SHORT TERM: higher open sold, DOW -166
Negative week so far. Gap down opening on Monday eventually took the market to SPX 2699. A last hour rebound, gap up Tuesday, then higher open on Wednesday, took the SPX to 2746 by the first hour of trading. After that, right back down again to 2699. NAZ rallies – the DOW is sold. DOW rallies – the NAZ is sold. In the meantime, Asia has been lower and Europe mostly lower as well.
With the breakdown below SPX 2729 on Monday, the rally (2677-2791) was corrective like the two previous rallies during this uptrend. This suggests the entire uptrend could be a corrective B, or corrective D of a triangle. Noted the triangle configuration on the SPX daily chart today in green. Keep in mind, the E wave of a triangle does not have to drop to the lower trend line. Also, removed the “uptrend” labels, as it does appear the SPX is in an unconfirmed downtrend. More on this over the weekend. Best to your trading!
MEDIUM TERM: downtrend may be underway
LONG TERM: uptrend
the ELLIOTT WAVE lives on 
Go outside and play for goodness sake 😉
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Goog weekend Tony and all bears and bulls alike🌅
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Thanks Chris Kimble
Thanks Tony. x
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Hey abc123
What do you think about BTC here ?
Only if you feel like commenting, thanks.
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SPX update
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I think today completed an abc flat that began at the 2699 low on Monday. So I continue to count downward.
2791 (6/13 high) – 2699 (6/25 low) = A or 1
2699 (6/25 low) – 2743 (6/29 high) = B or 2
Normally, the market rallies into July 4th, but Monday is QT day, which might get in the way of that. Fed takes out $18bn in Treasuries on Monday.
While I don’t put faith in such things, there is a H&S formation on SPX. The left shoulder would be the 5/14 and 5/22 highs, the head would be the 6/13 high, and this week built the right shoulder.
Also want to make mention of the daily pivots. On 6/13, the DR1 for that day was 2791.50, and the HOD was 2791.47. Today, the DR2 was 2743.23, and the HOD was 2743.26. While the market doesn’t always hit these daily pivots, probably 99% of pro traders always know where they are every day, so it seems to me that if you’re daytrading, or even a position trader who enters/exits intraday, you should always know where these pivots are each day. Many times they nail the top and/or bottom to the tick.
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+1. Thank you.
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Well if it’s 1,2 and not A,B then the market is in 3 down. This time last week a similar situation was in place. If this is a large C wave down comprising of 5 waves from 2791.47 then last weekend’s gap down was 3 of 5 of 1 as part of a leading expanding diagonal. This weekend’s gap down, should it occur, would be an order of magnitude greater as part of 3 of 3 under the supposition of a 5 wave C wave down.
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Correct. Bottom line is if 2692 is taken out, then it would either be a big C wave or a wave 3. Either way, it should accelerate downward at that point. As I previously mentioned to Xuwu, though, waves 2 &4 in a LD have to be zigzags, and I’m not sure if the 2743-2775 rally can qualify for that. It surely isn’t a single zigzag, but Xuwu thinks that double or triple zigzags also qualify, I honestly don’t know the rule about that. So, I’m being conservative at this point and am counting the entire 2791-2699 decline as a single zigzag, rather than an expanding LD. Of course, this all assumes that the trend is still down, and yesterday’s full moon low wasn’t a change in trend.
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Another way to count this beast is as a less devastating 5 wave C wave is to say the whole thing from 2791.47 is a contracting ending diagonal. Monday’s 2699 low would be the end of an abc wave 1. Wednesday’s 2748 high would wave 2. Yesterday’s low would be a of 3 with today’s high b of 3. Thus currently in c of 3. In this case 3 must be shorter than 1 and 5 must be shorter than 3. If this plays out then the market will experience a very up and down period, trending lower with the moves getting smaller each time as c of 3 is followed by another 6 whipsaws (i.e. 3 waves of 4 and then 3 waves of 5). This C wave count would assume Int. IV has already completed and be part of an expanded flat completing ii of Int. V. I’m not convinced of this. It’s just another possibility to add to the list. Something the bulls might wish to hold on to is the late session sell-off stopped just short of the 50% retrace (wave 2?) on the DOW & SPX after what passes as 5 waves up off yesterday’s low. But as aah has stated, it could be an ultimately bearish C wave off yesterday’s low as part of an expanded flat. We’ll have to wait ’til Monday to find out. Nice and safe weekend to all.
