World Cycles Institute

The Last Waltz

The End of a B Wave Era

The Last Waltz was a concert held on November,1976 in San Francisco that resulted in a movie by the same name, produced by Martin Scorsese, released in 1978.

It was the Band’s final concert and marked the end of an era – the Golden Age of music of the ’60s and ’70s. It was at the bottom of a fourth wave (the bullish third wave had topped in the early 70s (the top spike in the solar maximum of the time (1969) coincided with the original Woodstock Festival which I attended in August of that year.

The picture shows the group at their height: Richard Manuel, Garth Hudson, Levon Helm, Robbie Robertson and Rick Danko. The Band was a Canadian-American group and came together under Ronnie Hawkins in Toronto Ontario, in the late ’50/early 60s. I saw Hawkins live, but it was not until the early 70s, well after the Band had left him and were extremely popular on their own.

We’re in another third/fourth wave combination right now. The NYSE is in a fourth wave, while the SP500 is at the top of the third wave — a major non-confirmation that’s a very bearish situation. The Last Waltz reference to the current market is the fact that we’re in the final wave of this 5 month long B wave.

This week, I made no bones about the fact that the waves down mid-week were corrective. I had been expecting a turn, but once we got it, NQ had still not made it to a new high. If you were in the Chart Show on Wednesday, you got the entire lowdown.

So … while the waves down looked corrective, NQ sealed the deal, because the structure there was definitely corrective.

We’re still waiting for a top and while this is the final wave up (it’s a small 5th wave in the SP500), the waves up are all corrective. As well, the corrective structure of the pattern in ES requires a zigzag, so we may not get a new high and turn right way.

I called for a turn late Friday (which we got) and a continuation down over the entirety of next week. I’m also expecting a wave down, very much as depicted here, but was hoping for an earlier resolution to the upside. In either case, this is a good indication of what to expect (it’s the timing I’m not sure of). The wave down depicted here is clearly corrective, as it the final one to the top.

The market is moving as one. DAX has retraced 62% and is sitting, waiting for a turn.

Gold and silver are turning up — not sure how they will correlate with the expected high in the US indices.

WTI Oil looks to be in a corrective wave down and if so, would require a new high. If this is the case, it would likely take more than a day or two to get there.

Currency pairs (including the dollar) are in a corrective retrace.

It’s the Last Waltz for the B wave in the US indices, folks. I’m expecting a fabulous short opportunity within a week or so at the outside..

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US Market Snapshot (based on end-of-week wave structure)

This chart is posted to provide a prediction of future market direction. DO NOT trade based upon the information presented here (certainly NOT from a daily chart).

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

We've been sitting at the top now for about a month. As my Trader's Gold folks know,  we've been in an expanding triangle for three weeks (this is an ending pattern).

If you were in Wednesday's Chart Show, you know that I called the weakness on Wednesday a corrective wave, which requires another high. Almost all the other assets I cover on a daily basis are hovering near inflection points.

We're at a new high for ES and this technically keeps us at the top of the third wave; however, NYSE is in a fourth wave, so this is a major non-confirmation and is extremely bearish.

As I've been saying over and over like a broken record, all major asset classes are moving as one. That requires them all to reach new B wave highs before they can turn down together. It's been like herding cats and has taken much longer than expected.

IWM (Russell 2000) reached the new high that I have been calling for and sits this weekend at the top of the expanding triangle I identified weeks ago. All these indices are showing signs of exhaustion, with gaps that are being left unfilled.

The next major move is to the downside.

The wave up from Dec. 26 is clearly corrective and, as a result, must fully retrace to the downside. This is supported by the US Dollar Index, the major USD currency pairs, WTI Oil, along with DAX, TSX, and other international exchanges.

Summary: My preference is for a dramatic drop in a 4th wave to a new low. The culmination of this drop should mark the bottom of a large fourth wave in progress in the NYSE since January 29, 2018 - over a full year of Hell. It may be a dramatic drop that is quite fast; in any case, it will target the previous fourth wave area somewhere under 2100.

Once we've completed the fourth wave down, we'll have a long climb to a final new high in a fifth wave.

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{ 218 comments… add one }
  • Joe Longwill May 8, 2019, 10:40 am

    Just keeping my notes together
    No comment Block 4
    25711.35
    25415.10 <——– ( another pivot and my initial downside calculation 25412 )
    24906.07 < ——- ( an extreme and I'd go long if timing lines up ) big if ..

  • Tom C. May 8, 2019, 10:45 am

    May 8th energy chart update
    so far so good
    https://ibb.co/VNxRc3X

  • mojo May 8, 2019, 11:41 am

    Probably looking too short term (and I hate feels/seems), but this narrow range around DOW up 83 pts “feels” like a hinge point. Fed the dog a couple times today, but may cash the last one and sit.

