you read! my previous commentary (via email & Twitter) prompted some interesting developments relative to my NYAD study...the developments will require me to cease sharing information about my NYAD findings...

Anonymous said...

A lot of "buy and hold" articles lately. In other words, PLEASE DON'T SELL!!!

https://www.equities.com/news/ken-fisher-time-in-the-market-beats-timing-the-market-almost-always

T.Berry said...

hugh,

just like the warnings from 5 years ago, my position remains the same---not selling anytime soon. until the fundamentals change, i see no reason not be in the stock market.

only 2 days of summer left ; )

T.Berry said...

nice to see the dow jones hitting all time highs, s&p too. heck all the index's now. nothing really holding markets back now.

never thought sideways years could be so profitable

T.Berry said...

cg, 2950 looking good---won't be long now. look forward to seeing when you start putting up s&p targets that start with "3" :)




update on "monday corrective low has began"-----since then dow jones +543, nas +135 , s&p +37

T.Berry said...

not a bad close to the "corrective low has began" dow jones + 681 , naz +91, sp +41

it's looking as if the dow jones is taking over the leadership role now that its back to record highs. the dow jones may be the one doing the heavy lifting through year end. this is extremely bullish . the dow is now within about 36 months of hitting the historic 40,000 mark. and if it does overshoot which it very well could, we may end up at dow jones 50,000.

q4 could be the best q of 2018 given the continued strengthening of the economy. the consumer confidence is at or near all time records, the us is at full employment too so look for holiday sales to smash all previous records.

this truly is the greatest economy in the history of the us and the greatest wealth creation for american's in general. once the momentum begins to get legs this market is going to soar. we are at or near a point were not much is going to be able to hold it back.

there has never been a better time to be in the us stock market.