At the open today 7/27/17 the SPX completed a extended five wave Elliott pattern illustrated in my last post. The SPX top was less than two points above the short term Fibonacci target noted in my last post.
To understand the extreme bearish condition of the US stock market you must move beyond the dimension of price. Please examine the new 52 - week highs for both the NYSE and Nasdaq Composite. Both were at insanely bearish levels today. It would require a 1000 word post to sufficiently detail all the bearish evidence from the dimensions of Momentum, Time, and Sentiment.
The only significant bit of bullish evidence today was that all three main US stock indices; SPX, DJIA, and IXIC made all-time highs on the same day. Normally at least on of the three main indices will fail to confirm at a significant top. At the close on 7/27/17 the DJIA made a marginal new high unconfirmed by the SPX and IXIC.
If just after the open on 7/28/17 the DJIA was to continue above the closing level made on 7/27/17 and both the SPX and IXIC do not make new all-time highs - this could be a terrific signal to get short US stocks.
For a long time now I've had 2571 or so as a target for wave 3 of 5, which an eventual wave 5 target of 2714 for the top of this bull market. However, detailed examination shows an alternative count with W3 at exactly 2500. The market is very close to that point. Also, there is an important Bradley date on or around August 10th (a week away), and it will be interesting to see if the market hits 2500 on or around that date.
If 2500 does indeed turn out to be the top of W3, I have a target of 2368 for W4, to be achieved by the end of January next year.
@markrivest, in the cash market I see the possibility of a rising wedge to the 2500 area. But for that wedge to be valid the final wave upwards needs to start from an overlap in the 2453/5 area. In a perfect world the market will dip suddenly to create the overlap, then head north to the 2500 target. Of course the world is never perfect. Also, an observation, the market sometimes doesn't reach the perfect target but reverses early. That might be the case here, as I can see how the 2483 could be completion of a 'five'.
If the top is in, or if it does indeed hit the 2500 target, I have this as wave 3. Wave 4 should touch 2368 and is likely to be a slow flat formation not completing until January. Wave 5 should be 2714 next June.
@markrivest, I've zoomed in and calculated more accurately the 2500 target for W3. The exact number is 2494/5. Interestingly you've got a triangle upwards thrust target of 2492 on your latest chart, very close indeed to my target. That might be coincidence or confirmation. The Bradley date is August 10th (give or take a day or two either side) and it will be interesting indeed to see if the target area of 2492/5 is hit on around that date (just 3 or four trading days away).
Sadly I have W4 declining to 2368 but over a long period of time to mid-January 2018. If the market does fall over that period there's a potential gain of circa 130 points but will take nearly five months to materialise. W2 was short and sharp, so W4 should be long and flat. It might take the form of an ABC flat - I have a first low in late September/early October (which roughly coincides with the German election on September 24th). I can see how the market might decline 100 points or so into that timeframe, rally up to Christmas, then decline again in January.
@markrivest, no sign (yet) of any last gasp impulsive move to the 2494 area, although it *could be forming a slow rising wedge pattern. The market looks and feels tired, and momentum is waning. That doesn't mean it can't move higher of course. Also, the dollar decline/Euro rally looks overextended and too bullish - quite possibly this last rise in the US equity market has been due in part to the declining dollar.
I'm reminded that 'bottoms are an event, tops are a process'. If this is indeed the start of a long multi month W4 back to the 2368 area, the topping process might be tedious and misleading.
@markrivest, the market made a sudden and surprising surge upwards to 2491, almost touching the 'perfect' target at 2494, then reversed down hard. On the daily this shows as a bearish 'spinning top'. We are just two days away from the Bradley date of August 10th (one should allow two or three days either side of Bradley dates) and the market hitting almost the perfect target so close to the Bradley might not be coincidence.
If this is the top, there is an unfilled open gap on the daily in the 2430 area, and that might become a first target. In the meantime, the market *might* dip a little further to the 2466 area and then try to revisit 2480 before declining again.
As mentioned before, my price target for W4 is 2368 but not until January 2018, so if this *is* W4 it is likely to take a long and tedious overlapping route down to the target area over several months.
Naturally if the market rises further and exceeds 2494 (and particularly if it exceeds 2500) then this analysis is made invalid.
If 2500 does indeed turn out to be the top of W3, I have a target of 2368 for W4, to be achieved by the end of January next year.