  • Marie Slattery May 8, 2019, 12:05 pm

    imo..lookn corrective supporting bearish count..

    • mojo May 8, 2019, 12:10 pm

      Same here, but decided to drop another quarter in my pocket and watch 🙂

      • mojo May 8, 2019, 12:12 pm

        VXX pushing upper B bands, QQQ pushing lower, but no conviction…

        • mojo May 8, 2019, 12:42 pm

          VIX 19 acting like VIX 15 has over last year…

  • Verne Carty May 8, 2019, 1:41 pm

    Did anyone on the forum get a piece of the UBER IPO?
    If you did, are you planning on selling tomorrow? 😀

    • Jack Carter May 9, 2019, 9:56 am

      Yes, looking for a 25% pop or out by 12:30.

  • Verne Carty May 8, 2019, 1:47 pm

    Volatility instruments consolidating recent gains. I am expecting another attempt to smash it lower…I sure hope they try! 🙂

  • Verne Carty May 8, 2019, 1:51 pm

    Upside corrective wedge busted with bearish engulfing candle….you mean to tell me they can’t wait until Friday??!! Hehe!

  • Joe Longwill May 8, 2019, 8:52 pm

    Block 1 targets
    25855.15 < ——–it's been tested
    25555.07 <—–next spot to keep an eye on ( may become a pivot )
    25039.47 < —– not sure we see this level.
    One leg at a time and each block works together

  • Joe Longwill May 8, 2019, 8:53 pm

    Just keeping my notes together
    No comment Block 4
    25711.35
    25415.10 <——– ( another pivot and my initial downside calculation 25412 )
    24906.07 < ——- ( an extreme and I'd go long if timing lines up ) big if ..

  • Joe Longwill May 8, 2019, 8:55 pm

    Averages of blocks 1-4
    25759.26 ——- a minimum
    25457.73———— becomes a pivot
    24939.65 —-:is an extreme .
    May 22- June 3 is when these levels will matter to me .
    If price levels get hit prior to time cycles then I’ll lighten up
    And look lower .

  • Joe Longwill May 8, 2019, 9:00 pm

    25855-25759-25711 averaged ( minimum )
    25555-25415-25412-25457 averaged ( becomes a pivot )
    25039-24906-24939 averaged ( extreme )
    Intend to cover 1/3 of hedges .
    Looking to use the averages .
    Cover below the minimum .
    Just organizing my thoughts .

  • Joe Longwill May 8, 2019, 9:08 pm

    25791 = the minimum ( think that’s been hit ) added the 25840 pivot so average of 4 price levels
    25459= pivot
    24961= extreme ( keep in mind these are averages )
    Ideally 25459 should be hit and if so I’ll cover 2/3
    Need to see a new print low for this decline .
    1/3 cover at or below 25711 , still have more time left
    Yet hedges have become profitable and intent was to hedge only .

  • Verne Carty May 9, 2019, 6:31 am

    I will be ringing the register on long vol and short positions at the open as we put in some possible kind of interim bottom in the a.m. We know the charlatans in Washington are going to magically resolve the trade dispute and the clueless herd is going to go on a frenzied buying spree, as if any such announcement really changes anything.

    • Vivek Sahay May 9, 2019, 7:28 am

      They are going to start talking on Friday – so the earliest possible deal announcement time would be monday. Monday opens with a 40 point gap higher on SPX ! I will be reducing my shorts between 2840 and 2855 (right around here). Dicey to take a big position into the weekend

  • Verne Carty May 9, 2019, 7:20 am

    I was expecting support at 2860 but we broke it in ES.
    Next possible reversal signal is VIX tag of upside target at 25.00

  • mojo May 9, 2019, 8:24 am

    Sold my VOL pre-market for quick 4% from yesterday afternoon purchased… could have been 8% if held while traveling. Oh well, thinking similar to Verne and Vivek on poise over next few days.

  • Vivek Sahay May 9, 2019, 8:29 am

    They just paid me 1.4 for the June 260 240 put spreads that I had been buying for 0.6 to 1.1. I am down to the last 25% of my shorts. We are at the moment of truth. Close to Joe’s pivot point !

  • mojo May 9, 2019, 8:29 am

    I don’t trade around 50 day moving monkey, but RUT, SPX and IXIC join DJI under 50dma today. That should cause institutions and machines to shake.

  • Bill rider May 9, 2019, 8:31 am

    Tom C,

    How is your energy chart looking from here on

    • Tom C. May 9, 2019, 10:42 am

      Hi Bill
      it’s been a busy day at work
      could only post @ lunch
      May 9th energy chart
      https://ibb.co/g4XYqsb

      • p. May 9, 2019, 11:21 am

        Thanks Tom! Looking forward to your view later on the SPX near term, especially 5/13 Monday. How do you interpret the blue line ramp over the weekend?

