PRO-ELLIOTT-WAVER

Fig 1 Gold got a spike higher on the coronavirus news as the stock market sold off, however, it was short lived and failed to make a new high. All we're waiting for here is to see if the "minor" wave 5 (blue) gives us five sub-waves to one last high above 1611.00 to complete the formation. Wave [iv] (green) can still be working but, the longer it takes the less likely it becomes. Fig 1 above shows the invalidation line which is the wave 4 low. Breaking below this low at anytime before making a new high will confirm a top is in place. The over 4 year long bear rally from the 2015 low will be complete as "intermediate" wave (C) (red) which will lead to much lower prices. Fig 2 Notice in Fig 2 that there is a large wave i (pink) in the top left corner and a large wave-ii (pink) in the lower right corner. These labels represent the "cycle" degree time frame (10 years or longer) with the high of wave-i marking the all-time high in the pr...

Prior to the holidays we posted an update that said..."the most bullish week of the year (Thanksgiving) didn't disappoint bulls this year. Veteran traders know that 85% of the time the markets rally during that week but, not all traders are aware that the wave count also has to be in a position to support the rally or it doesn't happen". Fig 1. Through all of last year the market traded in a wide, sideways range making it difficult to determine if the market was still correcting from the 2018 highs or if the January 2019 low marked the end of the correction. Days before and into Thanksgiving the market moved high enough to finally confirm that the "intermediate" degree wave (5) was underway and that the Jan 2019 low was in fact the end of " intermediate" wave (4). Fig 2. Our alternate count from last year moved to the primary count as price moved above the white dashed line. Notice in fig 2 price moved above the trend-line and i...

The most bullish week of the year (Thanksgiving) didn't disappoint bulls this year. Veteran traders know that 85% of the time the markets rally during that week but, not all traders are aware that the wave count also has to be in a position to support the rally or it doesn't happen. Coming up will be the next most bullish week of the year (Christmas) also with an 85% track record although the size of the rallies are not as big on average as Thanksgiving. Our last update showed how price had completed a small "triangle" that would be followed by a quick rally. The next morning the market gapped higher and rallied to a new high in an impulse five waves. Price then fell back to the area of wave-e of that "triangle" also described in the update. We labeled that chart showing that the rally would end an "extended" fifth wave but instead only completed a smaller degree wave-[5] of wave-iii shown on today's chart. The updated chart shows th...

The market has traded in a tight range for the past two days which fits with the wave four correction suggested in the last update. Our chart shows how a "running triangle" may  have completed at today's low to end a small degree "sub-minuet" wave-iv. Triangles sub-divide as five wave formations with the sub-waves each tracing three waves. Each leg in most cases will have a price relationship with a previous leg. This triangle has multiple wave relationships... (C= A)...(D= 61.8 of B)...(E= 61.8 of C). This will be confirmed if we see a sharp rally to new highs as wave-v. This new high price will complete a thirteen wave formation with wave (v) being the extended wave within the impulse pattern. Follow the Trend and "Trade Safe"

The Dow supports the same wave formation that we showed in the S&P on Friday....the "zig-zag" pattern from the December low to complete wave-D of the larger triangle. This chart shows an interesting price target that was hit on Friday that helps to confirm the triangle scenario. There are several ways to calculate price targets for where the five wave rally (thrust) as wave-[c] out of a triangle could terminate. In this case we use the maximum high and low at the beginning of the triangle...indicated by the small red up and down arrows. The first target for wave-[c] should be a 61.8% relationship to this calculation. Friday's high in the Dow met this exact calculation shown on the chart. This doesn't have to be the exact high but, the fact that traders did sell the market at this price helps to confirm our primary count. The initial decline from the high on Friday can count as a small five wave impulse on the 15 min chart which could be the first clue...

Yesterday we posted charts of the SPX showing the short term impulse rally underway now, along with a look at what has taken place over the past year. We label the rally from the December low to show a "double three" (w-x-y) that is currently finishing wave (c) of [y]. This will also complete either wave D of the much larger "expanding triangle" (that we've been updating for most of this year) or wave B of a large "flat." If the market traces out a "flat" it will be in the form of a "running" or "expanding" which will be determined once it's underway. Today we are showing another way to count the rally from last December which is our primary count. It is hard to ignore, visually, that the sideways grind since May has the look of a "running triangle" formation.  Under the "triangle" interpretation the rally from December would count as a "zig-zag" with five waves of [a]......

Follow the Trend and "Trade Safe"

Follow the Trend and "Trade Safe"

Gold is still in the process of forming an impulse five wave structure that started from the low made in August last year. Price is currently working on "minor" wave 4 within the formation and once complete will see a rally to a new high for "minor" wave 5. The last Gold update showed that "minor" wave 3 had reached the price where 3 was equal to 1.618 x 1. That remained the high and price has been in a "minor" wave 4 correction since. So far, wave 4 has declined in three waves to the Fib 27.2% retracement of wave 3 that we have labeled as "minute" wave [a] of 4. A three wave bounce from there is labeled as wave [b] of 4. Expectations now would be to see another three or five wave decline to complete a "flat" for wave [c] of 4 with targets being 38.2% or 50.0% of wave 3. Price could also continue in the same range to eventually form a wave 4 "triangle." Once wave 4 completes we should see the start of a...

