World Cycles Institute

Options at the Top

The Spiked Top in the US Indices

All major markets are continuing as one. We’re at a top but the process of changing trend doesn’t happen overnight. The spiked top is the example—tops like this usually don’t last. Trends don’t “change on a dime.”

The waves down are corrective—they don’t look motive. Some reasons why:

  1. The current C wave (what one might consider to be wave five of the set of waves down in SPX) is of a size that is much bigger than the wave in the second wave position—it doesn’t have the right look of a motive wave.
  2. The second wave didn’t retrace 62% (corrective).
  3. ES came down in three waves to a double bottom … that’s obvious.

There are more reasons, but this is a pretty persuasive list already. We need to expect a final new high. In the meantime, we are going to head to a new low.

Options for the US Dollar

Let’s look at an update of the US Dollar.

Last week, I pointed out the fact that the US dollar had completed a small 4th wave up and was ready to turn back down in a 5th wave. That’s happened … but, we’re not  done yet.

Above is the daily chart of UUP (US Dollar ETF). UUP is representative of the structure of DXY (the US index) and will provide an excellent predictor of the impending top in currency pairs and the US indices.

UUP and the US Dollar index have not reached a new low, while the EURUSD currency pair reached a new high. That’s a non-confirmation … the sign of a sick market. But it also give us a clue as to how the US Dollar bottoming process may unfold.

The waves in both directions are in threes. But since EURUSD went to a new high, a triangle there isn’t an option. However, an ending diagonal is. Both the euro and the dollar seem to be setting up for a possible ending diagonal.

It’s very early in the process, so this is speculative at the moment, but this solution seems to me to be the most probable. In that case, we have some time to go before we reach a slight new high in the US market (a new low in the the US Dollar).

The movement of the dollar strongly influences the movement of just about everything else, so it’s important to pay attention to what it’s doing on a large scale.

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Apple Rebounds (as predicted)

Above is the 2 hour chart of AAPL.

Last weekend, I showed this chart of AAPL and suggested it might be a fourth wave, certainly if it didn’t reach and exceed the previous fourth (which is always a key test of a first wave down).

During the week, it became obvious that we weren’t going to get there as the wave became obviously corrective. You can see the overlapping waves in the circle on the chart. That meant we were headed for a new high. However, this wave down is a fourth wave and the new high will be the last one.

A Change in Direction for Bonds

Above is the 8 day chart of the 20 day US treasury bond fund (TLT). If you’ve been in the Chart Show recently, you know I’ve expressed concerns about the structure of the most recent waves down from about 130.00—they appear to be corrective.

When I also look at the 10 year yield chart (below), it became obvious that we’re about to turn.

In the chart above, it looks like the ending diagonal has just completed a fourth wave down, rather than being complete. This is a much better looking configuration for an ending diagonal than what I’d originally shown.

As a result, I’ll look for a turn up here to a new high above 145. However, if we turn down from here (below 116, then we’ll keep heading down).

Above is the 8 day chart of the 10 year treasury yield (TNX). I’ve been following this for the past few weeks and have projected a turn at the 30.42 level. We’re almost there. (yield charts move in the opposite direction from bond fund charts).

Taking both these bond charts into account, it looks to me like we’re about ready for a turn down in yield and, at the same time, a turn up in the fund.

Look for a turn down in TNX, with an eventual drop to a new low.

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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).

There are also options for the US market. My analysis tells me that we're in a fourth wave with more downside before we turn up in a final fifth wave to the top. It looks to me as though this last wave will make a slight new top to the 2900 area, if we meet one of the downside targets identified.

I'm expecting the downside target to a new low, which could be a previous fourth wave area (labelling may not be correct on the wave up to the current top). There are other measured options for a bottom, but the levels shown in the chart seem the most probable.

Volume: It remains high, as expected.

Summary: We've turned down across the US indices, but this appears to be a fourth wave down with a C wave still to go. We'll look for a turn there and a final rally to a new high.

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{ 111 comments… add one }
  • Emily February 18, 2018, 5:39 pm

    excuse my ignorance, Peter T — are you saying we going to a NEWER low from THIS Feb 9, 2018 low ? on the $SPX 2532.69 — 2420 target ? or 2315.35 target….before we make newer 52wk Highs ?
    …or are you looking for the 50% retracement (2704) / 61.8% (2663.03)
    tia

    • m s February 18, 2018, 7:03 pm

      Pretty sure peter is implying we must test the lows before the final 5th wave up, if you look at the arrows I am sure this is what is meant, which would make sense as most if not all are thinking the market just propels higher.
      The majority must be wrong and should what I believe peter is implying happen, i.e. new lows below the feb 9th low the majority will become bearish calling for the “big crash” only to have the rug pulled out again as we move to new all time highs denoted by peters 5(5)
      hopefully I am correct in reading peters above chart, hope that helps.

