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Wave 3 UpdateHere is out map of Primary wave 2 to this point. It is unclear if Minor 5 and Primary wave 2 are completed. Now that Primary wave 2 retraced all of Primary wave 1's movement and then some, instead of limiting historical datasets to a ratioed range, I am comparing all similar micro waves where wave 2 moved more than wave 1. Elliott wave theory says wave 2 cannot move more than wave 1, my modified theory permits this when it occurs. Wave 1's movement / Wave 2's movement = 0.9957. I compared all data in which this ratio is less than 1 (Wave 2 was larger than wave 1) and the numbers look a little more realistic moving forward. According to the data, Primary wave 3 should bottom above 3754 and less than 4036. The duration will likely last 608-740 trading hours. I still have other models with heavy agreement at a duration around 690-699 hours. Most models have the bottom between 3750-3799, which falls inline with the historical ratioed data. I will use the target of 3775 (drop 834.23 points from Friday's high) in 690 hours for estimating the Intermediate wave endpoints. Preliminary bottom for Intermediate 1 is below 4350 before December 25. Intermediate wave 2 up toward 4500 by January 10. Intermediate wave 3 will be a significant drop over time, current look is 3900 by end of February. Intermediate wave 4 bounces up toward 4100 by mid-March. Current Primary wave 3 and Intermediate wave 5 bottom is around 3775 by early May. Again this is all under the assumption Primary wave 2 is where we are, has completed, or will complete shortly after the open tomorrow. Primary wave 2 cannot realistically sustain too much more upside otherwise my wave placement is well off. More updates to follow.
SP:SPXShort
by StockSignaler
6
Time To Drop After Tuesday's Nice Pop?Assuming we are early into the long trip downward would put us somewhere in the early stages of Cycle wave C down, Primary wave 1 down, Intermediate wave 2 up. This would have made Intermediate wave 1 down 5 trading days long with a 120.39 point drop. Based on waves ending in C12, Intermediate wave 2 will last 1 day. There are zero other possible lengths. The quartile movements (blue levels on left) are 27.99%, 50.12%, and 56.51%. Based on waves ending in 12, strongest model agreement for length remains at 1 trading day and second strongest by a lot is 2 trading days. Quartile retracement levels (yellow lines) are at 27.99%, 42.03%, and 66.20%. Tuesday was the first official trading day of Intermediate wave 2. This is quite possibly the only trading day of wave 2. IF wave 2 achieves a new high tomorrow, Thursday would likely not see a new high for a very long time until we drop well below 4328 again. IF a new high is achieved tomorrow it may remain at or under 4400. IF we break above 4400 tomorrow, we may still be BACK in Cycle wave B as was identified in my most recent Devil’s Advocate Analysis. IF back in, well still in B, the market is either in the final Intermediate wave 4 Minor wave B up or the early stages of Intermediate wave 5 which would likely lead to a final market top within 2 weeks. If no new high is achieved and the market falls (likely based on all the Bank of England/Central Bank/Federal Reserve panels in Portugal) the market is in the early stages of Intermediate wave 3 down. This scenario would have seen Intermediate wave 2 last a single day and retrace 46.8% of Intermediate wave 1’s movement. Based on waves ending in C13, the quartile movement extensions of wave 1’s movement (blue levels farther on right) are 135.64%, 140.60%, and 165.83%. Most model agree on a length of 4-6 days, with secondary agreement at 7, 8, or 10 trading days long. Based on waves ending in 13, the quartile movement extensions (yellow) are 137.30%, 162.265%, and 198.02%. Models have strongest agreement on length at 5 days long, second is 1 or 4 days, third most agreement is 3 days, fourth is 7 days, fifth is 6 days, sixth is 2 or 10 days. Based on these models, the initial forecast is a possible market low late next week after the American holiday possibly below 4279 and probably not below 4240. This would equate to a drop of around 120 points in about 6 trading days. This is pretty much the same thing accomplished by Intermediate wave 1. Let us see how this plays out beginning with movement tomorrow.
