SPX Update: Edwards and Magee...

Last update noted that an immediate breakout over 2263 should lead to a retest of 2273, and that was what happened.  The bigger picture is unchanged, with SPX 2400 still in the cards unless and until the market suggests otherwise.  And until the market suggests otherwise, the main question is how much more goofing around the market will do in the current price zone before its next "for real" move, so we're just going to look at the near-term chart today, along with some of the relevant levels:

In conclusion, there's been no real change since November, even though the market has spent the last month trading inside the famous Shake, Rattle, and Confuse 'em Pattern, which was first recognized by Edwards MaGee and Molly during a 1951 broadcast of their popular radio series of the same name.  Or... wait.  Part or all of that might be wrong.

No matter!  The point is, we have levels to watch now.  The worst move for everyone here would be a (B) wave that breaks the prior high before reversing into a (C) wave, but bears have to be very, very cautious if there's a breakout, because if no B-wave materializes, this consolidation/continuation pattern could be entirely complete, and the market might not look back on a breakout.  Trade safe. 

SPX Update: 2017

Well, 2017 is finally upon us, like a thing that falls upon another thing or something (writer's note:  go back and edit this to a more poetic image if there's time).  Interesting to note that we're now five full years past the Apocalypse that was supposed to occur in 2012 (according to someone's interpretation of the Mayan calendar), and all we really got out of it was a few crummy movies.

SPX was clearly excited about 2017, and opened the New Year with a gap up.  One potential near-term path is discussed below, along with some additional levels and where they may lead:

The black (A)/(B)/(C) shown above is still just a hunch, and may or may not come to pass -- but I think it would be a nice confuser and a fitting way to get bears excited and shake some bulls off the rally before it continues higher.

Still no change to the big picture:

In conclusion, near-term, keep in mind that SPX is currently within an established trading range, which means predicting its near-term behavior becomes more difficult.  Trading ranges have the effect of "loosening" all the patterns that show up inside the boundaries of that range, so those patterns rarely lead where they would typically be expected to lead.  Bigger picture, there's still no material change.  Trade safe.

SPX Update: An Ultra-Rare Pattern to Close the Book on 2016

After Wednesday's session, it became apparent that the previously-assumed triangle count was off the table, so before the open yesterday, in our forums, I posted a new short-term wave count, along with a first downside target of 2244.

With that chart, I included the following commentary (slightly edited for clarity):

Since I don't do Thursday updates on the main blog, I at least wanted to publish this quick chart for everyone here on the forum.  Triple zigzags are among the most rare legitimate patterns (there are patterns that are more rare, but the only patterns more "rare" are patterns I don't consider valid (lol), such as the "expanding ending diagonal," which I don't believe exists at all, thus making it technically more rare than the triple zigzag, since the "EED" has a frequency of 0%). 

Anyway, if ever I've seen a pattern that COULD be a legit triple zigzag, this is it.

If 2248 fails, then this pattern is a triple zigzag, which you'll have to forgive me for not anticipating in real-time. In the past couple decades, there have literally only been a small handful of these, so it's something of a fool's errand to even watch for them, and these types of long-shot patterns are generally only tracked by perma-(bears/bulls) who are trying to find SOMETHING that can fit their underlying bias. (IMO, watching for triple zigzags is somewhat akin to betting on an unforeseeable black swan event every time the market corrects even slightly).

If 2248 fails, then we have to presume this is a triple zigzag, in which case we have 3/C targets at 2244 +/- and 2226 +/-.   Just a heads-up for everyone.

Here's the triple zigzag chart:

Here it is on the now-defunct triangle chart:

Again, if SPX sustains a breakdown at the blue/red trend line (blue on the first chart, red on the second), then bulls might want to hold their fire until things clarify again, because it's always possible that red C (above) is only wave 1 of a larger C-down.  Nimble traders might even consider shorting against the all-time high IF (and I stress IF) we get back up within a few points of it -- playing for a more complex correction, that could even head as low as 2200-2215.  That's looking a bit down the road, but something to keep in mind.

As of yet, no real change to the bigger picture:

In conclusion, we just witnessed a corrective pattern so rare that I can't recall having seen one at this wave degree in at least the last 5+ years.  Whether this is ALL OF the correction remains to be seen, but there are enough waves for a complete ABC down, if that's what the market wants.

On another note, the next time I do an update it will be 2017.  Which seems ridiculous, really, because 2017 sounds incredibly futuristic.  I'm going to be sorely disappointed if we don't at LEAST develop warp capabilities in the next 48 hours, so technology can get caught up with the sound of the year.  I mean, c'mon, if you'd told high-school kids in the 80's what the differences would be between 2017 and, say, 1989, we'd have been SORELY disappointed.

To illustrate this point, let's look at an unbiased list of the pros and cons of 2017 vs. 1989.

2017 Pros:

1.  Everyone has cell phones.

2.  Virtually all other communication, shopping, bill paying, etc., can be done over the internet.

3.  At a loss here, and I've been thinking for like four entire minutes.  Oh!  Digital cameras.

2017 Cons:

1.  Everyone has cell phones.  Even little kids have cell phones, which makes YOUR kids (yes, you have kids now!  It's 2017, duh.) believe they, too, are entitled to a friggin' cell phone -- so when you refuse to get them cell phones because you want your kids to learn how to communicate like actual human beings and not constantly bury themselves in a "one-step-removed" form of interaction, AND you want them to learn to entertain themselves without technology, they believe you are the most ruthlessly-strict parent to ever walk the face of the Earth.