    • Peter Temple February 19, 2018, 10:23 am

      The current wave up is corrective, and yes, I expect a new low – a C wave.

  • Pieter van Leeuwen February 18, 2018, 6:12 pm

    Yeah … I think I have the same question.

    “. In the meantime, we are going to head to a new low.”

    Not sure I follow how that happens if wave 4 is complete, as implied above.
    That lower low could fit a larger XYZ correction idea, where abc ended X.

    I agree that bucky will be dropping again soon, which should propel SPX further north before we do the lower high. But I don’t know how far to push the DXY SPX relationship either.

  • Verne Carty February 18, 2018, 8:55 pm

    He also said it would be a C wave, which implies it must exceed the wave A low, unless truncated.

  • Verne Carty February 19, 2018, 9:03 am

    The change in bond direction is very noteworthy. A lot of analysts thought the diagonal ended in September and I remember a long article by Prechter confidently asserting the end of the decades old bull market in bonds. I also remember at first being unconvinced of the ED call as price hung out around the end of the bottom trend-line longer than I thought it should. Eventually price did rapidly fall away and there was broad consensus that he had indeed seen an ED. Not very many folk are calling for an upside reversal in bonds as interest rates have been steadily rising recently with they yield curve continuing to flatten. Outflows from bond funds, especially junk bond funds have been massive of late. Of course falling longer term rates could continue with the ten year rate continuing to rise with an ultimate inversion of the yield curve, and that fits entirely well for a march higher in TLT to complete a diagonal fifth wave. As I said, not many are calling for this so if correct, you can beat the crowd getting long TLT! 🙂

  • Pieter van Leeuwen February 19, 2018, 9:33 am

    Re TLT, I have another modest leg down (after this modest upwards correction ends) first before any major reversal.
    Perhaps at TLT 115 or so, we could finish this decline. Late March, if this pattern idea holds up.

  • Liz H February 19, 2018, 11:00 am

    Last week, people basically disregarded my BTC & Aug 2015 fractal, both suggesting much lower lows but now the implied C targets means retesting last year’s August or April lows. Sigh.

  • Verne Carty February 19, 2018, 11:27 am

    Not necessarily. It simply needs to take out the wave A low of Feb 9 to fulfill the minimum re-tracement depth. In fact we already visited the area of a one less degree fourth wave so I doubt it will get much deeper than that.

  • Verne Carty February 20, 2018, 4:57 am

    If the dollar has not bottomed, then it must be tracing out a larger fourth wave of some kind. So far the closest thing I can imagine is either a triangle or possibly a regular flat, or maybe even some kind of combination. It certainly is charging higher this morning!

  • luri February 20, 2018, 5:14 am

    ES in the morning…………..with your coffee, and, as in the case of “verne”, a bowl of stewed prunes……………………. which i might add, are exceedingly high in potassium and iron…….good for you verne!!!…………….good for you………………!

    and for liz………………a nice bowl of “red wedding”…………………one trading day late.

    https://invst.ly/6p198

    • luri February 20, 2018, 5:20 am

      i fried up some DXY…………..its like crispy “bacon” without the crunch……

      next stop 95ish area…………….my projected blue lines are still in play…

      https://invst.ly/6p1gt

      with an eye on the long term…………………..https://invst.ly/6p1io

      • luri February 20, 2018, 5:24 am

        and as for bitcoin,

        chart says……………………..be wary of a sharp pullback to the trendline, with a potential retest of the lows…………………………………….. before its blast off time…..once again projected blue lines are still in play.

        https://invst.ly/6p1lj

        • luri February 20, 2018, 5:50 am

          willem’s time chart update……….

          black x = inversion…………………….https://invst.ly/6p227

      • Verne Carty February 20, 2018, 6:56 am

        Looking at your DXY second and fourth waves, I guess I could see the fourth continuing a bit longer to give better time and distance with the second wave…not that it necessarily must…that jump off the double bottom looked mighty bullish to moi…!

  • Verne Carty February 20, 2018, 6:06 am

    Prunes!!!! That the ticket! Yum!
    In the meantime I am sitting on a massive UUP bull put spread that looks to return some serious coin this a.m., and yes, also a nice helping of GDX puts for dessert! 🙂

    • luri February 20, 2018, 6:24 am

      …..bull…………….”put”……………………..spread……??? is that similar to that famous aussie favorite – vegemite spread??

      i am unfamiliar with option strategies…………although it seems you are on the profitable side of that trade…………

      i have a measured move in the DXY to 95ish level before a pullback…………….

