World Cycles Institute

Looking Ahead: After the Top

Forecasting the Top

Elliott Wave Theory has a poor timing component to it. Mostly it’s used on a grand scale “after-the-fact.” I find that it has little predictive capability. So, it’s best to rely on other cycles data to get a sense of where the top of the market might be.

Looking at the subwaves in the contracting fourth wave triangle that seems to be tracing out now, and based upon the length of the waves in place so far (time-wise), I can see a top forming at the end of May.

Drawing on the Bradley Siderograph data, which is freely available online, I see there’s a potential turn coming up around the June 9, 2018 time period. This may coincide with the top of the market, as it seems to sync with my Elliott Wave forecast.

This could result in a “crash” in the early to mid part of September. This is highly speculative, but presents a scenario that is reinforced from two technical tools.

Above is the 2 day chart of the SP500. We’re  currently in the final fourth wave (an unconfirmed contracting triangle — will be confirmed once the D leg up is complete (see the daily chart below of ES).

At the moment, my measurements suggest the top of the fifth wave may be 2960, but let’s round that off to 3000 for a sake of this simulation. In this case, a first wave down in 5 waves will likely drop to just below the 1800 level.

Once this impulsive first wave down is complete, a second wave (in three waves) should trace out to the 62% level, which in this case would be about 2,500.

In the event that we achieve a final top at the end of May, or early June, this sets up a potential third wave crash for September. The first and second wave sequence can easily take two months to unfold (the timing here is somewhat speculative, of course).

The eventual multi-year drop may trace out similarly to 1929-33. In that case, it may look somewhat like the chart below, extending over a longer period to about 2022.

Above is a daily chart of the DOW for the period 1929 – 30. showing a large portion of the ABC wave down that ensured after the top was in. The C wave in the chart is not complete, having eventually bottomed at about $41.00.

You can see that in this chart, the top of the market was in the beginning of September, while the “crash” didn’t take place until a couple of months later (Oct 24). However, the bubble this time around is very much larger, so we may see more time in required for the fulfillment of the wave i/ii requirement after the top.

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The Market This Week

Here's the latest daily chart of ES (emini futures)

Above is the daily chart of ES (click to enlarge, as with any of my charts).

On Friday, the fourth wave of the C wave of this D leg of this contracting triangle we appear to be in, dropped to within 3 points of my measured target (2657) and then turned up. Expect a continuation up from here.

The large fourth wave contracting triangle continues to play out, as predicted. I've been projecting about a month (or a bit more) left is this topping process, but the length of time this D wave has taken to trace out is pushing that date back slightly. The Bradley chart above might be closer to the truth.

The target on the upside remains 2780 and the action the latter part of this week certainly support a full wave to the fibonacci target (I address this under the 60 minute chart, below).

I would expect the next wave down (after we reach the 2780 area) to be much quicker, as this market is so near the top (we're seeing a lot of underlying weakness).

After the E wave down is complete, we'll take off again to the upside in a fifth wave, which will simply finish off the pattern. We'll get to a new high and probably more, but don't expect (as I've been saying for a very long time) a large fifth wave that travels any great distance.

Over the next week, we have the fifth wave left of the C wave of the D leg of the contracting triangle.

Summary:  We should head up this weekend in a fifth wave of the C wave of the D leg of the contracting triangle. This fourth wave triangle has the balance of the D leg, the E leg (down), and a final fifth wave to a new high left. That fifth wave up to a new high will be the end of the 500 year bull market.

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{ 26 comments… add one }
  • rotrot April 22, 2018, 1:12 pm

    “Elliott Wave Theory has a poor timing component to it. Mostly it’s used on a grand scale “after-the-fact.” I find that it has little predictive capability. So, it’s best to rely on other cycles data to get a sense of where the top of the market might be.”

    – as to “Elliott Wave Theory” your representations are nothing short of astounding
    – as to “cycles data” your representation is spot on
    – in both instances, your representations are totally consistent with the viewpoints contained in my emails the last several months to readers/posters at this public blog

    • rotrot April 22, 2018, 1:48 pm
    • Peter Temple April 22, 2018, 3:01 pm

      rotrot,
      haha … the price predictability of EW is astounding, imho, if the analyst has any idea what he/she is doing.
      Thanks for the kind words.

    • rotrot April 22, 2018, 3:19 pm
    • rotrot April 24, 2018, 12:55 pm

      I am obviously out of sync with the majority of posters at this public blog…to demonstrate my point, below are several of my recent tweets:
      https://twitter.com/allerotrot/with_replies

      @allerotrot Apr 16
      nice observation…EW counts should be consistent with obvious technical indicators…

      @allerotrot Apr 16
      cycles and astro cause me to believe the market will stay afloat until April 18/19…be well!

      @allerotrot Apr 20
      it will remain to be seen if Thursday was “the most important pivot since the January 26 record highs”…however, it was a pivot…

      @allerotrot Apr 21
      SPX daily…next week selling is likely…

      @allerotrot Apr 21
      VIX has made a low…might prove to be a significant low…

      @allerotrot Apr 21
      BPCOMPQ has made a lower high…

      @allerotrot Apr 23
      BPCOMPQ sell signal this morning…

      @allerotrot 4 hours ago
      DISTRIBUTION…different day…same scenario…ramp the overnight futures so the retail investor/trader buys the market open…on another note, yesterday’s BPCOMPQ sell signal was spot on…

    • rotrot April 29, 2018, 4:09 am
    • rotrot April 29, 2018, 4:35 am

      NYAD weekly…orange/blue trend indicator is at a critical juncture…bulls do not want to see orange cross below blue…
      https://tinyurl.com/y8ve6o79

  • Pieter van Leeuwen April 22, 2018, 1:41 pm

    Hi Peter … should I take your blue (C) wave projected for June, as the end of the move from 2011, and the end of a larger B wave from 2009?

