Κυριακή, 7 Αυγούστου 2016

S&P500: Weekend Analysis from ElliottWaveTrader

Author: Avi
Breakout or Breakdown?
S&P500, 60MinChart, DailyChart
1turnchart
While the market finally broke the 2159 upper most support, and opened the door to a larger degree correction, it clearly did not walk through that door.  In fact, the drop below 2159 could not even last a day, as the market re-took that support level the next day and made higher highs on Friday.

This leads me to reiterate my longer term perspective that the market is set up in a very bullish long-term pattern, which is targeting the 2537-2610 region, with an estimated 70-80% probability at this point in time.  Yet, the market has still left us with the question as to whether it wants to begin the move towards that region without any pullbacks, or if it will still provide us with a standard pullback into later this month.
Stated in another way, in standard pattern set ups, the market “should” provide us with a pullback through the rest of the summer.  However, due to the fact that the market is setting up in the heart of a 3rd wave, sometimes, we do not see standard retracements.  In these rarer instances, the market simply “melts-up” without much of a pullback at all, leaving those wanting to enter the market behind, and requiring them to chase the market, making the rally that much stronger.  This is why we have to maintain a healthy respect for the blue count noted on our 60 minute chart, at least until we break the noted support for the blue count.
Moreover, I have been eagerly following the work of Dr. Cari Bourette, who has developed an algorithm that tracks market sentiment (Marketmood.net).  Her work is actually a breakthrough in the study of socionomics and has been able to attain accurate forecasts of market movement over 65% of the time. Her algorithm of market sentiment supports the same perspective the wave structure is showing us, which suggests the market may struggle in the upcoming week within the resistance region noted on my charts before deciding whether a larger degree pullback can be seen, which still seems more likely than not to her.
Additionally, Bill Albert, who developed a proprietary put/call ratio analysis which is exclusively seen at Elliottwavetrader.net, also expects that the market “should” see the standard pullback suggested by the Elliott Wave structure. Bill’s proprietary analysis has him expecting a market decline to begin quite imminently, as it seems to indicate that smart money has used Friday’s rally to “cash out.”
As far as the smaller degree Elliott Wave count off this week’s low, the market is set up to move a bit  higher in the coming week.  So, I have to slightly adjust the break out level on the SPX to 2200 (up by 8 points), which also crosses the trend channel noted on our 60 minute chart during the middle of the upcoming week.  And, while you may call me foolish, until the market proves the more aggressive immediate bullish count, I am going to still expect that we see some form of retracement.  In fact, it would not shock me if that retracement was quite deep, as presented by the green count.
Despite the disbelief by most as I have been repeating this since January of this year, the larger degree bull market pattern which began in 2009 has been pointing towards much higher levels for quite some time.  I have also reiterated many times on our site that I have no desire to be aggressively shorting a market setting up for a 3rd wave higher.  But, for now, we are simply attempting to pinpoint the smaller degree pattern which takes us there.  And, at the end of the day, just remember that the market does not owe us anything; not even the pullback we really want to see in August.  There is only so much of which we can be certain within non-linear markets, as we are dealing in probabilities and not certainties.  Just keep in mind that the probabilities suggest this market will likely be much higher in 2017.

IWMdaily

LONGTERMSPX


Unweighted Open Interest (003)


Short Term Razzmatazz Wave (005)

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