      • luri February 20, 2018, 6:35 am

        verne,

        fractal “in play”…………? https://invst.ly/6p2xm

      • Verne Carty February 20, 2018, 6:42 am

        Uh Huh…and that ain’t no bull…!
        Hey!!!! What happened to my chives??!!! 😀

        • luri February 20, 2018, 7:04 am

          are you suggesting………….that i short stiffed you your…..”chives”……

          are you inferring that ………….”I”……………….am a “chive” stealer!!!?

          do i look “canadian” to you???…………oh come on peoples….wake up….

          canadians steal more “chives” per capita………than any where else in the world!!!!!!!!!!!!!

          • Verne Carty February 20, 2018, 9:12 am

            We always knew those Canadians were big a “chive”ers… 😉

          • Peter Temple February 20, 2018, 9:16 am

            All the chives up here are frozen. We’re not talking about it … Canadian chives matter!

  • Verne Carty February 20, 2018, 6:49 am

    I noted with great interest all the sound and fury surrounding the bulls and banksters’ attempt to decisively reclaim the 50 day on Friday. It turns out their bark was worse than their bite, as evidenced by the shooting star candlestick. I suspect they are going to get dragged, kicking and screaming back to the 200 day where it will be make or break time for that cohort…meanwhile the short vol situation continues to simmer….! 😉

  • Verne Carty February 20, 2018, 7:26 am

    Banksters running wild in the Gold futures and DXY. Massive shorting of the dollar and buying of Gold futures. What exactly are they up to hmmmnnnn??

  • Willem Westerhoff February 20, 2018, 8:48 am

    Hi Luri, Thanks for all the support. I am not used to the picture you are showing. But if you want to customy the dates see http://prognoseus500.simplesite.com/

    My indicators don’t give a very low today or this week. So we can see perhaps 6980 and thats it. At the end of this day/tomorrow morning we wil get a really up til Friday close. That can be the top for a decline with the LOW on 9 or 12-14 march. But the red line must confirm it.

    • Willem Westerhoff February 20, 2018, 8:52 am

      sorry 6980 must be 2680

    • luri February 20, 2018, 2:12 pm

      ok willem,
      i will take a look.

  • Verne Carty February 20, 2018, 8:54 am

    Whatever entity attempting to short the dollar this morning is having its face methodically ripped off as we speak. UUP opened with a gap higher…talk about giving the old middle finger…!!!!

  • John February 20, 2018, 12:06 pm

    21 Feb at the latest we wll make a lower high,after that down into Feb 27/28.

  • Verne Carty February 20, 2018, 2:37 pm

    Not likely it would appear!
    Shooting star from Friday confirmed with red candle today.
    Certainly nothing resembling short term capitulation in VIX
    This is one of the reasons I always ask folk “WHY?!”, and get more than amused when people throw out predictions with absolutely no reasoning behind the claims. Not good! 🙂

  • Liz H February 20, 2018, 3:22 pm

    I understand why John said 2/27 so I don’t need to ask why.

    • Verne Carty February 20, 2018, 4:24 pm

      Good for you. I am just not that smart! 🙂

    • luri February 21, 2018, 6:13 am

      liz……………….”WHY”……………………. !

      why did john say 2/27th?? does it have anything to do with “jenny craig” and the color red???? if yes, nod only once………………..if no……..then pleeaaaaazzze tell me!

  • Ed February 21, 2018, 6:30 am

    Joe,

    Not sure you will be able to read this…I know you are in Hawaii. I am wondering if you still believe we are “on track” to what you believe is happening. You shared a “chart” which was a composite of 5-6 or more stock indices. Everything from the Dow Indusrials to the $SOX rolled into a single “Joe Index”. It pretty much “nailed” the Top in late January.

    Did the “Joe Index” have 5 waves down? You mentioned in your post of February 14
    That we were perhaps in a 3 wave rally or the A wave of an ABC and you felt the A wave would end between 54.5% to 61.8% retrace of the decline off the peak. That “happened”…at least so far.

    Also, you mentioned that February 16th was an important date. The market reached the 54.5-61.8% retrace you felt would happen on February 16th.

    Big question is…How do you see the Full Moon of early Marcn followed by
    March 17-21 (your focus) fit into the ABC rally? I believe you mentioned that March 17th (something to do with Mars-Uranus) could be Swing High. Would you still be looking for that 20% downside risk from this mid-March high into April 4th?

