The count for the SPX could be a running Minor 4 triangle. Two versions are shown below:
Overall, it looks much better:
The best bearish count is that today was peak Minute [ii]. But I don’t like this count because sentiment has bled off over the last few months, not increased again on a wave two. Running out of price. But if the market suddenly drops below 7500 SPX, at least we have a count for it.
On the long-term chart, the underside of this triangle is the upper channel line.
Well, the market finds itself at the opposite end of where we were last Thursday (see last post). The best bullish case was that it had to go up immediately and violently and it certainly did over the last few sessions. The NASDAQ Composite came within 7 points of a new all-time intraday high however today was a new closing high. Its count seems unfinished. Therefore, it seems the bullish count overall is back in control. However, the DJIA is of course lagging badly the SPX and Composite.
Looking for the top of Minute [iii] of 5. Today’s big open gap up has to stay open for this count to finish.
So, as we did last Thursday, we leave the best opposite (in this case bearish) count. Which again implies prices need to move immediately – in this case down.
The market is at a key junction. Tomorrow will likely be volatile one way or the other. The high is probably in.
Still no signs of real panic.
Market is already screaming for another 1/4 point hike.
The best bullish case from here is that a falling wedge will bounce very violently upwards. One last “AI” dance. The NASDAQ has yet to crack, so we shall see.
Well, here we are. We’ll label the recent low which bounced off of major support Minute [ii]. The call is for wave [iii] of 5 of (5) of [5] up. Should be grand if it happens.
Time to check in. Either the top is in, or we have wave [iii] of 5 of (5) of [5] still to come. But first, we need to confirm a low in Minute [ii] which I suspect will close the open chart gap. We’ll give this AI mess the benefit of the doubt and that the rally continues through the end of summer. This blog had said as much a few months back so might as well see it through.
Waves getting tinier and tinier. Compressed. There is certainly room for a last spasm upwards. Maybe another month of madness.
We’ll all has come to pass. One more small higher high and a completed impulse up would have formed. We’ll label this Minute [i] of Minor 5 of (5) of [5] up.
It’s been a few weeks since the last update, but to be honest, I was just being patient in that a predicted triangle pattern was probably playing out. And now we have nearly reached its end. It’s an obvious ascending triangle so the fact that many can recognize this pattern could actually doom it to failure.
Regardless, Minor wave 4 need not be a triangle as it could morph into a more complex corrective pattern continuing to move sideways overall. In the last update, it was noted that, technically speaking, Minor 4 could drop all the way to SPX 7100 and still be valid since it would not have overlapped wave 1’s price range. But yeah, a drop that far would be harder to recover because the market overall is showing extreme signs of bubble behavior and things are being stretched beyond belief. A final burst up here from a triangle would do the wave structure complete justice.
Take note that a very long term trendline (blue upper channel) is being “hugged” above.
They are going to have to raise short term rates because the market is signaling that they must.
Again, I believe the market will hold up through summer. Perhaps a Minor 4 triangle is forming. The truth is, the SPX could drop 400 points from here – from 7500 to 7100 – and Minor 4 would still be a valid count. I would not be surprised if it did.
Oh oh, not good. A .25-point interest rate hike is beginning to be signaled by the market.
The extended wave five count since 2020 seems to be finishing up this summer. I do expect Space X, Anthropic and OpenAI to go public before the market totally crashes.
There is a certain mathematical elegance to the chart below.
The following chart explains why and how to label an extended wave five. The market made a perfectly fitting peak in 2021 and did decline to (2). However, the market extended indicating an extended wave (5). This pattern didn’t fully realize itself until the recent blast up that took us to 3 of (5) of [5].
It would be prefect if the market made yet another new all-time high this summer or even Fall.
Wave 4 cannot enter into wave 1 price territory or else the count is invalid.
The recent push to all-time highs did not occur with a breadth thrust event per se. 19 days is not really an event. In the past corrections, we have had significant events. So, this aligns with a possible top soon.
From the DJIA standpoint, this second wave retracement is reasonable.
This is reflected in the non-breadth thrust situation on the NYSE. Today is the 16th day. If it finished over 61.5, that is not really a significant “breadth thrust” event. But it’s something. I won’t have the data until tomorrow.
Yeah, we’ve reached the limit for wave (2) up. It’s probably not wave (2) up.
The next best count. I’m just taking a best guess. Another wedge situation. I would think we have underthrow and not overthrow of the upper line. This actually makes the subwaves for wave (1) a nicer combo.