    • Peter Temple April 22, 2018, 3:01 pm

      Yes, but the June 9 date is so far somewhat speculative.

  • Willem April 23, 2018, 9:35 am

    OK This week down. Some recover on wednesday, because the ECB-announcements are on Thursday. Strange pattern is on that day and 3-4 indicators are negative on that day. So Beware! After the recover from the LOW on Thursday we decline into the weekend. Probably into 1th or even 4th may.
    http://www.prognoseus500.nl/

  • Joe Longwill April 23, 2018, 1:12 pm

    Daily Chart of the russel 2000 ( $RUT )
    in Wave E Now ????????
    Looks like very Clean contracting triangle

    • Peter Temple April 23, 2018, 1:28 pm

      It’s exactly the same configuration as the SP500.

      • Peter G April 23, 2018, 5:01 pm

        Not clear what you mean, Peter. Does your comment of “exactly the same configuration as SP500” mean you disagree that RUT (and SP) are in Wave E now, thus suggesting neither RUT nor SP are in Wave E yet as Wave D is still expected to reach ~ 2780 on SP500. Thanks for any clarification…

        • Peter Temple April 23, 2018, 6:04 pm

          Peter,
          They’re the same, so that puts both of them in wave D.

        • Peter Temple April 23, 2018, 6:50 pm

          Sorry, I was looking at the Russell 3000 as rut (as I went out the door). I get those confused at times. Rut (2000) is not in a triangle that I can make out. I don’t know what the pattern is. It’s the 3000 that’s the same as SP500.

          DOW also is not in a triangle. It’ll likely just to 5 waves to a new high.

          • tedward728 April 24, 2018, 5:44 am

            Are you suggest that Dow needs to still complete it’s wave 4 down, as a new low to finish wave 4 when all other indices finish wave e of the wave 4 triangle? Or something else?

          • Peter Temple April 24, 2018, 7:16 am

            No, the DOW has a double bottom. That’s wave 4. It’s now in wave 5 and has to reach a new high. SP500 is technically in a wave four triangle. Wave 5’s out of triangles are not large waves, so everything will more or less top at the same time.

  • Joe Longwill April 23, 2018, 2:25 pm

    Just keeping my notes from prior thread .
    24455.44-24393.62 is the pivot range for the cash dow .
    Dow held the level on a closing basis .
    No other thoughts at the moment .

  • Joe Longwill April 23, 2018, 6:40 pm

    I’ll agree to disagree on the $rut .
    My bias is it may become the leader on the way up
    And be the leader to break down after the top.
    This implies after the triangle completes the rut
    Would bottom in a wave 2 of the final 5 th wave as the spx
    Or Dow completes wave E. This also allows for a bit more downside
    Action in at least the $rut in the coming days .
    To go a bit further the $ rut could be in wave a of E now
    Which would allow for a wave b bounce then wave c down to complete E.
    The $ rut to me looks like a much cleaner wave count .
    Just my view is all.
    We will know soon enough .
    Wave E tends to bottom near the .618 retrace.
    Either way a bit more sideways action in the broader sense
    Before the pattern proves itself .
    My opinion based on typical triangle formations

  • tedward728 April 24, 2018, 11:43 am

    A few interesting notes on current positioning and timing Using SPX

    – We have Retraced a little over 50% of the move from 4/2 Low o 4/18 High
    – Looking at the timing and 50% retracement in the B wave That happened on the 15th trading day, inclusive of the Feb 9th bottom We are the 17th trading day in the D wave, assuming today is the bottom of a B wave
    – The April 2- April 18th high was 163.69 points. If we add that to today’s low 2632.8, that get us to 2796.49, a little above Peter’s target.

    Using the C wave of B length of 154.58 that gets us to 2787, close to Peters Target. If we are at the bottom of B, we should get a pretty strong wave C that tops right after the fed Meeting.

    • tedward728 April 24, 2018, 12:13 pm

      2617.8 As the day low on the SPX. Adjusted targets from above numbers

      163.69 + 2617.8 = 2781.5
      154.58 + 2617.8 = 2772.38

  • John April 24, 2018, 12:17 pm

    Everything is pointing to a low on April 30 into the full moon.. also moonwobble peak energy, I think it will surprise everybody how deep.

    • Liz H April 26, 2018, 11:53 am

      Thinking today may be a swing hi or tomorrow morning at open with a fade like 3/27.

      • John April 26, 2018, 1:37 pm

        I think so too Liz, a sharp drop into next week.

        • Liz H April 26, 2018, 1:56 pm

          Let’s see reaction to AMZN and MSFT earnings.

  • Peter Temple April 29, 2018, 12:03 pm

    A new weekend free blog post is live at: http://worldcyclesinstitute.com/ew-the-penultimate-wave/

I welcome questions or input about Elliott Wave, cycles analysis, or astrological input relating to any market. However, due to a heavy schedule, I may not have the time to answer questions.

I reserve the right to remove any comment that is deemed negative, disparages the Elliott Wave Principle, is otherwise not helpful to blog members, or is off-topic.

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