    Not looking for trading or investment advice. Your work accompanied with
    Peter T’s EW analysis is quite extraordinary. I hope you have time to respond.

  • luri February 21, 2018, 9:41 am
  • Verne Carty February 21, 2018, 9:53 am

    Looks to me like the bulls insisted on a re-match over the 50 day dust-up…I guess the first A– Kicking was not sufficiently punitive so the came back for one more…! 🙂

    • luri February 21, 2018, 10:20 am

      verne,

      when Lucifer “run stops” to the upside, usually is a set up to drop prices……..as well, when Lucifer “run stops” to the downside, usually is a set up to pump prices…..

      focus will be on FOMC minutes release,,,which – because of the stop runs to the upside, indicate that the minutes will be “hawkish”/inflationary……… we shall see

  • John February 21, 2018, 9:58 am

    Today the market should make a turn downwards, I use all kind of indicators.
    The most important are astrology and the tides so we will wait and see what will happen.

    Goodluck to all.

    • luri February 21, 2018, 10:14 am

      i will be watching for that reversal john…….

      • luri February 21, 2018, 10:27 am

        i adjusted the blue “A” and “B” downwards…………….to reflect …….john’s reversal…………………..

        i shall call this chart…………………………john’s reversal chart

        https://invst.ly/6poij

  • Verne Carty February 21, 2018, 10:50 am

    Three successive days of gaps higher in UUP…my it’s frisky!!

    • luri February 21, 2018, 12:56 pm

      holy …..wC……topping tails …….batman!!!

      take a look at that tail!!…………….https://invst.ly/6pqvq

      and the DXY seems to have upward potentials to 95 price target before a pullback!

  • Liz H February 21, 2018, 1:20 pm

    I spy the 2 horns I was looking for on the /ES, 2/16 & 2/21 HOD. May the BTC downward fractal commence presuming you’re on the bearish camp. https://worldcyclesinstitute.com/the-big-top-fake-out/#comment-28024

    • luri February 21, 2018, 1:31 pm

      liz……

      i am “late” to the party…………………………….and well, ok…….we are both wearing the same DRESS!!!………………………..and then i woke up!! ….ahhhhhhHHHH! complete nightmare….

      I got “zoinked” by going to your charts you posted…….what i understand is that the ES is following the bitcoin…………with a lag time…………………….. so are you expecting a 70% drop in equities to follow in line with the bit coin??

      remember i posted yesterday…………that the potential is there for a pullback for bitcoin to the trendline……….and to retest the lows………………

      would the second horn be the B wave on my [cough]……………amazing……..and somewhat “tasty” chart? https://invst.ly/6prde

      • Liz H February 21, 2018, 1:39 pm

        btc Sun, 12/17/17 == /es Fri, 01/26/18
        btc Sat, 01/06/18 == /es Fri, 02/16/18
        But I look at the the 4-hr & 1-hr charts to see if fractal is still working.

      • luri February 21, 2018, 1:45 pm

        liz…………..it seems your thesis has a great deal of accuracy.

        for you, i have overlayed the ES onto the bitcoin chart……….and “voila”……..

        for the public record, i am forever calling this the LIZ overlay!!! https://invst.ly/6pril

        • luri February 21, 2018, 1:47 pm

          the purple line is the ES overlay……..and i was pointing out the second “horn”…………………on the bitcoin, as well as the ES………

          • Liz H February 21, 2018, 2:16 pm

            I love your chart Luri. Your devilish horn on the daily works too but the 2 horns I was talking about was on the 1 hr btc chart Jan. 5 & 6 HOD.

          • luri February 21, 2018, 3:13 pm

            yeah,

            sorry about that liz……….that double horn [expanded flat??] pattern was smoothed out on the ES………..due to scaling issues……..

            the horns aside…………..the correlation of the two is remarkable…..

            the bitcoin drop 12%ish on the first drop……the had two horns…..
            the es dropped 12%ish on the first drop……..and the two horns

            the bitcoin then drops 70% to the lows…………….
            the ES will be expected to drop 70% ???????????????????????????

          • Verne Carty February 21, 2018, 3:21 pm

            If a third wave, why not?
            It is clear to me that the sheeple do not understand the full implications of a VIX 20 handle with equities at these redolent levels. Reminds me of Wile-E- Coyote over the edge of the cliff…legs furiously churning and…well, you know…. 🙂

        • Red Dog February 21, 2018, 4:04 pm

          Very cool chart Luri

  • John February 21, 2018, 2:43 pm

    So we saw the second top, now it becomes interesting, we have a change in the tides on feb 24 but the astropoint from today has a turn on Feb 27.