2.  The music sucks.

3.  Commercial forms of art are dead.  Virtually everything (from movies to music) is a "reboot," a remake, or an outright ripoff of something that came before.  It seems like nobody has any original ideas anymore, probably as a result of everyone having their face buried in a cell phone or laptop 24/7, which allows them no TIME to think up original ideas.  Some of the greatest inventions and ideas in mankind's history have come about simply as a result of boredom, which gives people time to daydream and motivates us to create.  When we fill up our every waking minute with "busy work" or mindless entertainment, we leave no space for true creativity to break through.

4.  Everything else.

Anyway, my point is:  Happy New Year!  Despite the inherent cons of 2017, I do wish all my readers a safe, healthy, and prosperous New Year.  Trade safe!

SPX and RUT: Is SPX Finally Ready to Resume the Trend?

For the past couple weeks, we've been viewing the recent move as a consolidation/continuation pattern, and there's still no material change -- though it is quite possible that SPX is finally ready to break out of this chop zone and start heading higher again.  Note that yesterday it cleared the upper red resistance line, then came back down to back-test it:

RUT has also formed a second, and so-far-successful, back-test of the breakout from its uptrend channel:

In conclusion, this is, theoretically, the "easy" part of a move; and barring something bizarre, higher prices are still expected across the board.  Short-term corrections will occur within that framework, but the broader trend still remains up for the time being -- and, for now, anyway, that also applies to the foreseeable future.  Trade safe.

SPX and RUT: Are Fourth Waves Annoying, or Just Plain Awful?

We have a saying in Elliott Wave, when we Elliotticians gather in whatever places Elliotticians are found.  What we say, when we're gathered amongst ourselves, far away from the autograph seekers and the paparazzi, is:  "Everybody loves 'em a good fourth wave."  Then we mimic a perfect Fibonacci spiral with our thumb and forefinger, and we add:  "Not!"

Then we laugh hysterically, because we're easily amused, us Elliotticians.

It appears that SPX has decided to continue its triangle, which was something I noted could happen in the last update, because I've been around this block a few times and I've seen what these sneaky bastage fourth waves can do -- because they hate us, these fourth waves.

RUT has back-tested its black trend channel -- thus far, successfully.  Given how far RUT came in such a short time, a minor break back into the channel isn't out of the question.  Bulls obviously don't want to see a major break back in:

In conclusion, SPX has continued its sideways grind.  The triangle stays on the table as long as 2248 holds, and targets 2288-2300.  As an aside, does anyone else find the now-constant play-by-play on "Dow 20,000" to be getting a bit tired?  Every day, I have between 50 and 1000 new emails from Marketwatch alone, that all read like this:

Dow Retreats 9/100ths of a Point Farther from 20,000, Oh the Horror

Dow Shakes off 9/100ths of a Point Morning Retreat to Put 20,000 Back on the Table, Huzzah!

Dow Moves Toward 20,000... No, Away!  No... Wait, Hang On, We'll Send Another Email in a Second...

Dow to Officially Be Renamed as "Dow 20,000," Thus Finally Rendering This Play-by-Play Irrelevant

Beyond that, I'd like to wish all my readers a happy and safe holiday season.  As is now tradition, I'll link to a non-market-related article that I first published in 2013:  A Christmas Story -- Reflections on What Matters.

I truly hope everyone enjoys this time with their loved ones.  Trade safe.

SPX Update: SPX is Poised for (sound of retching)

A slightly-late and super brief update today, because I've been down most of the evening with a very nasty stomach bug (presumably food poisoning) and am quite under the weather.

Below is the update to the triangle count.  Note that until SPX clears 2277, the triangle could still be unfolding, and it's not impossible for the rally from 2248 to all be part of a complex b-wave (so it could be red b, with red c/d/e still to come (!)).  For everyone's sake, let's hope that's not the case -- but it is technically possible.

Sorry for the short update today.  I'm going to go throw up again now.  :)  Trade safe.

SPX Update: Please Do Not Adjust Your Television Set...

Friday saw traders everywhere vigorously scrubbing their screens with Windex in an attempt to erase the strange little "-" symbol that had appeared in front of their price quotes, while brokers' tech support lines were inundated with calls demanding to know why they had changed their color palettes from green to red.  Confusion quickly turned to panic as the S&P 500 closed down almost 4 points, sparking a rash of questions and rampant speculation as to whether the next bear market had finally begun.

The Fed held another secret meeting and vowed to henceforth raise interest rates ONLY if a 50%+ rally had occurred since the last rate hike, lest they spook the market and cause another Lehman-type event -- which could cause years worth of hard-earned bubble gains to vanish faster than you could say "Janet Yellen smells like Doritos."  (Although why anyone would even imply such a vicious rumor is completely beyond me.  Nevertheless, I challenge you to try NOT to think about this next time you're watching Yellen on TV.)

Meanwhile, due to the massive move of only 4 points, there is no material change to Friday's update, except to expand upon how a triangle may or may not be continuing to unfold here:

In conclusion, there's really nothing else to add from Friday's update.  Trade safe.