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I mentioned the expanded flat count to Soul in the past few days, but the problem with that count is that you have to say that wave 1 upward ended on 5/22, when I know it really ended on 5/14 as an abc. So, I just don’t think that count is valid. Also, all waves in a contracting EDT have to be zigzags, and today’s retracement came back too far to qualify as b of 3.
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FTSE doing the best of the rest. Only retraced 37% from the its May ATH to its recent low and currently down only 24% from the ATH. Needles to say there have been better indices to short. That’s what breaking away from the self seeking Eurocrats does for you and counter to what all the politicians said would happen. It’s not just the weaker currency as the DAX, CAC and other Eurozone indices have a similar benefit from a similarly weaker Euro.
The DAX and CAC are really starting to add to the bearish case. DAX futures are currently sitting at the 62% retrace level but have already dropped as low as 74%. CAC futures are sitting at 52% having gone as low as 59%. A full retrace and then some is possible. I have the same bear count for both these indices, currently in, or completed today with a truncation, c of 4 of iii. The bullish count would be c of 4 of C however that implies this drop is a correction but the preceding advance was only 3 waves so that was a correction itself. The other possibility is a triangle but both these would be in the C wave of the triangle whereas Mr Caldaro has SPX already in the E wave of the triangle and just about done.
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FTSE is a very concentrated index, top 8 stocks are nearly half the index. High weighting to commodities and 2/3rds of revenues in overseas currencies as lots of big multinationals list in London as it’s Europe’s financial capital. So it’s not overly affected by what’s going on in the UK. We have a perma dove running the Bank of England but Carney leaves next year, some of the other members of the Monetary Policy Committee are much more hawkish. Sterling is not far off all time lows on a trade weighted basis, and there’s clear negative correlation with FTSE given how much revenue is derived overseas. I still think we will reach a deal with the EU as it’s politically unpalatable for us not to so expect May to fold on some issues. That should see the Brexit risk premium drop out over time. That plus a more hawkish BoE means I think sterling rallies.. I’m not sure vs USD though as the dominant trend at the moment is USD strength. So what I’m saying is, at the moment everything is going FTSE’s way… low sterling, high oil (may go higher but high vs recent trading range) plus there are a number of defensive stocks which do well when bond yields fall, which they have been doing. If those factors reverse it will probably struggle relatively. I’d also say as a price index, it’s natural it underperforms vs Dax and US indices. FTSE has a big dividend yield (c.4%) while Dax is a total return index and US indices have smaller divi yields (c.2%). So 3% capital appreciation pa would get you to the long run average return of 7% pa overall which is only 200 or so points a year. It’s a common misconception that it’s a bad laggard over recent decades but when you include the divis it’s not too dissimilar to US market returns. The other European markets are more directly affected by the trade war so makes sense they’ve been struggling.
As for current price action on FTSE I wouldn’t have it down as being bullish, all looks corrective to me. FTSE tends to move in impulsive rally legs for 5-6 weeks then has lengthy corrective periods. We basically bottomed in March, then rallied in a straight line to a new ATH (7900) 100 points above the January one based almost purely on sterling tanking and oil flying. Since then, we corrected in a straight line to 7600, which was the trading range breakout from last year, then rallied and made another lower high at the January high (7790s). Then back to 7490. We’ve for the most part being doing 1-2 days up then 1-2 days down for 6 weeks now, making lower lows and highs along the way. Just my feel is that if we were going to go to 7900-8000+, we’d have held that 7600 retest and rallied off there. The fact that we haven’t and keep trading either side of it is a worry (for bulls). This level of extreme vol where we rally 100-150-200 points then give it all back is usually a precursor of a bigger move down coming. I’m not sure at what point you’d get a clean move lower, I thought under 7600 but it’s been more messy than that. A waterfall should be obvious when it happens, so until then it’s still a case of selling the rallies and getting out on the downside pivots and going long for a bounce if things stabilise.
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Alright, so I was too impatient again. 2667 Monday. 🙂
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ES another shot at joining trend down 4hour
https://invst.ly/7vwgf
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NDX (and RUT) update numero tres 😉
https://investingintelligent.com/2018/06/29/nasdaq-update-iii-you-have-arrived-on-the-other-side/
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So it is cautiously optimistic 🙂
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Always 🙂 There are no guarantees and that’s why one always must have stops in place. But on the other hand you’ll wait forever to enter a trade if you want 100% certainly from the market….
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Arnout thanks, I always appreciate your analyses, but I
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..wonder why ..when one is doing well, why sell a service as well? or does it mean its all theoretical and cannot be trusted to trade?You catch my drift?
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Buy the dip Sell the rip will be the strategy until November.
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