  • John February 21, 2018, 2:55 pm

    So Liz,

    You look at the fractal in the analogy SP/Bitcoin , you do not count the days because they are not the same?

    • Liz H February 21, 2018, 3:24 pm

      John,
      Like with others, e.g., TSLA, FB, IYT, I can’t rely on day counting alone for estimated swing highs and lows.
      BTC trades 24×7 even on holidays (I think) hence I rely on the charts.

      Feb. 2 was not a good day to be long the indices. 2/2/2+0+1+8 –> 2/2/11
      Tomorrow is Feb. 22. Wondering if triple 2s will cause the ice floor to crack?

      • John February 21, 2018, 4:00 pm

        Thanks Liz,

        Nice when it works out this way, tomorrow is also Andre’s low point.
        I hope we will see him back on this blog.

      • John February 22, 2018, 4:24 am

        How nice you are very intuitive with numbers,,,,
        I think we will see a pulback after that up again till… March 7..

        goodluck.

  • luri February 21, 2018, 3:29 pm

    DXY update – https://invst.ly/6ps-a

  • luri February 21, 2018, 4:47 pm

    dax here…………………………………..get yer DAX heeeerrrrreee!

    do you want a shnitzel mit that DAX ……gender neutral “sir”………..?

    https://invst.ly/6pt-b

    • Verne Carty February 21, 2018, 4:57 pm

      Mama Mia!! DAX’s a SPICY meat-a-ball!!! 🙂

    • Liz H February 21, 2018, 7:05 pm

      Luri, may the easter bunny protect the ducks. If anything needs to be annihilated or rather de-fanged, it would be the bloated fannt- fb, amzn, nflx, nvda, tsla. https://tenor.com/view/annihilation-gifs-fear-beast-trembling-gif-10550604

      • luri February 22, 2018, 6:28 am

        liz,

        by …………..”duck”…………i am most certain you are speaking of ……”canard à la rouennaise”…………………and by……………”bunny”……………….it can ONLY mean the german…………………..”hasenpfeffer”………………………..

        sounds “delish”………………………although………………your gender neutral personal assistant DID tell you i was……………………………………………….vegan…………………..non???

        …….and with that……………i give you the morning ES………..for the public record this chart is using the heiken ashi candles in the 60 minute time frame..

        https://invst.ly/6q1dx

        • luri February 22, 2018, 6:36 am

          oh yes……

          and the ………….”LIZ OVERLAY” chart…………….i tried a close up at the 5 hour time frame………………………………the best i could do without losing the scale…

          recall, the purple line is the ES…………and the scaling is in %’s……..

          https://invst.ly/6q1k2

  • luri February 22, 2018, 7:52 am

    sinabung —eruption!!!

    electrical equilibrium…………………………means…………………… bullets and beans baby!

    close up of ES…………………..and a price dislocation warning initiated.

    https://invst.ly/6q2yt

  • luri February 22, 2018, 10:03 am

    hmmmm…..

    a different look at the ES………………….”c wave?”
    https://invst.ly/6q5mh

    • luri February 22, 2018, 11:14 am

      or a triangle??

      https://invst.ly/6q72n

      • Liz H February 22, 2018, 11:47 am

        Sellers seen at /es retrace to Feb. 20’s VPOC and incidentally also 61.8% retrace from yesterday’s fomc high and after-hours low.
        Hmmm, I see your 2666 Luri. So far no red wedding yet. We only got hors d’oeuvre from yesterday’s soiree.
        The confluence of the SMAs is really fascinating to me. The 20, 50 and 200 plus the rounding top from Feb 9 low looks so similar to the 7/9/15 low w/ the 20 & 50 sma kissing each other.
        Difficult to get long because of the potential downside risk.

        • luri February 22, 2018, 12:00 pm

          liz,

          i am heavily leaning toward the triangle formation…….

          as above you can see the first wave B is a triangle that occurs at a zone of wave 4’s that occurred on the upside……[the two close orange lines running through the yellow circle……………

          this wave B is of degree size larger, but is also playing out between a zone of wave 4’s that occurred on the upside………[the two red lines with price labels]……………………………. this is fractal behaviour.

          i am expecting the E wave to fall very short……..

          https://invst.ly/6q7pz

  • John February 23, 2018, 5:49 am

    My dates are:
    A low on Feb 26/27,( today same patern like yesterday down ,up, and later down again break the 2700 floor?.
    After that up again till March 7.
    So March 7 will be important a serious brake to the down side?