SP:SPXShort
by StockSignaler
Good Start To Wave 3, More To FollowNow that last week has settled, it looks like PATH TWO was the chosen path from Like most of my analyses the original analysis is normally the correct one. Most premature analyses tend to rush a process that should otherwise be left alone. What does this mean? Intermediate wave 2 was later than initially projected and did not go as low per In fact, the analysis from last weekend using Minor wave A and B data indicated it would no longer drop to 3950. The likely floor would be no lower than 4000 and could break just below the end of Minor wave A which was 4049.35. The call for the bottom could have been at 4049.03 and for now the bottom was 4048.28. This low provides Intermediate wave 3 the room to gain the original projection of 300 over a few weeks, however Friday got a chunk of that. The projection for the end of Intermediate wave 3: Based on waves ending in 2BC3, Intermediate wave 3 could last 17, 42, or 48 days. The quartiles for potential movement (light blue lines) are a 110.75% extension of Intermediate wave 1, 302.37%, and 371.04%. Based on waves ending in BC3, strongest model agreement for length are at 12, 25, and 48 days. The quartile movement extensions (yellow lines) are 142.75%, 244.81%, and 261%. Based on waves ending in C3, strongest model agreement has Intermediate wave 3 lasting 12 or 25 days. Next strongest is at 24, 36, 50, and 62 days. The models become more diluted after that. The quartiles (white lines) are 144.13%, 209.13%, and 302.37%, respectively. In digesting the models, a slow wave 3 is not likely to occur especially with a diagonal trendline (thicker dashed red at top) which has been a pillar of resistance since Cycle wave B began in October 2022. 42 days long would put the end of Intermediate wave 3 around July 6th. The aforementioned trendline would be around 4424 at that point. 25 days long would place another potential wave ending around June 9th. The trendline would be around 4390. For Fibonacci traders this is pretty much at the 161.80% “Golden Ratio.” 12 days would be around May 19th, aligning with a 150% extension of Intermediate wave 1 at 4350. Another possibility is the diagonal resistance line is temporarily broken as a bull trap. This would mean the index strongly goes above the trendline before correcting significantly. We are near the end of the larger corrective wave which began in October. After the impulse wave up, we should have a drop in the index possibly over a single week before a quick move up again. If Intermediate wave 3 is shorter than Intermediate wave 1’s length of 25 trading days, then Intermediate wave 5 must be equal to or shorter than Intermediate wave 3 as Intermediate wave 3 cannot be the shortest wave. This is crucial to keep in mind. This is my most expected scenario if the index moves above 4300 within the next 7-10 trading days. I have laid out many possibilities and only time will tell, but I doubt Intermediate wave 3 is longer than 25 days, especially after a strong day 1 on Friday. I further expect the top to remain below 4393. I will continue to provide updates as the index moves along and completes the Minor waves inside of Intermediate wave 3. I am not settled on the end of Cycle wave B yet, but the current estimation is before the end of June. The potential catalysts for tops the summer remain Debt Ceilling Debacle and China action against Taiwan. A potential scenario for the end of Intermediate wave 3 is a temporary impasse on the debt ceiling vote in which the US defaults for a few days leading to Intermediate wave 4 or wave 3 ends when a band-aid 3 week extension is permitted. End of cycle wave B could be brought on if there is no solution by the end of June and no band-aid bill is passed. The China scenario would be a decision to invade Taiwan and taking control of the semiconductor chip market. All countries and products requiring chips would be impacted. Some companies have been working quickly to establish plants, factories, and resource mining in other places throughout the world, but China could cause chaos by taking more control of Taiwan.
SP:SPXLong
by StockSignaler
Estimated Path To Next SummerFull analysis to follow with specific near-term levels. Prior Intermediate 5 did not move as expected so that likely puts us inside of Primary wave B heading down. Early estimates have us in Primary B Intermediate A Minor 3 Minute 2 This means wave 3 of 3 is next with the inflation report tomorrow morning. Early signs per this would have November inflation hotter than expected. Fed also determines next rate hike on Wednesday. Looks like first near-term bottom could be prior to Christmas followed by highs after New Year while most of January points down. The January bottom should hold for quite some time as we should rally after the late January low until the early summer. The final downturn is still slated to begin in early to mid summer for northern hemisphere folks. Early estimates still place the final bottom around 2200-2400 by March 2025.
SP:SPXShort
by StockSignaler
2