      • Bill rider May 9, 2019, 6:49 pm

        thanks Tom.

  • Vivek Sahay May 9, 2019, 12:24 pm

    Peter T –

    Great Chart Show yesterday. Your forecast got me to monetize a good chunk of my shorts at 2840 (close to the level you had for a low) !! Thank You.

  • Marie Slattery May 9, 2019, 1:45 pm

    anyones thoughts for tomorrow?!

    • mojo May 9, 2019, 2:45 pm

      Rode things (successfully, thank goodness) both ways (VXX, QLD, TVIX, TVIX), and went home flat until we see what 12:01am does to us. I haven’t day traded like that in a while (3 big wins, 1 small loss), but with VOL back up, it’s easier to day and/or swing trade good size, then greatly reduce or go flat. It felt like VIX 19 is the new VIX 15, but time and change must be addressed. This thing can go anywhere tomorrow into weekend, so I got small and will let the counts show themselves. Sorry to ramble Marie; don’t know if that’s helpful. Best to you and your positions 🙂

      • mojo May 9, 2019, 2:47 pm

        Notice VIX hit the bell at 19.10 HaHa!

  • Marie Slattery May 9, 2019, 1:56 pm

    left with a five wave up and an abc..down..i feel like there is someone at the control switches sometimes…

    • Verne Carty May 9, 2019, 4:03 pm

      I think the next key event is price reaction to the 2910-2920 former support/resistance shelf. I think it is safe to assume some jawboning regarding the trade deal the next day or two and I seriously doubt the Chinese delegation traveled all this distance to go back home empty-handed to odds are we see some kind of bounce, how substantial remains to be seen. There has been significant technical damage and I for one will be looking for opportunities on the short side the next few trading sessions. Have a great evening all!

  • Marie Slattery May 9, 2019, 5:44 pm

    .. was hard not to buy back in at vix at 19 today…but decided was a good week and better to watch and see..

    • Verne Carty May 10, 2019, 3:24 am

      It came down off the highs in an impulsive five… ☺

  • Tom C. May 9, 2019, 5:59 pm
    • p. May 9, 2019, 6:41 pm

      Thanks!

    • John May 10, 2019, 6:08 am

      Thanks Tom, with the ramp up in the weekend it is hard to decide to hold or sell my shorts for the weekend?

  • Vivek Sahay May 10, 2019, 5:09 am

    Tariff news has come and gone. I can count the decline as a triple zig-zag. In that case another move to 2820 would make sense. It could also be a double zigzag, in which case, we need to see a nasty leg up sometime next week. I am not sure of which one plays out. Staying at 25% short. Will cover that in case we see 2820. Will go back to 100% short if we get the last rip higher.

  • John May 10, 2019, 6:39 am

    This is an interesting piece on Zero Hedge, I m a follower of Dr gabor Mate, I guess he is familiar by you Peter?

    https://www.zerohedge.com/news/2019-05-09/america-denial-dr-gabor-mate-psychology-russiagate

    • Peter Temple May 10, 2019, 6:51 am

      John,
      Yeah, really good article. Read it last night. Didn’t know of Maté before now. Definitely worth a read.

      • John May 10, 2019, 7:18 am

        I respect him a lot because of his knowledge of human psychology.
        The fact that the human mind is so conditioned and very often traumatized but not recognized ,Trump is indeed a good example how this can manifest in this world. Maté’s youtube site is very insightful.

  • Marie Slattery May 10, 2019, 7:46 am

    yes…verne..on vxx.. we should get an abc back up..possible quick trade.but .I am going to hold and see what plays out for the count until monday…have a great weekend ..everyone..thank you for the energy chart Tom!

  • Marie Slattery May 10, 2019, 7:49 am

    On VXX..meaning ABC once impulse is done..don’t want to confuse anyone not necessarily today

  • Marie Slattery May 10, 2019, 7:53 am

    I usually buy 1000 shares for each pop I see..even if I can get a buck still a thousand..:)

    • Verne Carty May 10, 2019, 8:04 am

      You are a heavy hitter Marie. I tend to trade the optionable instruments so I don’t have to commit so much capital.
      Of course with that size position you don’t need too much movement to profitably ring the register! ☺

  • Marie Slattery May 10, 2019, 8:25 am

    Exactly ;)…

  • Verne Carty May 10, 2019, 8:36 am

    Looks like we are putting in a double bottom today….😊

    • mojo May 10, 2019, 9:22 am

      Yes, just feels weird to me…VIX looked suppressed at first (as market dropped), then finally stair-stepped thru 18->19->20 in a dogged out way (how’s that for technical analysis 🙂 Implied VOL on SPY is sky high, so market should rebound sometime but I don’t feel like playing. We’ll see.