  • Willem Westerhoff February 23, 2018, 6:36 am

    O.K. today the last HIGH and then we go down till the end of 28 feb.
    1 Feb is big up so be prepared. http://prognoseus500.simplesite.com/
    After that is a big decline But wait until the red line confirms it.
    Astrology gives the 9th of march as turning point to go to the same as the beginning of the year but not for long. So we must go up after the 9 march with big numbers. Other indicators also gives 9 of march or 12 march as turn higher.

    • rotrot February 23, 2018, 6:53 am

      March 9-12 could well be a high of some significance…

  • Verne Carty February 23, 2018, 7:15 am

    My near term indicator is far more simple, althoughI hav to say I am amazed at those of you who can glean useful market information from external sources. For me, below 50 day is near term bearish, above, bullish. It will be interesting to see how the various predictions play out.

    • luri February 23, 2018, 8:10 am

      whooooaaaaa…..there verne…………………..dem is “fightin” words…….!

      if you make it too- too ……….simple…………..then what are the “complicates” supposed to do for a living……….- huh……………..”what??”

      ……………and the sun rises…………………………

      • luri February 23, 2018, 8:43 am

        ES…………..https://invst.ly/6qlxi

        • Liz H February 23, 2018, 8:58 am

          I like your FIPLuri. Let’s see how long the charade lasts. Perhaps 11:11 then slip down the ice again?

          • luri February 23, 2018, 9:20 am

            liz……………..

            do you “really” like my FIP??……………….thanks…….it was hand sewn, in silk………by the creative house of “Dianne Von Furstenberg” ………….cool huh! :-))

          • Liz H February 23, 2018, 9:30 am

            Oh. I thought the house of Van Gogh. 😛
            I didn’t know Potus will have a televised speech. Markets may stay green until he finishes. Needs it to stay green as a big, beautiful background for his “Highest Stock Market EVER” speech.

          • Liz H February 23, 2018, 2:03 pm

            Big, beautiful rally!

      • Verne Carty February 23, 2018, 10:36 am

        No offence dear luri. I was not being at all sarcastic, but sincere. Take for example Tom’s energy charts, I think he is batting above 50%…

        • luri February 23, 2018, 10:54 am

          VERNE…..

          i know………………………..!

          and because…………and only because……… you are correct…………….!

  • luri February 23, 2018, 3:14 pm
  • Verne Carty February 23, 2018, 5:16 pm

    l have some reservations about an unfolding flat since what would have been the b wave failed to retrace at least 90% of the a wave. Could we be looking at a large zig zag instead with a c wave up now unfolding? Lots of bulls are absolute giddy convinced that today’s strong move up must be a third of a new impulse up to new all time highs, but I think it could be a c wave ahead of new lows next week in a larger c wave down.

  • Verne Carty February 23, 2018, 5:25 pm

    Elliottwave trader has a possible c of b up underway so I guess it could still retrace 90% of what would be an a wave down and still qualify as a flat with a final c down. My problem is I have been counting the move down off the highs as a five….maybe it is a three?

    • Peter Temple February 23, 2018, 8:25 pm

      I cannot find anything motive here. The move down is a three. No question about that. Just look at ES, which has a double bottom, which makes it a three. More in the update tomorrow.

  • John February 24, 2018, 4:29 am

    We did not turn down yesterday, so I have got a different prediction on the market:

    Down strongly from Monday/Tuesday into March 7/8.

    The tides turn today into March 1 and after that March 10.

    Nice weekend.

    Nice weekend

    • Verne Carty February 24, 2018, 10:04 am

      I think Peter T is correct that we are seeing a big flat unfolding. That would mean we are completing a c upwards of a larger b wave which has to go to 2838.85 to retrace 90% of the A wave down. An expanded can actually exceed the A wave all time high and you can imagine how many accounts are going to get blown up by the brutal C wave down if that happens.
      Bottom line? EW analysis suggests we should expect HIGHER prices on Monday. Thanks Peter T. 🙂

      • luri February 24, 2018, 12:16 pm

        cough……………………………ahem………………………………cough…….

        ES………………..you know this chart well………………….did you miss what it was telling you??

        https://invst.ly/6qx96

        • luri February 24, 2018, 12:48 pm

          and for your viewing…….here is a close up count of wC of wave C [the last few days of price action]………………..and there is a potential count that it says all is complete…………https://invst.ly/6qxdu

          so there is also a potential that we head down come monday.

          • Verne Carty February 24, 2018, 1:25 pm

            Yep. The thrust up out of the triangle was classic and expected. What changed my mind about it being complete is that those kinds of thrusts are almost always immediately reversed intra-day, and when that did not happen during Friday’s session, my conclusion was that we were headed higher. That was in my mind confirmed by the idea of a larger B wave unfolding upward. If it is a flat, it has to move higher.