Back from a two week vacation that seems to have been timed perfectly because the market hasn't hardly moved. In our last update we were tracking a five wave structure that would complete wave-c. With today's low it appears that this is still the primary count with the exception that we can now see extended sub-waves of the formation. Today's chart is labeled showing how the market is sub-dividing with near perfect Elliott/Fibonacci sub-waves. 1) "micro" wave [3] of iii was 1.618 > i 2) "micro" wave [5] was equal to [1] being only a couple tics above [3] to maintain the 1.618 for all of iii 3) Today's low was 38.2 of wave iii to complete wave-iv 4) Today's low also hit the Elliott lower channel line This would all indicate that "sub-minuet" wave-v to a new high began at today's wave-iv low. Targets for this move would be to the 3023.00 area where wave-v would be .618 of wave-i. This would barely be a new high abov...

Follow the Trend and  "Trade Safe"

In the previous update we outlined a potential triangle structure for wave (b) that completed into Thursdays close. However, overnight trade broke above the maximum price allowed at 2039.75 invalidating the potential triangle. This now confirms that wave-c/y of (b) becomes the primary count which is in the very late stage. The two charts are labeled to show that the only options here are whether wave (b) will end as w-x-y or a-b-c. If the complete pattern ends with wave-y then the high today makes wave (b) complete. If the correction off the high today is a small degree wave [4] then we will see another small rally early next week for wave [5] to complete wave-c and to further complete wave (b). Once complete Wave (c) down will still have targets to or below 2720.00. Follow the Trend and "Trade Safe"

Today's gap up open violated the wave-i of (c) down shown in the last update but, brought an interesting pattern we have been watching to the primary count. At the end of wave-c  we noticed that there was a 4-1/2 point relationship, shown in the blue circles, with the low of wave-b and the top of wave-c. This was an early sign that a "triangle" structure could be forming for wave (b). When the decline from wave-c finished we measured 9 points from the wave-b low and then with this mornings gap up we eagerly watched the 2930.75 price target where wave-e would also be 9 points from the top of wave-c. The exact high today was 2930.75 and then price declined. So, there is a good chance that today marked the end of a three week long correction that formed a "contracting triangle" for wave (b). Price did drop but not far and also failed to form a small impulse wave. For now we need to see a further move down below 2900.00 to confirm that wave (c) is under...

The last short term update showed that one more push lower was needed for a five count to complete wave-i. Visually this would have made the five look better. Today's corrective rally that started late Friday gapped up this morning and continued to the 61.8% Fib retrace of the entire drop from the wave (b) high. It is still possible that today's rally is wave [4] and another low would be [5] of wave-i because nothing has been violated yet, other than appearance. The blue shaded line shows where wave [4] can't go and price came right to it and reversed. The other observation we make against wave [4] is that wave [2] retraced a Fib 78.6% of [1]. Since [2] was this big we would expect [4] to retrace no more than 38.2% of [3]. For these reasons we've labeled the chart as having completed wave-i on Friday with today being wave-ii and watching for confirmation that wave-iii down is under way. The only alternative would be if the market attempts another ral...

We first mentioned a gap on the chart after the five wave decline completed in 2014 as a target for the coming correction. Little did we know it would take six years but price has made it to and exactly filled a small gap that has been open since 2013 (shown on the chart). Currently, the chart has been labeled showing that price is working in "minor" wave 3 of "intermediate" wave C. The overnight high of 1565.00 hit a Fib - 3 = 1.618 of 1 - and also was right at a 50% retrace of the decline from 2011/2014. Wave 3 could have one more down/up sub-wave before completing but, it's not necessary and wave 3 could be complete. As we now monitor for a wave 4 correction and watch for a wave 5 rally to complete wave C...we only see one alternate.  Price has already achieved several of the targets for the ABC correction from the 2014 low. It's possible that the current rally (C) will end as a three to match (A) of five. This would make the entire correcti...

Last week's update was counting the rally over the past week as wave (b) which was correcting the initial five wave impulse decline from the ATH labeled as wave (a). Confidence in this count was helped over the week by a shrinking advance/decline along with volume and momentum divergences. And now (finally) with today's large decline we have price confirmation. Wave (c) down should be under way now which should form a five wave structure. Price still needs to move below 2820.00 but once it does we should see a move to or below 2720.00 before completing wave (c) of a larger wave [a].  It's possible that the market could drop in a large five waves down from here to the December low. Our labels reflect that the wave formation will be a double three which is why we label at the "minuet" degree for now. However, we could change this to "minute" degree if price gets carried away and forms a single "zig-zag" down to our expe...

Since the low last Thursday the market rallied tracing out a small five wave pattern into yesterday's high. We posted this chart yesterday labeling the rally as (ii) or (b).  We thought there was a chance to add a small sub-wave today to retest the internal trend-line but price was unable to rally and instead declined enough to confirm the top yesterday...at least short term. If price did in fact top then today should be the start of a larger decline. We label the chart with (iii) or (c) because it's not clear what structure the decline will take seeing how we believe this to only be part of a larger degree correction over the next couple of months as the long term chart posted shows. The bull scenario now would be that this five rally is only wave-i and will subdivide higher before completing (ii) or (c). Obviously another move to challenge or break the recent ATH would have the potential for a strong impulse wave much higher. Follow the Trend and "Tr...

Last week we saw the futures decline to complete five waves from Tuesdays high to the low on Thursday. The subdivisions of the five waves provided us with several Elliott patterns as labeled on the chart. Wave-iii had five sub-waves ending with a diagonal [5] of iii that was followed by a triangle pattern for wave-iv. Once wave [E] within the triangle completed price dropped to a new low tagging the lower trend-line to end the five wave decline.  The chart also points out that wave-v was the same length as wave-i. The decline can only count as five waves of -c- of an a-b-c or wave (i) starting the next impulse decline once the market corrects for wave (Ii). The problem with the wave (Ii) scenario is that Friday's reversal appears to be forming five waves up which would be bullish for a move above Tuesdays high at a minimum. Follow the trend and "Trade Safe"