      • Verne Carty May 10, 2019, 9:37 am

        Yep. VIX price action suggesting a fifth down….

        • mojo May 10, 2019, 9:49 am

          Yeh, looking more like that.

  • mojo May 10, 2019, 9:35 am

    Choppy 3 day head & shoulder on VIX & VXX with MACD indicators dropping into MACD mud (zero line) on 60 min. May pop out of mud, but I’m not playing right now.

  • Vivek Sahay May 10, 2019, 10:30 am

    I took off the last piece of short as planned. I do not have a significant enough conviction to go long. So I will wait to sell either a pop or a break down

  • p. May 10, 2019, 4:18 pm

    Thank you all for your kind input. Have a nice weekend!

  • Joe Longwill May 10, 2019, 10:40 pm

    Downside objective was not hit .
    Basically though this move down can be considered complete .
    Time though is not over .
    May 22-June 3 still a cycle low .
    Covered 80% of hedges and will leave the last 20% for now .
    The failure to even hit the average at 25459 ( low print 25469 )
    Leaves me with a slight bullish bias.
    The 25555 level is the pivot with
    25459 the key support
    Key resistance sits at 25855 now ( mkt closed above it )
    yet I’m keeping the 26065 level As the important resistance .
    This is not an Elliott wave count yet just noting the swings
    26695.96 high
    26310.28 low ( A )
    26689.39 high ( B )
    26180.36 low
    26534.96 high
    25789.71 low
    26118.10 high ( some may call this a wave 4 of 3 but I don’t )
    26469.86 ( the low so far ) ( C ?? )
    A further breakdown while allowed for given the timing
    Does not change the fact that price and has essentially been achieved .
    I’d say a further breakdown would target the lower 24906 level yet
    At this point I’m just going to say I really have no confidance in market direction .
    Leaving myself slightly hedged yet feeling as if I should have covered everything .
    These panic type moves usually if not always act the same way .
    Bottom line :
    We are probably going to see a flat choppy market with a bullish bias going
    Forward .
    I’m no longer bearish in my thinking
    The last 20% hedge is now considered ( I hate to say this ) a throw away trade
    Which Will be closed near the end of the month and I won’t be suprised if it’s at a
    Lesser profit or a loss.
    It is right now that the bullish / bearish debate will prove itself .
    The bottom might be in is all I’m saying .
    How far the market retraces will matter and so will the pattern .
    As noted before , a break below 24906 changes the math and calls
    For a complete new calculation .
    Many will argue this retrace was way to shallow and they will be correct in
    That thinking .
    Yet the math projections on this leg down are satisfied for the most part .
    The ‘re calculation would label this entire decline as wave A
    Which implies a big bounce and a much much larger decline .
    The problem with that though is it all has to happen with in the next
    12 to 20 days . ( This market would be all over the place if this is what’s going on )
    So….staying hedged yet very lightly and will let the market do what ever
    June should be bullish and from my view wildly bullish !
    Leaving the short term thinking to myself until May 25 th .
    Everytrade I make ties timing to patterns and I prefer a set up .
    Waiting a couple weeks to define the set up is fine by me .
    Enjoy the weekend everyone .

  • Verne Carty May 11, 2019, 10:13 am

    I have seen one count that interprets the three wave moves down as a leading diagonal, with the b wave of an upward flat correction making a new low on Friday. So far as I can tell it does not violate any EW rules. My own count saw an abc down with the c leg completing on Friday. VIX divergence on the new low is in keeping with a fifth or b wave low.
    We have a lot of techinal damage in the form of decisively broken trend-lines. New highs are going to require price to overcome what will now prove formidable resistance. The red line in the sand for me is SPX 2900, with a solid close above being needed to make the bullish case. Next week will be most revealing!
    Enjoy your week-end!

    • Peter Temple May 11, 2019, 12:35 pm

      The only rule a leading diagonal breaks is that they don’t exist – another Prechter invention that nobody’s ever seen in real life.

      • Verne Carty May 11, 2019, 1:01 pm

        Should we in invite him to the Chart Show? Lol!
        Well, if you are correct about that Peter, that count will have to be discarded and we will notch a new ATH.
        Any reversal prior to a new high would keep the LD designation at least a possibility.
        Either a new ATH, or take out of Friday’s to make the case so we shall see! 😉

  • Peter Temple May 11, 2019, 3:49 pm

This website is for educational purposes relating to Elliott Wave and natural cycles. I welcome questions or input about Elliott Wave, cycles analysis, or astrological input relating to any market. Due to a heavy schedule, I may not have the time to answer questions that relate to my area of expertise.

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. Posting trade specifics does NOT serve an educational purpose, is stongly discouraged, and such comments may be removed.

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