          • luri February 24, 2018, 1:59 pm

            all shall be revealed in time herr verne………………….

            it is unnecessary for this wave to move higher…………………. we have the flat…………………..https://invst.ly/6qxre
            ………………………………now if you are talking about anticipating an “expanded” flat……….then “yes”……………higher prices will result….

            for me, the potential price action is greater to the downside as a flat has already played out here……………..we shall “agree” to disagree….
            on direction.

            the market will show us the way…………………….

          • Verne Carty February 24, 2018, 6:38 pm

            I can count a clear impulse down in DJI, SPX, and DAX. The same is NOT the case for ES and I accept Peter T’s contention that it is a three. A waves can be three or fives depending on whether we have a flat or zig zag unfolding. If we see the decline from the Jan 26 to Feb 9 as a three wave structure, I would think a flat of some kind is unfolding, and that the current upward correction is a b wave of the flat. EW rules require it to retrace at least 90% of the A wave for a regular flat, and it can exceed the A wave making a new all time high if it is an expanded flat. A five wave count could still be a developing zig zag and the b wave would not be required (and could not exceed the A ) 90% of the A wave.
            I don’t want anyone to take this personally but you can always tell real traders from the rest of the crowd by the way they comment about the market.Real traders don’t blather. They give sound reasons for why they expect the market to do what they state they think it will.
            The reason is simple – they have money riding on it. If you don’t, clearly you are free to throw anything at all out there as it does not matter a whit if you are right or if you are wrong. I truly appreciate those of you who post charts that clearly show how, and why you think the market is trending in the way you opine, as well as other explanation to bolster your point of view. I will admit that while my bias based on my own count and other technicals is higher next week, I cannot be certain. I have open bear call spreads and straddles until a more confident directional trade can be made. Have a great week-end everyone!

  • luri February 24, 2018, 8:17 am

    yes………….that’s correct……………………i have a secret “fetish”……………..

    shall i blush…………………….or would you prefer i share my “fetish” with you??

    think……………………………”wilshire”………………………………..

    https://invst.ly/6qvsm

    • Verne Carty February 24, 2018, 8:38 am

      Ooooh….please, doobie doobie do…! 🙂

      • luri February 24, 2018, 12:10 pm

        i deserve that!……………..:-))

        funny though……….if you look at the first blue “a”, off from the 2009 lows…..

        that “a” – counts as a 3!!!………….there is no way if can actually be a 5 count!

        and yet i labelled the first “a” with a 5 count…………………knowing………….it is a series of 3 wave sequences…………………….which is exactly my point…….

        the market continued to “correct” upwards………………..and never looked back!

        that is why i am ………………………..”grande”…………and ……..”OK” with the first move off the top being a 3 count………

        since 2000 we have been in a state of correction……..and during corrections there is NO rule to say any wave MUST be 5 waves……… A’s and B’s and C’s can all be 3 waves………..3, 3, and 3 for A/B/C or 5,3, and 5 for A/B/C makes no difference………….

        cycle size seems to be throwing all off……………

        2000 – 2009 we produced a “flat” in some indexes, and an “expanded” flat in others………………….

        2009 – 2018 we produced a super ginormous big fat zig/zag upward

        2018 – ?? i am predicting another super ginormous big fat sharp zig/zag downard.

        • Verne Carty February 24, 2018, 6:41 pm

          I am rooting for ya! 🙂

          • luri February 25, 2018, 11:11 am

            no rooting necessary…………check your email kind sir……?

  • Emily February 24, 2018, 7:05 pm

    I know all of you do EW — whereas moi — I just follow $SPLV for $SPX D.A.I.L.Y direction — if weak/strong — so will $SPX follow.
    also do my Daily DeMark levels on SPX SPLV VIX and other stocks I follow/have thoughts of playing. gives me a quick glance to see if anything’s out of sync. know its not technical to most of you — but this I’ve found to keep me alert & out of trouble.

    I don’t have the news on — know most follow news and think that news trumps all — I don’t buy it. can have great news and stocks/markets go south — so I no longer listen to news or follow any financial twitter accounts. use the “Twitter Search” – to see the general chatter — “fave” some tweets to go back eod to see what they see. am ALWAYS open-minded — but don’t want to be influenced by anyone.

    well.. on Friday I watched FIRST my usual SPLV to see if weak/strong & then looked at SPX and DAX, BTC and Oil …knew my DeMark levels and saw SPLV was > R1 whereas SPX was not & was retracing & just trading in a range– but I saw how strong it was & tweeted about it. anyhow — to make a long story short — this is what I look at.
    oh yea.. on Wednesday — $TRIN closed > 1.60 — over 2.00 — which to me indicates a RALLY next day/2

    • Verne Carty February 24, 2018, 8:37 pm

      The price action on Friday was clearly coiling for a break and I had SPY 273 calls in anticipation. I cashed out quite a bit early as I was anticipating a sharp reversal of the thrust out of the triangle that never came as prive just kept powering higher to print a bullish engulging candle. Low volume can no longer be relied upon to diminish the odds of a move continuing higher..it has not for years now…

      • Emily February 25, 2018, 9:30 am

        Verne — maybe you were one of the few that saw that in SPX / SPY — but majority were not. I watched the chatter & all the so-called gurus & divas were not that bright — but of course after the fact they all came out w/their Picasso charts — that they saw it coming…cause of this level & that level or cause of what the Fed doing/not doing, debt/no debt, inflation/deflation .. rate hike/no rate hike, etc etc
        on Wednesday — majority were expecting a flush in the following days — to the 2650 area based on ES_F ..but I saw $TRIN closing > 1.60 @ the 2.00 area & tweeted that based on this a rally next day/2 & yes — my 2 “concerns” that day was the action of $VVIX and $SPLV — I don’t follow much $VIX — but tweet its daily DeMark levels since others are hooked on it.

        • Verne Carty February 25, 2018, 11:51 am

          Yep. Triangle formations are one if my bread and butter trading patterns and that coil was unmistakable. The guideline regarding the directional break is so simple it is strange so many traders completely miss it. I was certain a big spike up was coming. I was wrong thinking it would reverse swiftly. In hindsight it now looks like a bull flag. With all due respect to all those who reference external indicators to detrmine the market’s direction, everything I see intrinsic to market signals is telling me the immediate direction is up, and I trade what I see in the market, not anywhere else.

          • Emily February 25, 2018, 12:19 pm

            Verne ? am NOT knocking you personally — just saying what I’m seeing on the net/twitter. everyone has their own methods. mine so far has proven correctly.. $SPLV–mind you not the 1st 2 days of the year — but otherwise am sticking to what has been working for me for past 3 years — and I ONLY do it for the DAILY movements — NOT predicting long term. ok!

            if anyone knew what’s around the corner — we’d all be trillionaires & not on the net 🙂 😉

          • Verne Carty February 25, 2018, 12:32 pm

            I did not think you were, no worries! 🙂

  • Ed February 24, 2018, 7:57 pm

    Luri,

    I am rooting for you too!

  • Ed February 24, 2018, 9:34 pm

    Peter G,

    I was looking at the daily A/D line. In particular the interplay of the A/D line with the 40 day simple moving average. The A/D line crossed below the 40 day average and is now testing that moving average from beneath. That has been important on a few occasions in the past.

    I believe you posted that the A/D line “failed” to confirm the new highs made on January 26th. If that is the case and I could be wrong…Does the A/D tell you anything? To me it is looking divergent.

    In your mind does that small divergence that “I see” qualify as an “Important
    Divergence”? I guess only time will tell.

    • Peter G February 25, 2018, 2:45 pm

      Hi Ed,
      The divergence we saw at the late January high was there but very small. Most indexes saw their closing highs on Jan 26 whereas the daily a-d saw its high on Jan 23. I think I said at the time that it was a very minor divergence, not what we would look for at a major top, but I also noted there had been major tops in the past, either with no a-d divergence or with very minor divergences. 1968 is the first to come to mind. So the best the a-d line can do for us historically is say it is possible that was the final high, but based on long a-d history it is not probable. As to the 40 d MA, the a-d line moved above it on Friday, but an immediate reversal back below would be what you want to see if you’re bearish. There are currently no MAs from short (4d) to longer (200d) that are above the a-d, or more descriptively, the a-d line is now above all MAs.

  • Verne Carty February 25, 2018, 12:02 pm

    BTW, I want to say I really appreciate posters who know what they are talking about. So much of what people throw out today is nothing but hogwash, and useless information as they have never successfully applied whatever it is they are presenting. At the risk of appearing self-serving, here is something I posted with a date-time stamp on another forum in response to a poster who voiced confusion about what was going on in the market. Granted it was only my opinion, it was based on how I had seen price action unfold in the past.

    “Verne February 22, 2018 at 7:39 pm
    No need to be confused. The counts Lara has provided are all valid and one of them will be shortly proven correct by subsequent market movement. Some of the most explosive moves you will see can and do come after what appears to be a period of indecision. I suspect the current coiling action is storing energy for just such a move.”

  • Peter Temple February 25, 2018, 1:02 pm

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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